4 Common IoT Implementation Challenges and How to Deal with Them

4 Common IoT Implementation Challenges and How to Deal with Them

The notion of IoT and its implementation

The Internet of Things (IoT) is an ecosystem of physical objects with installed sensors and actuators that are connected with computing systems applying wired or wireless networks. It allows users to monitor and even control the physical world. In addition to data and analytics, which IoT provides, such constant connectivity will enable companies to get new opportunities to innovate products and services. Furthermore, IoT enables the increase of the efficiency of operations.

IoT applications are crucial in numerous industries including human health covering devices that are attached to or inserted inside the human body; smart home, represented by such devices as home voice assistants, security systems, etc.; retail environments, characterized by devices facilitating self-checkout or extending in-store offers; offices, where IoT applications impose energy management or security for buildings and many other fields like production environments, vehicles, cities, outdoor settings, and so on.

Even with IoT’s advantages for business, some factors constrain adoption. Firstly, there must be change management as capturing value at scale requires collaboration across functions to get new behaviors. Secondly, interoperability issues and installation challenges are to be handled. Finally, cybersecurity and individual privacy cause many concerns. In addition, focusing on new technologies in isolation often disables to catch the business value generated by the technologies and slows down effective digital transformations.

Challenge #1: ROI

Considering the challenges precisely, one of the main ones is the problem with measuring the return on investment (ROI) of IoT initiatives. Most executives struggle to do it accurately, and it raises their doubts concerning the impact and value of IoT for their businesses. ROI is found as the extent of the difference between profit and the cost of the investment considering discounted cash-flow calculations.

Overcoming ROI challenge

To eliminate this issue, executives have to define the business goal of the initiative very clearly. The actual business value is the core point while calculating the ROI for solving a business problem and creating a lasting impact. Another crucial point is to consider the overall effects of IoT solutions on business strategy, organization, culture, and people. As technical costs accompany change management costs, those are spent on adapting processes and expenses on correlating tools and skill development.

Challenge #2: Change management

Many research results demonstrate a relatively high failure rate for IoT projects due to various IoT challenges, especially those in the people domain. The lack of engaging all employees in digital transformation efforts is one of the most widespread. Even with the technological nature of IoT, it is a people business, and when the employees are not prepared for all processes accompanying IoT implementation, it becomes the stem of failure.

Overcoming change management challenge

Cultural transformation, which is necessary for an efficient transition to IoT, becomes successful in the case of a structured change management approach at the starting point. There has to be integration across tangible and non-tangible elements of the transformation. Social factors need to be considered equally with technological and process aspects. An additional crucial moment is to develop an agile approach and flexible concepts among employees as the transformation process is often characterized by unexpected changes in needs and objectives.

One of the variants to launch change management is to check if the employees are ready for a transformation. Unless they have digital core competencies, new and changing job requirements can be implemented. Setting a digital environment requires change management in communication, leadership, team configuration, and following training. Furthermore, certain people can get proactively engaged by gaining the roles of supervisors of other employees, and then digital transformation becomes clearer through having particular functions and training opportunities.

Challenge #3: Cybersecurity

The risk of cyberattacks remains one of the main points of worry. The wider area IoT covers, the bigger surface for digital attacks. It increases companies’ vulnerability and consequently makes executives think of ways of defense. The latter may be necessary for securing customer and industrial data and protecting it from such phenomena as ransomware. The vulnerable surface becomes more expansive due to combining operational technology (OT) and IT. Cyber challenges amplify in correspondence with increasing, diversification and complicating the connections between OT and IT. Thus, cybersecurity is responded to be an issue requiring close attention or even causing top concerns.

Overcoming cybersecurity challenge

It is essential to accept that even the presence of complex cybersecurity defenses provides protection for the IT world mainly. OT network is often neglected and consequently leads to additional risks in the IT landscape. Embedding security into IoT projects and establishing threat risks must occur in the planning phase. Such a risk-based approach prioritizes vulnerabilities and turns prevention into a consistent answer on how to aggravate breaking into the systems.

IoT environment necessarily requires a risk-driven strategy, and cybersecurity departments must monitor and control all endpoints and devices during the entire lifecycle. Additionally, it is essential to apply effective threat-monitoring solutions.

Challenge #4: Asset management

IoT serves to connect assets with digital environments and data analytics; therefore, it enables asset monitoring and tracking. Furthermore, it manages resources effectively and optimizes maintenance, which is indispensable in the manufacturing environment. In case predictive maintenance is measured, there are fewer chances for unexpected production downtimes, and it results in ensuring production and supply chain functioning.

The decisions made on a data-driven basis can optimize maintenance schedules and upgrade investment decisions. Nevertheless, the question of the actual realization of how OT and IT correlate, especially regarding aging, proprietary, and manufacturing assets, provokes difficulties. The significant amount, diversity, and complexity of assets represent the consequences of IoT implementation. Notably, striving to adapt many diverse IoT technologies simultaneously or localizing more assets in real time may cause a number of difficulties.

Overcoming asset management challenge

A gradual and structured approach represents the solution in this case. Existing machinery must be equipped with sensors and connectivity step by step; therefore, it allows people to analyze data and get valuable insights from each separate machine. As a result, such an approach enables executives to optimize existing assets and manage costs. The production line will also gain minimal impact in the case of careful testing and control since it is possible to grasp the overlooked value of IoT in such cases. Considering processing and evaluating the information assets provide, the solution can involve IT experts, domain experts, and data scientists.


Concluding IoT implementation and possible challenges, the first thing to remember is the necessity of a thoughtful business case benefitting people and society. People’s factor also is vital while acquainting employees with the transformation process. The next challenge is recognizing the actual value of IoT, which can be found after applying appropriate ROI calculations.

Another crucial point revealed while considering the machine assets is that executives need to digitalize them really gradually and control each step. Finally, cybersecurity remains a troublesome aspect, and not having 100% efficient defenses worries executives who decide to implement IoT in their businesses. However, executives nowadays demonstrate increasing confidence to acknowledge existing challenges and find solutions for them to benefit from IoT’s significant advantages.

Hi, I'm Harshvardhan Mishra. Tech enthusiast and IT professional with a B.Tech in IT, PG Diploma in IoT from CDAC, and 6 years of industry experience. Founder of HVM Smart Solutions, blending technology for real-world solutions. As a passionate technical author, I simplify complex concepts for diverse audiences. Let's connect and explore the tech world together! If you want to help support me on my journey, consider sharing my articles, or Buy me a Coffee! Thank you for reading my blog! Happy learning! Linkedin

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