Business Strategy and Innovation Framework
5.3 EVALUATION
5.3.1 BUSINESS CASE CALCULATION
The range of opportunities associated with IIoT is so vast that one of the most important tasks facing enterprises is to assess and prioritize the potential opportunities in an effective way .
This section examines three methods to narrow the list of candidates : business case calculation , business case challenges and impact and risk assessment
After calculating the total cost of ownership of the solution for all parties in the network , allocate the expected returns among the various stakeholders appropriately . This may require an extreme degree of openness and cost transparency between the parties , which underlines the importance of trust and strategic partnerships within the ecosystem .
Historically , most IT business cases were analyzed on a standalone basis , not in the context of an overall enterprise strategy . For an IIoT business case , an enterprise must consider how its business might perform should it decide not to adopt IIoT concepts . It must also ‘ share ’ the costs of developing generic IIoT capabilities among current and future IIoT projects . Often , the business cases that underpin IIoT projects are more analyses of existential questions than simple analyses of costs and revenues .
One consequence of this is that business cases for IIoT initiatives should account for two elements : first , the ‘ local ’ ROI based on direct costs and revenues ( including the impact of selling into new markets , an enhanced customer experience and new services ); second , the wider business impact in terms of overall business continuity and operations , market reach , and competitiveness ( see Figure 5-4 below ). In many cases , it will be necessary to adopt IIoT initiatives to maintain competitive positioning , rather than to generate significant new returns .
Figure 5-4 : Business case context ( Source : Enterprise-IoT . org )
Use a range of real options for both ‘ local ’ and ‘ overall ’ business cases to assess the benefits of a candidate concept in the context of various specific market development scenarios . Then assign probability values to them to gain insight into expected benefits and potential downside risks .
Assess the potential for ’ local ’ business models enabling subsequent ones . Reusing assets such as infrastructure and data is common in the IIoT world . For example , combining data generated
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