Five Reasons Why Internet Of Things Projects Fail

IoT projects offer companies growth and optimization potential. But often, this potential cannot be fully used in practice. The five most common reasons why IoT projects fail.

Innovative IoT projects enable companies to establish new business models or optimize existing processes. However, when it comes to implementation, those responsible for the project face several internal and external challenges. On the one hand, the technical solutions must be derived from individual customer needs; on the other hand, the details must not be too much in focus.

The danger can quickly arise that customer needs are neglected, and products are developed without real added value for the customer. The mindset is probably the most critical success factor in successfully mastering the five most common stumbling blocks in IoT projects.

Customer Benefit Secondary

It often happens that those responsible for IoT projects subordinate customer benefits to technical requirements. However, the practice has shown that the focus on the actual goal is lost because too much time is wasted on technical details. Instead, the question of the added value of the product or service should always be in the foreground. If the business value is clearly defined, those responsible can make meaningful decisions.

The customer is at the center of all considerations: this view must be shared and supported by the entire team – ideally even the entire company. After all, what use are numerous technical functions if the user cannot use them correctly? An IoT solution that does not create any real added value for the user is a costly, useless gimmick. If all employees of the project have internalized the customer focus as the most crucial success criterion, they avoid developing past the market and the needs.

Also Read : What Is The Internet Of Things (IoT)?

Different Expectations

In technical fields of application, where there are many dependencies between physical and digital systems, numerous buzzwords stir up different expectations among the participants. Moreover, people from other industries are often involved in IoT projects, which further exacerbates this problem. Therefore, it is essential that goals, content, and requirements are formulated and, above all, easily understandable and that they are perceived equally by everyone.

The benefits of such a communication structure must be firmly anchored in the team’s common mindset so that all project participants can transparently exchange ideas and opportunities at any time. However, the fear of supposedly stupid questions brings with it the risk of ambiguity and misunderstandings. Therefore, opaque specifications and different target images in the complex IoT topic should be avoided with all possible results in the project’s success.

Exclusion Of Partners

Strong partnerships increase the chances of success of digital projects. However, partners are often integrated too late or not at all. For the project to be successful in the IoT environment, however, it is essential to have a well-developed network of partners by your side right from the start. All project members have the same level of knowledge and can contribute their expertise in good time. This is the only way for project managers to prevent misunderstandings and save time.

In addition, partners should be carefully selected: Economic factors play a role here, but also the question of whether one’s way of thinking and approach corresponds to that of the partner. Of course, this does not mean that everyone should bring the same ideas – on the contrary. On the contrary, the open exchange between several parties creates a constructive dialogue that drives the joint project forward. However, it is essential to have a typical attitude, especially for the customer focus and the utility that is to be created.

Dynamic Costs

The costs of IoT projects are much more dynamic than companies are used to from other projects. The fact that various interest groups come together makes a realistic evaluation difficult, even for existing use cases. Because the technical aspect is often in the foreground, a lot is invested in implementing the various hardware and software components. However, those responsible do not take into account that implementation and operating costs differ significantly for sustainable market success. It is therefore essential to consider the entire life cycle of an IoT solution. With this view, it makes sense also to seek external perspectives to develop a realistic overall picture.

Here, too, the mindset plays an essential role: Fear of difficult-to-plan budgets and schedules is out of place if IoT projects succeed. Innovation cannot be forced under enormous cost and deadline pressure. Instead, teams need certain freedom to achieve the best result in terms of a customer-centric solution. Failure is inevitable without a fundamental openness to dynamic cost trends.

Lack Of Management Support

The success of an IoT project essentially depends on its leadership. In practice, it often happens that those responsible have to deal with new interdependencies and complexities again and again when implementing innovative ideas. This has to support the respective management culture and deal openly with planning uncertainty and mistakes. The more intense failure is experienced as an opportunity for optimization in the organization’s mentality, the better IoT projects succeed.

Decision-making management and direct communication channels are the basis for successful innovative developments. Within the entire company, employees should also be made aware of the central importance of customer needs and the product’s added value.


Those responsible for IoT projects are challenged at various levels. For inexperienced companies, it is therefore usually worthwhile to view such innovative projects as a separate company. In this way, they can generally deal better with the new dynamic and do not face the difficulty of transforming the entire organization immediately. If the mindset of the responsible team is characterized by innovation, communication, transparency, and customer focus, the most important cornerstones for successful IoT projects have been laid.

Also Read : 7 Points-How To Get A Handle On IIoT Data Integration

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