INTERNET OF THINGS – FROM BUZZWORD TO BUSINESS CASE

How to accurately calculate the ROI of IoT initiatives

Our experts Dr. Peter Louis, Gerhard Geisert and Rainer Blessing describe a systematic approach towards assessing the financial impact of your IoT investment.

EXCERPT

Everybody is talking about the Internet of Things – a buzzword supposed to magically solve all challenges inherent in digital transformation. With such projections, company leaders feel the urge to invest in IoT but are often held back by a lack of accurate and credible calculations for the expected return on potential initiatives.

According to our HBR pulse survey, 80% to 90% of respondents can’t accurately measure ROIs for their initiatives [1]. And not to lose traction against their competitors, some companies even start initiatives or projects without a proper business case at hand. Unsurprisingly, failure rates of digital transformation initiatives lie in the range of 60% to 85%. The good news is that most of the elite group that do measure returns are seeing relatively quick paybacks.

Two main aspects must be considered when calculating the ROI of an IoT initiative.

1. Modelling impact chains provide transparency from A to Z.

2. Including uncertainty in the ROI calculation increases the credibility of the results.

In our whitepaper INTERNET OF THINGS –  FROM BUZZWORD TO  BUSINESS CASE - How to accurately calculate  the ROI of IoT initiatives, we share insights to enable you create value when optimizing processes or generating new business models out of data.
 

[1] “Accelerating the Internet of Things Timeline,” Harvard Business Review Analytic Services, Pulse Survey, 05/2019

 

Authors

Peter Louis
Peter Louis
Senior Consultant
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Gerhard Geisert
Gerhard Geisert
Senior Consultant
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Rainer Blessing
Rainer Blessing
Associate Partner. Digital Product Development
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