Potential hidden challenges for traditional industrial product company when implementing an IoT business line

Abstract

The global marketplace of today is constantly reshaped by technological innovation and competition. In this ever-changing environment companies that are built around traditional business models of manufacturing physical products and offering related services face great challenges when it comes to adopting new technologies. The IoT (Internet of Things) – a recent technological innovation - represents an impressive transformative force for such traditional product-oriented companies since it is offering a considerable number of new business possibilities allowing these companies to connect existing products on an entirely new level and offer brand new services based on the data collected and analysed. However, for traditional companies going into this realm the path is not without its challenges. Challenges can extend far beyond their own internal organisational capabilities and can come from their markets or customers who may be too accustomed to traditional product-oriented offerings and might not fully appreciate the transformative impact the IoT has to offer.

The objective of this thesis is to identify and propose actions to mitigate potential hidden challenges - briefly defined here as unexpected roadblocks - that traditional product-oriented companies encounter when implementing new IoT business lines. By pinpointing and proposing actionable insights into these potential hidden challenges, this master thesis aims to assist traditional product-oriented companies in minimizing the adverse effects they may cause. The thesis focuses on the challenges that traditional product-oriented companies face when implementing a new IoT-based technology business line and not just technological implementation.

The theoretical part of this master's thesis critically examines foundational concepts and aspects necessary for a comprehensive understanding of the nature of a digital technological innovation, including its driving forces and challenges. This understanding is necessary for the subsequent efforts in identifying and mitigating potential hidden challenges that traditional product-oriented companies face when implementing a new IoT business line. The research approach utilized in this master thesis is the case study and it employs a qualitative abductive methodology. This research methodology entailed conducting open interviews with a diverse range of individuals across various departments within the target companies during Christmas 2023.

The master thesis concludes that successful implementation of IoT-powered business lines in traditional companies requires proactive identification and resolution of potential hidden challenges, which is a complex task due to the subtle nature of such challenges. Key factors include long-term commitment from the leadership team, clear communication, investment in training, infrastructure, and a strategic alignment plan that will cover change, data, human resources, risks, and communication strategy. Taking a proactive approach from the beginning and doing a comprehensive assessment followed by detailed planning is critical addressing challenges, managing expectations, aligning departments, and ensuring a successful new IoT business line implementation.