Developing an IoT strategy: 5 challenges in IoT deployment

August 24, 2022

In the first two parts of our IoT series, we discussed what the Internet of Things is, along with the potential applications and benefits set to be gained by different industries. Let's now move on to the implementation of IoT.

How can businesses develop an IoT strategy? What challenges do they need to overcome when implementing the Internet of Things? Andreas Rehmann, Head of IoT solutions at mimacom, answers key questions in this interview.

The five biggest challenges in IoT implementation

IoT challenge 1: Matching the hardware to the software

mimacom: Andreas, as Head of IoT, you're an expert for mimacom's software solutions in this area – but what about the individual hardware at customers? What role does this play in IoT implementation?

Andreas: One of the most common challenges in IoT implementation involves the coordination of hardware and software. At the same time, it's a fundamental aspect of successful IoT integration. Depending on the company and application, it can vary in complexity. For instance, changes to centrally operating software can be easily developed and rolled out in short cycles. Yet things get more complicated when it comes to in-house hardware.

1. IoT connection of central software

Let's say mimacom implements software – an after-sales portal – at one of our customers. We start with a few selected functionalities and test them. In the process, we collect data and feedback from customers, and we integrate this feedback into further software development. Corresponding improvements are made available on an ongoing basis, and our customers benefit from their continuously optimized IoT portal right from the start.

2. IoT connection of local hardware

The development of IoT hardware is far more complex: This calls for production capacity and certifications. Changes cannot be done simply by mouse click – but require an actual device exchange on-site.

If we bring this software and hardware together through IoT, we now face the challenge of matching the two. If our customers wish to integrate machine data into their after-sales portal, new sensors and actors may have to be installed in their hardware. Data can be displayed in the central IoT portal only by controlling the associated hardware.

IoT challenge 2: Deciding on a central operating model

mimacom: When implementing IoT, companies have to make some fundamental decisions. The decisions they make at the beginning determine what will be possible in the future – and where problems will arise. In your experience, which decision can be the most challenging?

Andreas: In my opinion, it's the operating model. You can operate the system centrally through the provider or on-site directly at the company. You actually achieve maximum complexity when you operate the system both centrally and at individual customers.

In the case of centralized operation by the provider, operating expenses and infrastructure costs are incurred by the provider. If the company runs the system, the costs are usually at the customer end. Since different operating models usually require different system architectures, this quickly results in additional work for companies that run each operating model individually. Businesses thus need to decide at an early stage about whether or not to introduce a uniform system. Subsequent changes can lead to high additional costs. Both options have their justification. Industrial sector customers, in particular, often have data that they may not want to hand over to a centrally operated solution – typically out of fear of misuse. But more on that later.

IoT challenge 3: Developing the right IoT strategy

mimacom: In your previous blog posts, we learned how versatile the application areas of IoT are. You gave some general tips that all companies can follow when they decide to implement IoT. But what challenges do customers face based on their individual requirements?

Andreas: The IoT strategy a company should pursue depends on many individual factors – as typically revealed when it comes to connectivity. These challenges are closely related to the operating model. The spectrum from which customers must choose the approach that suits them ranges from devices and gateways that can independently establish a data connection via mobile communications, for example – to devices that use an existing network infrastructure on the customer side.

The approach companies take sometimes depends on their operating model. Companies with high data protection requirements – like in the financial sector – intending to operate an IoT solution in their own infrastructure will naturally want to use their own network. For companies that rely on mobile devices or a centrally managed solution, it often makes more sense for the device itself to be able to establish a data connection.

IoT challenge 4: Choosing between individual solution and standard version

mimacom: Different customer needs require different IoT solutions. As a rule, do you recommend that companies rely on customized IoT applications?

Andreas: It's not always worthwhile to develop an individual system. In some cases, well-functioning solutions are already in place – which you can simply adapt to your own needs relatively easily. This decision depends on three factors.

  • Are effective solutions available?
  • Can a pool of expertise be drawn on for implementation?
  • What are the applications to be mapped?

In either case, businesses should make an informed decision for either one or the other approach.

IoT challenge 5: Implementing IoT projects step by step

mimacom: Once companies are aware of ideal applications in their business – having researched deeply about the Internet of Things – they can get straight down to implementation, right?

Andreas: It's advisable to start with a comparatively small and simple application and implement it ready for production. Doing so allows companies to gain experience and obtain feedback from their customers with little effort. The following steps can then be planned based on customer feedback. For the further course of an IoT project, it has also proven useful to gradually roll out functions that are as definable as possible – one after the other.

Procedure and strategy for IoT implementation

mimacom: When does the Internet of Things make sense for companies?

Andreas: Not everything that's technically feasible has to be implemented technically. IoT always makes sense when companies can create added value through connectivity.

mimacom: How do companies ideally start the introduction of IoT?

Andreas: Apart from the technically motivated criteria, companies should involve their customers early. This is the only way they can ensure truly useful applications are implemented. They should engage with their customers regularly to hear their feedback and implement necessary changes. The input should be considered when selecting new functionalities and further developments.

Connected solutions usually involve hardware – the selection, procurement, or even development of which is highly intensive in terms of time and costs. In line with this, it might be helpful to implement the first application based on the technical capabilities of existing hardware. Doing so helps companies gain initial experience that forms a basis for further hardware development.

In summary, this means for the start: Companies can use their existing capabilities of already existing hardware in the first step of the IoT implementation. Doing so allows them to implement an initial, small application that's useful for their customers and instructive for their company.

Industry-specific challenges with the Internet of Things: Manufacturing, financial industry, and healthcare

mimacom: Andreas, you focused on the manufacturing sector in the five challenges you discussed. Do the same challenges apply to the financial industry and the medical sector?

Andreas: Yes and no. All sectors have their specific requirements. For instance, companies have to consider numerous legal requirements and compliance guidelines in the financial industry. In healthcare, there's an even greater need than elsewhere to protect personal data – typically that of patients. And in manufacturing, the protection of trade secrets is highly relevant. Yet many of these challenges can be applied to almost any industry – so it makes sense to address all of them before implementing IoT.

Problems with the Internet of Things and why expertise is essential

mimacom: Are there also areas where significant disadvantages arise for companies due to the Internet of Things?

Andreas: I see three areas where companies often face problems. That makes working with experts or gaining extensive know-how necessary to avoid drawbacks in IoT implementation.

1. IoT - IT security and data protection

Unlike traditional IT, IoT devices interact directly with their environment. Since these devices (located directly in the company's own network) – such as sensors – are often connected to a network and linked to the third-party cloud, it is possible to access them from the outside. It's therefore essential to adequately protect built-in sensors against unauthorized access.

The subject of GDPR can also be an issue – depending on the industry's requirements or the application. At mimacom, we have banking, insurance, manufacturing, retail, and healthcare experts. They know the guidelines, and together we can develop secure solutions.

2. IoT - New error scenarios

With new technology, new errors and new scenarios naturally occur. We must consider that. It's not always possible to say in advance what kind of effort and expense a company will face. That means it's always essential to work with an expert in order to be able to react quickly in an emergency.

IoT - Complexity

The five challenges outlined above already speak for themselves. The complexity of a new project can be overwhelming and daunting at the beginning. Here, too, experts can accompany a project from planning to implementation.

How can mimacom help in an IoT project?

Andreas: Having been developing digital IoT solutions for a very long time, we've gained tremendous experience in this area – especially in the manufacturing industry. We successfully implemented a customer portal for our customer Hauni. The "Digital Accelerator Program" is certainly exciting for the approach to any software project and any IoT project (hardware and software).

Back to overview

The author
Andreas Hirsch
Andreas Rehmann
Head of IoT Solutions
Andreas drives IoT-based business models at mimacom, calling it "the most important technology in everyday life." He is convinced that the IoT unleashes the full power of what can be achieved with technology in the first place, and so will continue to grow in importance.
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