Taming the Internet of Things and Telematics

Your guide to a predictable return on investment with telematics and IoT initiatives

The Internet of Things (IoT) is a common buzzword that has confused many C-suite executives. New business opportunities available to OEMs, dealers, and customers, by digitally transforming machines with telematics (and effectively connecting them to the IoT) may not be immediately apparent. How does it play into telematics, and is it relevant to your organization? How do you analyze the potential benefits and impact it might have on your business?

With almost real-time access to data, new digitized business models open the way for agile execution and the slicing and dicing of big data to give you an unprecedented level of insight into and control of your business. It can be tempting to mirror the exponential increase in the technology curve with a blind attempt to stay ahead of your competition but don’t do it. Take a more pragmatic approach.

The key to taming the IoT — finding the right balance for your organization and getting digital transformation working for your business — is a careful analysis of your current situation and organizational aspirations, as well as an understanding of the costs and potential for ROI involved. When you understand where you are and where you want to go as a business, you’ll be ready to take action.

Realistically predicting ROI on IoT projects

By its very nature, moving towards a digitized environment can present complex transformational challenges. Begin your journey with small achievable goals prioritized to address your most pressing issues and the transformational changes that can bring the quickest and most significant wins.

Quick paybacks will naturally feed into the transformation process and encourage executive and stakeholder buy-in to pursue the long-term strategy — and significant business benefits typically derive from small, scalable successes. A “rinse and repeat” approach (that can be augmented as needs develop or change) is a solid footing for achieving consistent results and encouraging everyone involved to take the next step.

Predicting a positive ROI on potential IoT initiatives is an essential justification for digitizing machines with telematics in the first place. But there’s more to it when we attempt to forecast ROI on IoT-related projects definitively.

Return on investment measures the gain or loss generated by an investment relative to the amount of money invested. ROI is the ratio between profit and the cost of the investment. Decision-makers (CEO, CFO, and other stakeholders) considering an investment in IoT technology are looking for proof of payback on their investment. A proof of concept that shows an early win and a quick ROI is the best justification of all; however, bear in mind that IoT initiatives are often navigating uncharted territory, which can make accurate predictions of ROI tricky. 

That’s why realistic ROI calculations should never yield a single number but always result in a range of possible or likely outcomes. This is especially true when you consider that each IoT journey is unique and delivering a successful IoT implementation requires both technical expertise and an understanding of the business situation.

You should factor in the cost of tackling IoT projects on your own (without outside help) when calculating ROI, always being realistic about development costs and the costs associated with building up the necessary know-how and expertise.

Being realistic and predicting a range of likely ROI outcomes goes a long way to increasing credibility in the early stages of your transformational journey.

In all of this, a well-constructed Proof of Concept (PoC) with minimal use cases has a pivotal role to play; be careful not to make the mistake of overcomplicating the PoC process.

Developing a straightforward, agile Proof of Concept

As well as digitizing your machines for the right reasons, you mustn’t overcomplicate the process, specifically when it comes to proof of concept and use cases.

While it’s true you need to present decision-makers and stakeholders with a solid PoC to demonstrate the feasibility and get buy-in, there’s danger in shooting for an overcomplicated, all-encompassing PoC stuffed with unnecessary use cases.

To illustrate the point, there are three common ways an overcomplicated PoC can negatively impact rapid deployment:

  • Slowing time to market – if you’re looking to deliver innovation quickly and ahead of your competition, an over-complicated PoC will slow you down.
  • Increasing the time it takes to show value and get buy-in – the more you bulk out a PoC with redundant use cases, the more difficult it becomes to demonstrate quick, uncomplicated wins for the business; “bite-size” chunks of successful implementation that can be easily and quickly deployed at scale.
  • Losing momentum – initially, team members are fired up and keen to deliver on an innovative PoC, but they can soon lose enthusiasm if the process becomes too difficult to deliver. Staff attrition and the natural movement of staff through your business can also cause a lengthy PoC to stall.

Always remember that the purpose of a PoC is to demonstrate that a proposed technology works and that it can add value to the business. It makes sense to develop a straightforward solution, but one that also allows for incremental improvement and the addition of use cases as your priorities evolve and change.

For more, see our short guide Top 3 reasons why a large proof of concept hurts your businessand how to overcome this and learn how to overcome these challenges.

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How Proemion can help

We help OEMs develop innovative solutions aimed at reducing costs, increasing revenue (and producing ROI) while delivering valuable insight into machine operations. This focus also helps our OEM partners provide similar outcomes for their dealers and customers.

We take a logical and uncomplicated four-step approach to help you develop a solution that fits your business.


Remember, don't fall into the trap of being driven by buzzwords. All the data that a telematics solution can collect can be interesting, but concentrate on what is most important for your own business. Start there. Last but not least, make sure the solution you choose fits both your current and future requirements.

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