Internet of Things (IoT) technology is no longer a story of the future. This year alone, markets worldwide will see an estimated 26 billion connected units go online. With this scale, many companies are asking: How can we get a share in these markets?

By Mark Olson, Managing Director, Accenture

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Implementing IoT connectivity can be challenging. Find out if your product is ready to become smart. | Image:


More and more businesses try to create IoT-enabled products, often by taking what they already have and connecting it to the web of connected devices in the home and workplace. But such efforts, while feasible, aren’t as straightforward as they may seem, and sometimes result in products that don’t make sense either for the business or for the end user. Making a successful IoT product takes customer-centric thinking, careful planning, and specific skills. Here’s what we mean by this, plus some steps which might help you succeed.


Successful IoT products

Around 25-45 percent of all new products fail. In a quickly evolving IoT landscape, some become hits, but some are dead on arrival to the marketplace.

What separates the successful products from the bottom of the barrel? If we look at the ones that have done it well, we can get an idea of how the teams behind them made their products compatible. We can also learn from what they’ve done and apply their lessons to making a new product. 


How to implement IoT

Implementing IoT connectivity can be confusing. Especially if you haven’t yet done so in your company. What are the steps necessary to connect what you’re already offering to the network? What about creating a completely new IoT device? We’ve summarized a few of the questions and factors that need to be explored.


Value of connectivity

Before you dive into making an IoT product, you need to make sure your product is more valuable to you and your customers if it is connected.

Can the product collect useful data? Most things can collect data in some way. However, not all of that data will be useful to you or your end users.

If my local energy utility tells me that my power consumption was higher than normal last month, it’s interesting. But I’ve already used the power and paid the bill! If I get the data sooner, I can act to save energy. If I’m also given information about the time of day that my household is using more power, I can understand even more about what actions I could take. For example, if the energy consumption is at dinnertime, maybe I’m just cooking at home more than usual. If I’m using the energy in the middle of the night, maybe I should change my thermostat settings. The value in the data comes from the insights and decisions that the data support.

Can you integrate the IoT data into your business practices? Will you be able to act on the data provided to create better service for your customers?

A successful IoT product should have a simple and strong story for how the data provides value.


Costs of connectivity

Connected devices have a number of costs that a disconnected standalone product would not. It’s important to factor these into the business model for the new product.

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  • What are the manufacturing costs? Is there a clear way to recover the cost of adding connectivity to the product? This could be a higher selling price, but more often now it is through ongoing service or subscription fees.
  • What are the ongoing costs to support the device? Will the product generate a lot of data that needs to be stored in the cloud? Does the product rely on computationally demanding cloud services like voice recognition?
  • What type of end user support will you need to provide should things start to break or need upgrades?

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Marketable product

Sure, you technically CAN make anything IoT compatible. But is it worth the effort of doing so? While a Wifi-enabled watering can might sound like a neat idea, the demand for such a device might be ... limited.

If you have a story for the value of your connected product, and you’ve started to understand the costs, it’s also important to make sure the product is marketable. Is it easy to communicate the value of the product to your potential customers? Do they understand it, and are they ready to pay for it?

For a new product, especially in a new category, it is important to focus. What is the single biggest value that your IoT device will provide to the end user? Can you communicate that value easily?


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Be careful when adding features. Each feature has a cost of development and also adds complexity to the product. Many companies will add features because they hope the extra features will make the product more appealing. Sadly, what often happens is that a simpler product would have been more delightful to use and provided a stronger overall value.

A powerful way to determine if your product is compatible with connectivity is to prototype your devices. Take an incremental approach before you go headfirst. Prototyping the experience and engaging with actual customers will help you create a successful user experience, and also drive a better understanding of potential costs. You’ll spot issues in ways you wouldn’t have predicted, and the product that reaches the market will be stronger.


Technical and design decisions

So, you’ve determined that your product concept is understandable to your customer, it can provide real value, and the costs fit into the business model. There are still plenty of topics that need attention.

There are several connectivity options to consider. Most consumer IoT devices connect to an app of some kind for users to control them. They usually do so either through Bluetooth or WiFi, though smart home devices often use specialized protocols like Zigbee, and increasingly we see devices that connect to the internet using cellular technology such as NB-IoT or LTE-M. Each technology has pros and cons, depending on where and how the device is used and the costs that the business model can support.

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of all returns for customer devices are attributed to something other than defects. 

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Security is critical. The number of IoT devices and the inconsistent security practices of device manufacturers have made them targets for increasing numbers of cyber-attacks.

"Hardware is hard," might be a favorite saying among hardware engineers, but it is actually becoming easier to create a new connected device or add connection to an existing product. Prototyping has become simpler as low-cost development boards, prototyping kits, and so on become available for companies to use. These off-the-shelf hardware components mean companies don’t have to start completely from scratch and can quickly start testing ideas.

As the ideas get proven, the off-the-shelf development boards and 3D printed housings may be superseded by optimized custom electronics and injection molded plastic parts that can be produced in high volume. These detailed design and engineering phases, to create a true mass-producible product, require many specialized skills and significant investment. Good up-front research and prototyping to get real user feedback can give you confidence that the product is on the right track and these investments will pay off.

Software is everywhere in an IoT solution and is often the biggest single area of effort for a connected device. For an IoT device, there is the embedded software running on the device hardware, cloud software working behind the scenes, and app software on a smartphone or computer. All these elements, and others, must work together seamlessly. This ecosystem requires a lot of code, and also a lot of testing, to insure that the system performs well in a range of conditions.

Great design and a carefully crafted user experience can pay off far beyond making the product more appealing. The task of setting up a new IoT device can be daunting, and the out-of-box-experience is key. The entire process, including every step of connecting the device, installing software, and learning to use the product must be carefully designed and supported. Support calls and product returns can crush the profits of a new product.

The return rate for consumer devices is estimated to be 11-20%, and 95% of returns are attributed to something other than defects. The product may be performing as designed, but it is not performing to the satisfaction of the user.

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It isn’t necessarily a bad idea to create something that’s already out there. It means there’s a market for your product.

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Industrial or professional products may not have the same return rates, but user expectations are now just as high. And since many IoT products rely on service fees or subscriptions, ongoing product loyalty is critical to business success.


What to do if you already have a competitor?

You’ve gone through all the steps. You’ve figured out what you need to do for your software and hardware. You’ve figured out how to convert your product.

But then you discover that someone else has already created the product you were planning to implement. The horror! What do you do?

It isn’t necessarily a bad idea to create something that’s already out there. In fact, that can be a good sign. It means there’s a market for your product.

What you’ll have to do is find a way to position your device, so it provides MORE value to your audience. What can your device do that the other one can’t? What full-picture value can you provide to your end users to show them you truly have their needs in mind?

If you can show your audience how your product is different from your competitors’, you’ll have an edge in getting your product on the market and selling it.

If you’re not sure if your product is IoT compatible, check out our checklist.

It’s not always a good idea to convert your product to an IoT device. But, if you have a marketable product that provides value, and you can integrate the necessary hardware and software, you’re on your way to having a successful, connected device.


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About the author


Mark Olson

Mark is Managing Director at Accenture's Industry X. He helps organizations to develop new physical and digital products in a range of industries from consumer products to industrial equipment, medical devices, and all areas of the Internet of Things. Get in touch with him via LinkedIn.


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