June 20, 2016

Want to Build Smart IoT Infrastructure? Focus on Smart Partnerships First

As the market retunes this year from a hype factor towards value identification, implementing Industrial IoT solutions is starting to appear a bit easier said than done. Just a quick scan of the discussions and writings on the topic can reveal the complexities of a broad horizontal ecosystem covering many industries across which solutions need to fit together tightly if only to enable the basics of delivering a related data service.

But this article is not about exploring their technicalities or differences. It is about exploring my market perception on a couple of things, and sharing first-hand insight from a manufacturing CEO, and a noted market analyst on same. Perception one being: Vendors are not thinking enough about their customers beyond what their own products or services can do. And two: Given the complexities of such a broad horizontal data value-chain, neither vendor nor buyer is answering clearly what their value-add is across this ecosystem.

In seeking clarity on these areas, I’m thinking of what needs to be top of mind for decision makers on both sides to simplify a process of potentially joining forces to build out IoT systems and services. I’ll refer to this process as creation of a smart partnership: that place I believe where clearly articulated value meets informed conversation about the horizontal ecosystem. The following explains.

How do buyers carve out value from a complex horizontal ecosystem?  Empower the team! Aly Pinder, senior research analyst at Aberdeen Group, points out that the broad nature of the horizontal ecosystem (i.e., the marketplace) is currently serving as a barrier to full investment. He refers to an apparent disconnect on two levels with buyers. On the executive level, the focus is: This technology is cool, how can we make the business case? While at the VP level, it’s more like: What can I do now to improve my situation? Given such strategic vs. tactical separation, Pinder advocates empowering the tactical. It’s about “focusing on how we can improve,” says Pinder. “That’s where the understanding should be.”

What can vendors do to simplify the sales process? Know thy customer! Brainstorm internally about who the users, stakeholders, are; how might they use your product/service (i.e., predict the potential value); and how to get them onboard. Pinder explains that one thing he finds common across industries is that vendors have difficulty understanding who the advocate is at the buyer organization. Is it IT? Is it engineering? Marketing? Some other department? He points out that use of data varies across an organization. For instance, he adds, an elevator at a buyer site may contain various sensors. A vendor needs to approach different function leaders with tailored conversations and stories, as each function area impacts different parts of the organization.

What can buyers do ahead of meeting with the vendors? Do the homework! Scott Schwalbe, CEO of Nimbelink, a wireless devices manufacturer, says that whenever a potential customer calls, he first asks why it needs IoT. How the caller responds to this question will likely determine the quality of the conversation from that point on. The buyer category may cover, for instance, VARs, service organizations, or anyone needing their services. Each will have its own service processes and business models. And each should be capable of clearly stating the value proposition and expectations ahead of holding exploratory dialog, as no one knows the buyer’s business better than the buyer.

Pinder is quick to reflect that across areas such as energy, cities, and others, the application is mission-critical. For smart cities, he points out, the entire infrastructure must tie together to make sense. Not only should that light post come on at dusk, but it should also connect a support team to come out when necessary, fix it, then repeat. Enable marketing messaging as well. “Service is not optimal! You should do xyz,” says Pinder. “And by the way, your contract is about to expire.” Schwalbe further concurs that “true value needs a complete solution.”

Can a smart partnership help? It’s where both vendor and buyer agree on how to make money together.

Sal Yazbeck (www.SalYazbeck.com) is a Miami-based market researcher, analyst, and product/service strategist.

Edited by Ken Briodagh

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