My customers often analyze the potential of employing custom IoT solutions for businesses. The decision to invest in building them is not a simple one. It requires careful consideration of short-term, mid-term, and long-term aspects and operational capital management.
Short-term Reasoning
In the short-term, investing in custom IoT solutions may not be the most cost-effective approach. The upfront investment required to develop a custom solution can be substantial, and the benefits may not be immediately apparent. Short-term capital requirements often necessitate the use of one of the existing solutions. It is significantly cheaper to pay for the monthly/yearly subscription than to start the development process. Short time-to-market and business case validation are the additional benefits of taking this approach.
Mid-term Reasoning
The mid-term is where things get tricky. At this stage, businesses may still be unsure about the best approach to take. Custom IoT solutions can provide a competitive edge, but they also come with risks. The technology landscape is constantly evolving, and businesses must stay ahead of the curve to remain competitive. Therefore, it is crucial to consider the potential benefits and drawbacks of custom solutions when making mid-term decisions. That is a dangerous territory for the business to operate in. If customers find themselves in the mid-term stage, I typically recommend maintaining the short-term approach and continuing to experiment with several business cases. Once the offering starts generating stable income and predictable growth, it is time to face the challenge of implementing the long-term vision.
Long-term Reasoning
Once your business has approached the long-term stage, investing in a custom IoT solution is the best investment you can make. Tailored software and hardware infrastructure provide the flexibility and scalability needed to adapt to changing market conditions and technological advancements. They also enable businesses to differentiate themselves from competitors and create new revenue streams. The obtained flexibility is the greatest return on your initial investment. Moreover, custom solutions are often cheaper to operate than purchasing similar capabilities from the market.
When making decisions about custom IoT solutions, it is essential to keep the long-term vision in mind. The focus should be on business needs and opportunities, not just technology.
In conclusion, the decision to invest in custom IoT solutions requires careful consideration of short-term, mid-term, and long-term reasoning. While the upfront investment may not be immediately beneficial, the long-term potential for increased efficiency, productivity, and cost savings makes custom solutions a worthwhile asset.
At what stage is your enterprise? What is your plan to take it to the next level?