4 IoT Business Case Strategies, with Examples

To make money with your IoT project, don't start with the technology. Instead, estimate market need and how much you can address.

By Adam Dunkels, Thingsquare CEO – October 14, 2019

Every successful project starts with a business case. As a project owner, your job is to develop the best possible business case for your project.

Not having a clear business case makes your project less efficient, and will cause you to lose valuable opportunities both during and after the project.

In this article, we analyze four ways to build the business case for an IoT product:

1. Making money by adding value to an existing product
2. Saving money by making an internal process more efficient
3. Making money by creating a new business
4. Saving money by making more efficient use of resources

In general, business cases where you plan to save money are better than business cases where the aim is to make money. Why? Because when you aim to save money, that means that the money already exists. If your business case involves making money, the money is simply not there yet, which increases the overall business risk of the project.

In the initial stages, a business case consists of two things:

• An estimate of the market need that is addressed by your solution
• An estimate the amount of that need that your solution realistically can capture

Both of these are difficult to estimate, but there are methods that can be used. Top-down market size estimates are easy to make and are an essential sanity check that the market is big enough. Bottom-up value estimates are more difficult, but are a good way to get a grasp of the value that your solution can bring.

After building the business case, you need to build a proof-of-concept to estimate how much of the business value you can reasonably capture. Then estimate the cost of delivering the solution, to complete the business case. We will get back to this in a follow-up article.

Now let’s look at the business cases one by one.