TROY – With the exponential increase of new technologies and drive towards digital transformation of manufacturing facilities, the manufacturing industry is more exciting today than it has been in the last several decades. As Internet-of-Things (IoT) has transformed the consumer world, the technology has yet to be fully realized in the industry that stands to gain the most from it – manufacturing.
When it comes to implementing Industrial IoT projects, for years manufacturers have been encouraged to think and behave like startups: get in, fail early, fail often, and use those learnings to scale projects.
This is only half the battle.
While acting decisively is important, failing to also strategically plan for large-scale implementation can lead to well-documented failure to launch. Today, two of every three companies that begin IoT pilot initiatives often end up in a suspended state of what’s known as “pilot purgatory,” a term coined by McKinsey & Company that describes a promising pilot that never gets off the ground due to poor planning, project complexity, or a host of other reasons.
This of course is frustrating for those who are implementing the programs, for senior leadership that is asked to keep these projects alive because we’re “so close” to the ROI that was promised at the beginning of the project, as well as for those who get involved at a later date and have to make the changes.
Based on the experiences of manufacturers embarking on IoT projects the world over, here are a few ideas that can be applied whether you’re just starting, recently launched, or if you fear your pilot is at risk.
Ensure the Project has the Right Visibility
It is often extremely enticing to “go it alone” when piloting new technologies, especially if the price point is low enough to not require senior level buy-in. The thought that buy-in will be easier once ROI is proven is a noble thought, but rarely works out in practice.
The same holds true when considering involving other cross-functional departments. The IT team gets blamed for slowing things down, quality leaders may bring in their own success criteria and derail the project, operations managers might take control over the entire program, etc.
Competing initiatives, strategic direction changes, budget cycles, team turnover – these are only some of the realities that derail technology pilots. We’ve seen this play out over and over again, no matter how “mature” the innovation culture is at a company.
The truth is, companies that develop cross-functional technology pilot teams early and encourage as many stakeholders to get engaged as possible find better success. It avoids the painful iterations of evolving requirements late in the game, and ensures buy-in at all levels early (and any evolution of the project as a result is a good thing). It might appear to slow progress at the beginning, but it will accelerate the path from pilot to rollout.
Track Usage, Adoption, and Feedback
I’ve written on this topic before: The biggest barrier to the successful adoption of new technologies is the resistance to develop new habits. Proving ROI is not enough to go from a pilot to company-wide adoption. Your team need adopt the technology, use it regularly, and yes, even enjoy using it.
There is a certain critical mass adoption that is often required in order built enough momentum around new technology pilots. Establishing alignment early between IT, operations, maintenance, quality, and executive teams goes a long way. Pay attention to who is using the new system, how often, and where they’re engaging. Together, these factors indicate if and when users are enjoying the system, whether they’re getting utility out of it, if they are developing the right habits, and whether the system is getting the type of adoption that will make the rollout easier or conversely, more difficult.
Change Management and Competing Priorities
The plans for short-term technology pilots are relatively straight forward; if things go well, you bring in a new technology, test it in a sandbox to prove value, and you make a recommendation to purchase or implement on a broader scale.
That is when things usually start to fall apart.
If you haven’t planned for change management, you may realize not all stakeholders’ needs are accounted for, or competing priorities and timelines slow down the rollout, or that some aspect of the technology (e.g. integrations into existing systems) weren’t thought of, or that the disruption caused to existing processes (including re-training necessary) will be more harmful than helpful.
Alas, companies find themselves dragging out pilots to now validate and test the change management processes. And pro tip: In our experience, this drags on for a while.
Plan the change management steps and process early. Make sure you understand this process deeply and intimately, and ensure that it is incorporated in your pilot execution plan and success criteria.
Just Do Something!
Bringing in new technology comes with its own set of risks, and pilot programs are a good way to de-risk these efforts. Manufacturers might de-risk by limiting scope, investments, or time. Often this opens up bandwidth to de-risk decisions by piloting multiple technologies and vendors simultaneously.
But make no mistake – though you might de-risk the license fees, technology pilots are expensive, and such a large investment in time and resources also requires an unexpected skill: firm decision making.
Pilot programs often drag on into pilot purgatory as organizations keep expecting to “100% de-risk.” All that happens in these scenarios is that organizations continue to bleed without realizing, as pilots drag on and on and on, all because they’re always “so close” to addressing all open risk items. One way to address this is to define realistic success criteria and agree to move forward once that criteria is met. Address any new risks identified in Phase 1 of the rollout process. Repeat for subsequent phases. On the contrary, if criteria is not met, be comfortable saying “this did not succeed” and move on to find a better solution.
With technology evolving so quickly, it can be easy to get caught up in all of the excitement around trying something new. But by following the above steps, and being considerate of your company’s unique needs, culture and goals, you will easily avoid pilot purgatory.
By Anurag Garg, VP Product, Analytics & IoT, Plex Systems