One of the biggest obstacles is that traditional functional departments often can’t meet the needs of IoT business models and have to evolve.
Product management. Successful IoT plays require more than simply adding connectivity to a product and charging for service — something many companies don’t immediately understand. Building an IoT offering requires design thinking from the get-go. Specifically, it requires reimagining the business you are in, empathizing with your target customers and their challenges, and creatively determining how to most effectively solve their problems.
Finance. Finance teams, which are not known for their flexibility to begin with, often have trouble changing their traditional planning, budgeting, and forecasting processes to accommodate radically new IoT business models.[…]
Finance departments also had trouble dealing with the fact that the cost of services and the resulting subscription revenues can accrue in a complex manner.
Operations. When product-based companies add services and connectivity, operational requirements increase. The resulting challenges may include new contract-manufacturing relationships, which can be a complicated and disorienting process for the uninitiated.
Sales. In IoT businesses, sales departments often struggle to determine how to best take a combined product and service to market. New skills may be required, new distribution options may emerge, and field conflict (direct and channel) is not uncommon. Sales operations must consider changes to market segmentation, territory management, and resource allocation. Numerous opportunities may arise for distribution partnerships, and determining how best to approach partnerships and compensation can be complicated. (Channel compensation for subscription services with recurring revenue can be a particular challenge.)
Human resources. HR has the job of developing the human capabilities needed to capture the IoT opportunity.
Engineering. It is rare for a single company to have all the required engineering capabilities under one roof. Consider the breadth and scope that may involve communications and connectivity technologies (telemetry, WiFi, Bluetooth, Zigbee), electrical hardware engineering (sensor technologies, chips, firmware, etc.), and design and user experience. Developing these engineering skills is one big challenge; integrating them into a functional, integrated engineering effort is another.
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