Let’s take a look at one strategy. Using the basic equation “Thing + Information + Sharing = New Value Proposition", you can identify some things that may change going forward. But how can you do that for an organization? How can an organization that is structured around physical products execute on this idea to seize on the IoT opportunity and leverage its scale for major returns?
This is the third part of a series of four articles on “Project Management for the Internet of Things (IoT) Opportunity", where we explore this lucrative opportunity in practical terms. This article, Part 3, in the series, focuses on “A Compelling Strategy Driven By the IoT", where you’ll read about a case of betting a company’s future on the IoT. Part 1, looks at “What Does IoT Disruption Mean for Project Management?", defining the disruptive change and what it means. Part 2, “Where the IoT Is a Driver of Strategic Opportunity", looks deeper into strategic drivers at work. Finally, Part 4, “Project Management Essentials for a Successful IoT Project Portfolio," dives into the key elements you and your organization to strive for to exploit the IoT opportunity.
The IoT in Practice
Let’s take a look at Honeywell, which is poised as a major player in the realm of the IoT. We’ll look specifically at how the company is reshaping itself to be a major IoT player. As we proceed, keep in mind the basic ‘IoT formula’:
Thing + Information + Sharing = New Value Proposition
Honeywell has a rich industrial history of making ‘things’ – like thermostats, sensors, security systems, air cleaners, dehumidifiers, measurement instrumentation…
It’s a huge company – Fortune 500 – and I’m only scratching the surface of what they produce…but this short list is sufficient to begin to talk about how it relates to the IoT – where the value of each of these products is significantly enhanced when you add an information component to it and then facilitate sharing it.
This is the IoT in practice.
Change Happens Through Projects
As Project Managers, we all know that change is made to happen through projects. In other words, projects are at the ‘implementation edge’ of change. So, to drive the change to implement and leverage the IoT, we are going to need lots of projects…
How can we identify these projects? Back to our Honeywell example…
Honeywell has had to determine how it is going to move from being a leader in various product categories – like thermostats, sensors, security systems, air cleaners, dehumidifiers, measurement instrumentation, and more – to being a leader in the IoT space.
It’s all about how to get from the way the world is today…to the way the world is going to be – and it’s going to take projects to do it. So it takes careful thought and consideration – strategic thinking – to develop a great vision, which in turn will result in identifying the right projects.
Here’s what Honeywell has done.
- They identified those project areas, including those I mentioned above, that involve products that have great potential for enhanced value when you add information and sharing.
- They identified business units that were doing fine, but that were not strong IoT plays…and they sold or spun off those units and raised cash to finance projects related to their IoT strategic direction.
- It has been seeking – and finding – acquisition targets with strong offerings in information and sharing (i.e. primarily software companies) that apply to its physical product offerings.
- They created a new software development unit in late 2016 focused on bringing the best practices of software development to enhance its portfolio of physical products with value-added information and the ability to share it.
In this environment, where will the projects be? Clearly, Honeywell sees that developing software, particularly to enhance the value of its physical products, is the way to the future. Indeed, it claims that over half its 22,000 engineers worldwide are involved with software development.
Operationally, Honeywell will need to communicate value to customers, change many old processes, and map out a new organizational structure that will support this new order.
And it will need to organize itself to manage projects extremely well that get it from where it is now to where it wants to be.
Does the Honeywell example stimulate any ideas for how to seize the IoT opportunity?
This post is part of the series: Project Management for the Internet of Things (IoT) Opportunity
This series of four articles looks at different facets of the IoT Opportunity.
1. What Does IoT Disruption Mean for Project Management?
2. Where the IoT Is a Driver of Strategic Opportunity
3. A Compelling Strategy Driven By the IoT
4. Project Management Essentials for a Successful Internet of Things (IoT) Project Portfolio