Why do most IoT projects fail?

The Internet of Things (IoT) creates groundbreaking opportunities for industries to expand their market and use data driven insights to better serve their customers.  

While we have covered the advantages of IoT, we haven’t spent much time considering why projects don’t go well and fail to live up to expectations. 

In fact, Microsoft revealed that 30 percent of companies failed in proof of concept (PoC) stage. While Sierra Wireless highlighted 58 percent of respondents had IoT projects that were mostly unsuccessful. 

Even with these statistics, the low rates of success have little to do with IoT technology, but rather that IoT adoption and implementation is truly a complex undertaking

Let’s take a look at some of the biggest roadblocks when it comes to IoT. 


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Unclear goals 

A primary reason for IoT project failure is that organizations simply do not establish clear business objectives and motivations for its implementation. 

This can boil down to two things:

  1. Lack of understanding surrounding the needs of the project and its intended results
  2. Miscalculating the technological complexity surrounding the implementation of the solution

Many organizations that adopt IoT, do so only to keep up with the latest industry or market trends.

While embracing IoT is a way to reduce costs and increase revenue flows, miscalculating the complexities involved will only cause more harm than good.  

For instance, installing a smart HVAC system is not going to automatically reduce the cost of building maintenance if you don’t know how or why to act on the insights and data it captures.  

That’s why building a clear business case and roadmap with appropriate milestone is good practice because it can assist in identifying current shortfalls, desired results and how to achieve them.  

Paradox of choice & scalability 

Closely linked to the lack of goals is not knowing how or what type of connectivity to procure for their IoT project.

With different bandwidths and latencies, licensed vs. unlicensed spectrums, choosing the right connectivity can be a daunting task. 

There is also the added complication that technology used during proof-of-concept (PoC) can be different from what is ultimately used during mass deployment.

For a logistics company, deploying hundreds of sensors to monitor consignment conditions during a localized PoC is vastly different from deploying tens of thousands of sensors globally.  

What type of connectivity is the most cost effective? What kind of global coverage is there? How many connectivity providers do we have to negotiate with? Do we have the technical capabilities for a large scale IoT roll out?  

These are just some of the many questions that can plague an organization despite a successful PoC. 

Poor organizational collaboration  

Successful IoT projects require collaboration across different departments, both technical and commercial, as it brings significant change to the entire business model.  

Unsuccessful IoT adoption can also be attributed to lack of synergies with other business units within the organization.

It is a mistake to simply adopt a top-down, “follow-the-leader” attitude when it comes to investing in IoT. The entire organization should be involved, not just senior management and the IT department. 

This collaboration can help highlight how the project will work logistically, bring hidden concerns to the table and ensure the project aligns with common objectives. Some might find it difficult to adapt to new IoT systems and interfaces, preferring to stick to current working processes instead.  

This collaborative effort will also extend to the technical aspects of IoT and understanding how the components interact. Ensuring the overall solution works effectively at every stage. 

Not asking for external help 

Because implementing IoT projects can be complicated, researchers at Beecham also point out that organizations that solely rely on in-house resources saw more of their projects fail to meet expectations.  

Unless you are in a massive organization with plenty of resources to spare, oftentimes building, implementing, troubleshooting and maintaining an IoT suite in-house isn’t the best idea.

There is no stigma in purchasing a baseline IoT solution and adapting it to suit your evolving goals and needs. By the time you resort to an external provider for assistance, things most likely have already gone wrong.

The cost to remediate the situation can then outweigh the savings from the IoT implementation. Defeating the whole purpose of the project to begin with and deterring management from trying to implement a similar solution in the future. 

Having the right ecosystem and connectivity partner by your side can also provide you with constant guidance that you are aligning with your business goals. Balancing innovation without sacrificing on security or sacrificing your investment goals. 

Closing notes

IoT has been used to truly transform organizations, create new business models and disrupt entire industries. However, it is disappointing to see how many organizations fail to realize the potential of IoT technology and achieve their business goals. 

The good news is these challenges can be overcome.  

At ZARIOT, we are here to increase the success of your IoT project regardless of the stage its at. Helping you increase operational efficiency, revenue opportunities and improve customer engagement with out extensive partner ecosystem.  

Why wait? Contact one of our industry experts today to kick off discussions or learn more about our award-winning solutions here and here. 


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