This topic is close to our hearts because we use IoT hardware to collect real-time data which is a valuable feature of our waste and energy solutions. We use the data to serve up actionable insights visualized in a user-friendly, customized platform.
Since we work with an array of hardware vendors and manufacturers, we are very familiar with IoT hardware, the industry, and the nuances that go along with it. This hardware-agnostic approach allows us to provide the right hardware to the right customers. We align ourselves with solving problems for customers and bring together pieces of the puzzle that appear disparate in nature.
This setup gives us, the team at Sustain, a front row seat to observing trends we consider to be interesting, relevant, and helpful to any organization in the planning stages of projects that involve IoT technology—primarily in the context of using IoT hardware to elevate sustainability-focused initiatives.
This guide will touch on the state of IoT technology, the growing commoditization of IoT hardware, the ripple effect and risks associated with modern trends in IoT, and recommendations on how an end-user can mitigate the complications commonly shared or passed on from a hardware partner.
The concept of IoT technology is a brilliant one. The exchange of data across a network of devices is an endlessly useful thing, hence its ubiquity. It is becoming more prevalent every day, and organizations are increasingly poised to use this IoT technology to collect the data needed to improve operational efficiency and reduce costs.
However, the market characteristics for the businesses creating and taking to market these IoT solutions are challenging to say the least. Those challenges create a performance gap that can be daunting for customers of said hardware technology. Technology that seems simple in theory quickly becomes extremely complex because of the hurdles associated with hardware installation, end user adoption, systems integration, interference, exposure… You get the DRIFT.
Let’s Walk a Mile in Their Shoes
IoT Hardware has been 1000% commoditized. The boom of IoT, the democratization of development, and easy access to scalable manufacturing infrastructure are all contributing factors. The days of proprietary and closed-source hardware are over, and for the last 10 years or so, this has been an exciting frontier for inventors. The sustainability industry has been flooded with companies trying to get their piece of the IoT boom. A quick google search for “energy sensors”, “plug load control”, “smart thermostats”, or “waste sensors“ is all you need to figure out that there are a LOT of companies trying to capitalize on the need for buildings around the world to reduce their footprint and save money.
“Red Ocean” is the common business school term to describe when companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth reduce. Products become commodities and cut-throat competition turns the ocean bloody red.
This sort of competition isn’t inherently negative, BUT, understanding the misalignment this can create, and how that might affect your bottom line results is VERY important to ensuring your performance gap is as small as possible, and preferably eliminated.
Let’s take a quick look into the specific challenges a “red ocean” environment creates for a hardware manufacturer. This will provide some context for the driving factors of Performance Drift:
1) Price Points: To be competitive, you need to enter the market with a good price point, lots of hardware, and therefore lots of cash $$$.
2) Here come the sharks (investors): Even with all that money, forget about getting in the lab and perfecting your product. You better start selling something, fast, or risk being swallowed up.
3) Product Distribution: A byproduct of the previous factors, many don’t have the time, cash, or expertise to get their product to market at scale. Without distribution partners to buy into the opportunity, your impact will be minimal.
4) Technology Risk: IoT infrastructure is constantly and rapidly changing. Unless you can somehow predict product-market-fit, it can leave potentially leave companies stuck with inventory on the shelves.
5) Differentiation: Being one of many means you have to constantly innovate and differentiate. That game-changing hardware solution you just created, is practically outdated in the time it took you to read this blog.
How Does This Affect Me (The Customer)?
Unless you, a family member, or a friend works for IoT hardware company you are probably thinking to yourself, “How does this affect me”?
The answer lies in the challenges that are omitted from the list above. Unfortunately, it is the following questions that are left unanswered, placing the burden squarely on customers shoulders, with no existing blueprint to lead the way.
1) How do we help our customers get buy-in across multiple departments, at the enterprise level?
2) How will our customers actually install and use this stuff at scale?
3) How will our customers integrate this into their IT department’s IoT plan (if they have one)?
4) What will happen if our customers don’t save money, and the project doesn’t work out?
5) How do we fit in with all of the OTHER solutions our customer already has?
6) What will our customer do when their current hardware is outdated in a few years?
7) How will our customers engage their building/facility occupants with this technology?
8) What happens to our customer if end-user behaviors eliminate or diminish the result of their project?
9) What fail proof things can we do for our customers in the event we get bought out or go bankrupt?
The big question: How do we reduce “performance drift”, and eliminate the “performance gap” that exists for our customers?
It is the failure to have answers to these questions that have customers (distributors, or direct customers) of said hardware providers facing a mountain of challenges, a big bill from the hardware provider, and no blueprint for success. Many companies decide to try and take this problem head-on, without any help or build their own solutions internally. While some succeed, at the bare minimum it causes quite a few headaches.
One could argue that the risks of performance drift are intensified for sustainability professionals who are frequently expected to do more with less—all without interfering with regular business operations. A project requiring IoT hardware to produce a desired outcome can easily thwart future sustainable investments if it’s perceived as failed or disruptive. With every hiccup, internal buy-in could be on the line, and end-user buy-in, as you know, is the engine, fuel, and tires of a sustainability project.
That being said, you can’t solve problems without taking some sort of risks and the innovation in the sustainability field has been nothing short of incredible. Instead of being paralyzed by fear of failure, let’s talk about what you can do to give yourself and your company the best chance to succeed.
Ok, So How Do I Eliminate Performance Drift?
Caveat: This is just one person’s opinion based on experience, so make sure you dig into other industry experts (there are lots of awesome companies working to solve this problem). At the end of the day, you should trust your gut.
1) Accountability: Everyone should have skin in the game, especially the company you buy IoT hardware from. Now, no company can solve EVERY internal challenge for you, but you should put real pressure on their technology and services to deliver. Hardware should work how its supposed to, you should have the latest and greatest tech, and the manufacturer should have a stake in your success. Layout very specifically what the scope of work is, who should be doing what, and the performance that is expected.
2) Limit your exposure when possible: Always ask yourself, how much hardware do I really need? What is the least amount of hardware that I have to buy in order to get the desired result? Software is often an amazing way to eliminate the need for mounds of hardware. Take what you learn from a small sample of data points and use advanced analytics to improve the rest of your potential applications. Think very specifically about your situation and what makes sense.
Example: If you have 2,000 restaurant locations with similar waste footprints, you might not need waste sensors on every single trash container you own. Get data on a reasonable set (20-30%) of different types of locations, under different scenarios, and then use analytics to apply what you learn to others.
3) Think SCALE: Be a stickler on the details of your installation and ongoing maintenance agreement. Stay involved in the process while you are evaluating which partner and/or technology is the right for your needs. If you do a “trial” of sorts, make sure you get answers to any operational challenges that come up. Remember, it’s a trial so don’t expect everything to go perfectly smooth (see number 4), but use the results to ensure your vendor’s scope of work incorporates elements that are needed for things to be successful. If it feels like a nightmare, SCRAP IT and find something else to spend your time on.
4) Think BIG: When dealing with new technology, even after a “trial” it is tempting to think small, and to “try things out” little by little. In reality, this isn’t good for anyone (even you). For your vendors, they are stuck in this limbo of balancing an “opportunity” to help your business, with internal pressures on cash flow. Doing things “little by little” can be harmful for them, which forces many to provide a mostly half-baked solution, at a higher price, and unable to afford the cost it takes to solve your problems for you. Once you believe that you have the right partners (hardware/software/service/etc.) to help solve your problem, go ALL IN. Helping them help you will make sure they have the resources needed to deliver an awesome experience. This sort of partner “ALL IN” approach has historically helped solve some of the world’s biggest problems.
5) Think outside your office: We get it, you’re trying to save the world and save money, but not everyone is on the same page and you are going to need everyone on board in order for your project to be successful. Finding the right balance of implementing hardware that saves energy/waste/water without making everyone’s job harder is paramount. Think less like Greenzo and more like Leo.
6) Double down on your behavior change program: We all want it, but there is no hardware solution that ensures people engage positively with sustainability technology in a way that helps you optimize results. The reality is that you can spend millions of dollars on IoT hardware that helps you save money when people are NOT in the office and in your facilities. However, incentivizing people to conserve energy, unplug their devices, conserve water, recycle, compost, and other sustainable behaviors is a much tougher task. If you can crack this nut, then the impact for ALL your projects will be off charts. Furthermore, those expensive and tertiary hardware applications that exist only because (for example) people won’t turn off their lights can be eliminated completely. I could go on and on here but we will save that for another day.
You can’t control what you can’t measure!
7) Measure everything and react to data fast: Measuring pre and post-implementation data for all sustainability projects (energy used, waste diverted, GHG emissions, etc) is fairly common practice. However, you will want to make sure that you consistently react to new and updated data as you go. For example: The “off” schedules for your energy management system might work perfectly for the first 3 months, but if occupancy patterns change you have to be ready to adjust on the fly.
8) Share your successes and failures with your team and community: Give yourself and others a HUGE leg up by sharing best practices, as well as not so good practices. Don’t be afraid of admitting failures as well. They show transparency and can often help rally your team and reinvigorate your message! An open and thriving community around sustainability solutions will go a long way to eliminating the IoT hardware performance gap.
Written By: Andrew Williams
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