The rise of the internet of things is clear. According to a study by Red Hat, 21% of organizations have already incorporated IoT projects into their business, 28% plan to do so in the next year and 70% over the next five years.
Given that many companies want to include IoT into their existing business or offerings, the search for in-house talent is becoming grim. Businesses, therefore, opt to outsource part of all of their IoT needs in order to attain the necessary development skills.
Looking at the IoT development stack, various parts of the process can be outsourced. Some companies choose to outsource certain elements of an IoT project because they have some developers in-house but lack specific skills related to the development. This route implies companies can scale up and down quickly.
Before deciding whether or not to employ an outsourcing provider, companies have to look at the needs of an IoT product.
IoT development requirements
The product begins with R&D. Companies must attain the technical skills to build the entire product, employing qualified developers and testers. Creating an IoT product requires more than just a developer. Teams need skills such as microprocessor programming, chip design experts and so forth.
Someone needs to manage the database of information, as well as analytics. What’s more of an issue to businesses is not just someone that can manage the data, but who can also manage security concerns. Data breaches are far too common, so the need for a security specialist is crucial. Someone on the team needs to handle application development platforms and also system integrations.
As there are a couple requirements to develop an IoT-based system, companies often choose to outsource the entire product. Another popular option is to hire an extended team to fill in the technical skills missing internally.
Why outsource IoT
As with any product, there is risk when developing an IoT product. A company could scale up internally, build the product and something could go wrong. Maybe certain functionality does not work, or there’s no real market need. Outsourcing is a way to mitigate risk.
Keeping the cost advantage in mind, outsourcing allows companies to hire many more engineers and specialists for a fraction of the cost. But, more importantly in the competitive world of IoT, companies can get to market faster by outsourcing. If, per Red Hat, so many businesses want to add IoT functionality, there will be more competition in this market, so timeliness is key. Outsourcing also offers the advantage of more flexibility and more creativity with a skilled team working on the project.
Which parts of an IoT product to outsource
Many organizations choose to outsource IoT from beginning to end. They either do not have or do not want to find the talent to complete the project. Others decide to outsource bits and pieces and use an internal team occasionally. Here’s a look at what companies can outsource during IoT application development:
Research and development
Outsourcing R&D is an often overlooked benefit. However, having third-party research and validating an idea is an excellent way to ensure the product or service is fit for market placement. Internally, companies can become tied to their own ideas and find ways to approve them. Using an outsider, however, can eliminate bias while capitalizing on the expertise that may not live in-house. Companies may also choose to outsource R&D so that team members can focus on core business functions — they simply may not have the time to devote to this endeavor.
There are IoT developers who can help create the actual product. These developers often have a combination of skills including AI, mobile, user experience/user interface (UX/UI), IT networking, hardware interfacing and more. Since IoT developers are hard to find (and expensive to hire full time), businesses outsource to organizations that have this talent on staff.
IoT applications are all about the user experience. UX drives sales, increases conversions, strengthens the business-consumer relationship and keeps the focus on your customer base. If the product is difficult to use, then it will be even harder to sell or maintain. IoT UX and UI is relatively new, but increasing in importance as consumers adopt IoT technology for everyday use.
An in-house cloud service is impractical. Since there are many renowned services available, companies often offload this part of the IoT project. The costs associated with maintaining and upgrading a cloud service are far too high to handle in-house, especially when taking security concerns into consideration.
Security and data
According to Gemalto’s “The State of IoT Security” report, only 33% of respondents believed they had complete control over the data that their IoT products collect. As security concerns tighten and data breach consequences become more severe, businesses can opt to outsource security entirely rather than finding someone in-house to handle it.
Final recommendations for IoT outsourcing
Whether outsourcing all or just a part of an IoT project, it’s important to remember that not all outsourcing firms are created equal. While outsourcing cuts costs, remember to go with a provider that adds value — and not just one that offers the lowest price. Most importantly, you should find someone with experience and numerous success stories capable of developing and maintaining an IoT application.
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