FORES

Index

Introduction

With the increase in usage of IoT for industrial and consumer applications, more and more players are getting into the game. Many of them being technocrats, tend to look at the area they are comfortable with. However, IoT is not a standalone product but an end to end solution necessitating a holistic view of the entire solution. Both SMEs and Startups with their paucity of manpower and material can’t afford highly paid experienced employees or consultants. The FORES Index tool has been developed in order to help in this situation. The FORES Index is a 360 degree tool that allows the users to evaluate their IoT solution and get a fair view of the status. The main idea behind the tool is to point out the areas of improvement rather than a go | no-go type of assessment. This out-of-the-box tool will help to identify the weak areas so that these areas may be addressed as appropriate to ensure that the IoT solution that is being implemented is a success.

IoT is a solution and can’t be classified as Hardware or Software. One of the key ingredient for success is the infrastructure which could be the interconnect network, central cloud resources as well as data analytics capability to make sense out of the data collected. An IoT solution is represented as below in the figure 1.

Figure 1

This essentially means that there are multiple players who make up the IoT solution and success depends on the entire team that creates the solution.

FORES Index – Need for it

IoT is an end to end solution and a “One Size Fits All” approach will not work. Additionally, any IoT solution involves hardware, software (both embedded and application) and infrastructure, covering the network interconnect, cloud for running programs and storage. This essentially calls for;

  1. A thorough understanding of the user needs.
  2. Proper selection of solution elements like HW, SW, Network etc.
  3. The right infrastructure partner who understands the needs and offers the right configuration
  4. Treating the solution in the holistic manner rather than treating it as individual components
  5. Understand and planning revenue based on the solution implemented which also results in tangible benefits to the customer.

Under these circumstances it is important that both the IoT solution implementers as well as the users need to evaluate the effectiveness of the solution and its probable success before venturing into it by spending time and money. Since every IoT solution is fairly large and has multiple components, the need for assessing the probability of success upfront is important. The idea is to ensure that probable problem areas are made visible and they have to be addressed for the solution to succeed. A typical IoT solution has the following components

  • Hardware – Mainly in the form of things
  • Software – Both in the Things as well as central cloud
  • Infrastructure – LAN, WAN, Cloud etc.
  • Business issues like – Revenue, Operation, Support and sustenance of the solution once implemented

FORES Index gives a global framework to evaluate the IoT solution in a holistic manner and offer a realistic view of the solution proposed. The FORES Index has been created in order to help achieve this. FORES Index is an empirical tool and offers a view of the proposed solution from a practical point of view. This tool is basically a questionnaire which when filled either by the implementer or user of the IoT solution, will highlights the areas that need to be addressed for the success of the solution.

Caution: This tool is intended to be of advisory nature and the author is not responsible for the business outcomes which are entirely dependent on the implementer and user of the IoT solution.

What is FORES Index?

FORES is an acronym for

  • Feasibility
  • Operation
  • Revenue                      FORES
  • Execution
  • Sustenance

Essentially FORES Index represents five critical aspects of IoT solution that is being implemented. Each element addresses a critical area in the whole solution and tries to find answers for the questions presented in the tool. The answers are in the form of Yes and No so that the end result is a very clear answer on which areas to focus get the solution succeed. FORES Index has 5 key elements as mentioned above and each one of them impacts on portion of the proposed solution. We shall briefly see each one of them and how they are important.

Feasibility

This element assesses whether the solution is feasible or not practically. This may be surprising to see but the when you look at the three sub elements of the Feasibility you will understand why this essential. The 3 key elements are;

  1. End user – checks whether you have end user who will pay for the solution and there is need for him to use this solution
  2. Solution Providers – Since IoT solution needs multiple partners to make the solution succeed, have you identified partners who will work with you.
  3. Suppliers – Third sub element is the suppliers, since any IoT solution has HW and SW components have identified suppliers who will supply components and material on time. Very often companies fail in this area either due bad quality supplier or supplier not meeting the time line.

Operations

This element evaluates how the operations will be performed in the implemented IoT system and what are the roles and responsibilities of the partners. Above all who will own and operate the solution. There are three sub elements which decide the success of operation and these 3 sub elements are;

  1. Data Only – Does the solution involve analyzing the data collected by the customer (many Govt. Agencies fall in. this category). Users collect all kinds of data but don’t know what to do with that. Data based business entirely depend on the operations performed on the data supplied by the end user.
  2. Partner Driven – In this case while the implementor of the solution may set up the solution but the operating the solution is driven by the Partner who is part of the system. This is a critical element as while the partner runs the solution, the implementor will be responsible for the end performance and can be tricky if it is not handled well
  3. End to End self-operated – in this mode entire solution is implemented and operated by one party. This feasible if the solution is small and easy to manage. Or if the solution is operated by the end user once it is implemented. In any case End to end operation by one owner is good but need very good expertise in managing projects.

Revenue

Revenue is the third of the element in the FORES index. IT stands for the revenue that will generated out of the solution and the company can be profitable. The element assesses the ability of the IoT solution provider/implementor to generate substantial revenue to stay profitable. Revenue element has three sub elements and they are;

  1. Subscription based Revenue – This revenue model generates consistent cash flow and ensure the solution is monetized quickly. However, customers will also expect immediate results from the IoT solution Implemented
  2. Out Right Sale - This sub elements is not a preferred method for the overall solution provider while may be suitable for HW based vendors who have less SW value addition.
  3. Profit Sharing – In this method which may end users tend to prefer when they are not sure of quantified benefits of an IoT solution enter into a Profit sharing mode where the end user shares the savings with the solution implementor. One challenge that the implementor need to be aware of is that initial investments have to be done by them. This option returns good value compared to the others due to the fact that end user sees minimum risk.

Execution

Fourth element in the FORES Index is Execution. It shows how the project or solution will be executed (implemented and run) from the beginning. Many good IoT project floundered here due to bad execution resulting in projects being called off are delayed and resulting in loss of revenue. Execution has three sub elements. These three elements are;

  1. Execution done by the Solution Provider – The Solution provider himself develops, implements and operates the solution. This in practical case may be very difficult. However, is the solution geography is a campus this option is possible.
  2. Joint Execution – In this the solution provider implements the solution with another one or two partners but the challenge is always who will be owner of the overall project. If this is not planned well the project can fail
  3. Third Party – In this mode the solution provider/implementor transitions the responsibility of implementing to third party. While this is easy to do, it depends entirely on who is doing the customer facing role. If the implementor has been working with the customer and if the implementation is given to third party chances are there that problems crop.

Sustenance

Last of the five elements is the Sustenance. This is the step after the solution has been installed and started operating. Biggest challenge is most end users move to use IoT based solution to automate as well as save cost. This means the solutions installed are here to stay. However, with the volatile business environment Startups especially quickly sell out and go or shutdown and go leaving the end user high and dry. Even successful startups many times move away from the products/solution they have developed earlier to work on new project. This again gets the end user into trouble. Key is that the business has to be evaluated for how the companies can sustain and support after the product has started working. There are three key elements to sustenance which are important to be addressed and they are;

  1. Value Engineering – Value engineering a well-known concept, wherein as the product/solution mature overtime end users expect cost to be pruned. The opportunity for cost reduction could be in hardware, in Software, in Operations. This sub elements is a key parameter to evaluate a solution provider for his ability support long term
  2. Revenue Sustenance – The sub-element is typically applicable for the solution provider. With customer asking for a reduced cost there will be pressure on margins as the product ages. IoT Solution providers need to plan up front to ensure the revenue from this solution is consistent and sustainable as the product/solution ages.
  3. Shared Load – Sometime companies which offered the solution move away from the solution due to business exigencies. However, they can’t leave the customer without support. They typically take in a third-party partner or bring the end user into the sustenance process and transition the solution/load over a period time on a share load basis. This model is applicable to many startup created solutions.

How to calculate the FORES Index

FOREX Index tool is a simple tool with asset of 5 questions for each of the sub elements totaling 75 Questions which need “Yes or No” as answer. Once all the questions are answered the tool shows the heat map of each of the 5 elements and points out which are to focus and where the strength lies.

The tool is available in following location: