This week, Nick (Chief Product Officer at Daizy) headed over to The Things Conference in Amsterdam to join a panel discussion on the Total Cost of Ownership (TCO) for IoT deployments.
This is a very common topic in many of our customer discussions, so, to help you plan your IoT strategy, we’ve put together our top five takeaways from the discussion.
1. Be clear on the value, not just the TCO
The first takeaway is perhaps the most obvious but is also the most commonly missed.
Being clear on the value you’re looking to gain from an IoT deployment is just as important as the TCO, and should be quantified to the same degree. TCO only becomes useful when you can understand the ROI and can compare that to the existing or alternative approaches. Critically, ROI also ensures that the ‘why’ for your project remains at the centre of your thinking.
2. The number and duration of visits to a sensor can balloon TCO
Installing a sensor correctly on the first visit can massively reduce in-life maintenance costs.
The most common reason for a return visit is to replace batteries. Battery life can be severely impacted by the following factors:
- Misconfiguration – devices sending messages too frequently or having features enabled that aren’t required
- Poor signal strength due to gateway or cell tower proximity (more common with inbuilding deployments) – this can cause increases to the spreading factor which uses more power
Many of the factors that lead to a repeat visit can be avoided by:
- Ensuring the device is online and talking before leaving site
- Having automated downlink capability to automatically configure devices when they connect. This capability also means devices can be reconfigured in bulk when new optimisation strategies emerge
Many of these issues can be avoided by using commercially available toolsets for project managing and deploying devices.
When repeat visits are unavoidable, the most efficient approach is to adopt a ‘swap out’ strategy where the existing device is replaced with a tested device that already has fresh batteries. This saves time on-site and reduces disruption for e.g. tenants or workers. The software tools exist to facility this swap out approach without the need to reprogram applications that are dependent on the sensor data.
3. The TCO of a Pilot does not equate to the TCO of a deployment at scale
Many Iot Proof of Concepts (PoC) fail because the project team are learning on the job, and as a result are perhaps using a more manual approach.
Applying the TCO of a small scale PoC, of say a hundred devices, to a fully scaled deployment in the thousands will obviously raise TCO alarm bells.
However, adopting off-the-shelf tools can mitigate so many of the challenges that will have come to light – reducing deployment timescales and costs. These should be factored in when looking at the TCO for a full-scale deployment – in-short, avoid simply multiplying the PoC TCO to generate costs for a scaled deployment.
4. Don’t reinvent the wheel
Most if not all aspects of your solution already exist via best-in-class partners. Take a comprehensive look at what is available before deciding to build yourself, and free your team to focus on what differentiates you from your competitors.
From connectivity through to device management and deployment toolsets, most of the plumbing you need to get your application up and running already exists and will likely be far cheaper than building and maintaining in house – reducing time to market and improving TCO.
5. Avoid siloed data
As Nick mentions in the discussion, most CFOs will only sign-off expenditure on a project if it stacks up on the first use-case. However, that shouldn’t preclude consideration of how the data and solution could be used in the future to deliver new use-cases, or to derive additional insights from the data.
With this in mind, it’s important to ensure data isn’t siloed into a single application, or that additional expenditure is required to extract the data.
Bonus takeaway
Although the focus of the discussion was on TCO, Dane Ralston from our partner iOPT made a great point that we couldn’t leave out:
6. The success of an IoT deployment is about more than just the TCO
Although TCO is a critical factor in determining the viability of an IoT deployment, one factor that is often overlooked is the ‘people’ aspect.
To put it bluntly, the CFO might sign-off on the TCO, but if the people on the ground aren’t bought in, the project will never get off the ground. It’s important to tackle concerns and barriers head-on with a change management strategy built into the roll-out.
Existing processes might need to change or evolve, and a mapping exercise to look at current processes vs. a future ‘post deployment’ state is a great way to approach change management and is also likely to highlight any additional issues that may not have been considered in the initial project design.
We’d love to discuss your IoT projects in more detail, please get in touch if you’d like to catch-up. In the meantime, you can watch the full discussion here (the TCO session starts at around the 4 hour mark):
