The global Internet of Things (IoT) market is experiencing significant growth, with a projected market size of $714 billion in 2024, escalating to $4,062 billion by 2032. More businesses are recognizing how IoT can cut costs, bolster performance, and improve efficiencies.

While this technology is more intelligent and capable than ever before, IoT failure is very real, so today, we’re sharing how you can avoid such a setback in your own implementation.

The Role of IoT in Business

As cloud-based enterprise resource planning (ERP) systems become more advanced, they’re increasingly built with IoT capabilities already embedded.

These IoT solutions leverage the vast amounts of data captured by a business (and its equipment) and provide actionable insights. This means companies have access to real-time updates to help them make split-second decisions and pivot operations.

In addition to ERP, artificial intelligence (AI) and machine learning (ML) are being integrated with IoT products. This powerful combination brings to light predictive insights for scheduling maintenance, optimizing workflows, and improving the customer experience.

For instance, AI algorithms can analyze data from IoT sensors in real-time to predict equipment failure before it occurs, significantly reducing downtime and maintenance costs.

In the realm of customer service, machine learning models can sift through customer interaction data to personalize communication and predict future needs.

Overall, IoT gives businesses the utmost visibility into every facet of their company, and they can use this data to drive business forward – but only if they avoid certain pitfalls.

The 2025 Top 10 ERP Systems Report

What vendors are considering for your ERP implementation? This list is a helpful starting point.

Why do so Many IoT Projects Fail?

1. Undefined Business Case

New technology is exciting, sleek, and sophisticated. As such, many business leaders become starry-eyed over the latest technologies, especially if their competitors are already using them.

However, it’s never wise to embark on an IoT project just to say you did. Instead, you should outline measurable business benefits in a detailed business case before implementing new technology of any kind.

By outlining expected business benefits, you can help ensure the technology you select fulfills your most essential requirements.

Otherwise, it’s easy to get caught up in the idea of Big Data, without really knowing what you’re optimizing it for.

What pain points will Big Data solve? Only after you’ve answered this question will you know what technology to select.

2. Too Much Data

The goal of implementing an IoT system is to capture important data and use it to make smarter decisions for your company. Yet, for the software to work, it must have capacity to operate.

Many companies overload their systems with too much data. .When your systems become filled to near capacity, they may slow down. As a result, the real-time response they promised is less immediate.

Integrating edge computing into IoT can reduce the complexity associated with managing massive data flows. By processing data closer to its source, edge computing minimizes the need for constant, high-volume data transmission to the cloud. This alleviates the system’s burden and enhances real-time responsiveness of IoT devices.

3. Advanced Programming Requirements

A fully-operable IoT system relies on advanced and often abstract programming languages, including visual programming techniques. In addition, any given IoT project incorporates a range of different technologies, each with their own complexities.

If you want all these technologies to “speak” to one another, you need a high level of programming expertise. Often, these requirements go beyond basic programming skills.
While many companies lack the expertise to implement IoT, it is gradually becoming more accessible with the growing availability of developer tools and platforms designed to simplify IoT development.

4. The Need for Around-the-Clock Operability

As data stores keep growing, IoT systems require additional sensors and advanced analytics to keep pace.

The only issue? You can’t exactly take your system offline to make those changes. Doing so would create downtime, which could have devastating consequences.

To avoid this roadblock, many companies create continuous deployment environments for their IoT deployments. This means they can access and update them without disrupting the flow of work.

Modular systems are also preferable, as this allows users to work on one component without affecting any others.

5. Neglecting the People Side of the Project

Even the most advanced IoT system equipped with AI capabilities will require some degree of human interaction and involvement. It’s impossible to predict and program your system to respond to every single outcome.

We recommend training your employees on how these systems work, as well as how to step in when a problem occurs. In addition, we recommend a full organizational change management plan.

If you don’t acknowledge the people side of change, your IoT system will fail to reach its full potential.

More Tips for Avoiding IoT Project Failure

1. Research Your Options

Often, an organization will dive right into an IoT project as team leaders take the “buy now, learn later” approach. Unfortunately, this approach can backfire.

Instead, you should take your time to research the available options and work with an enterprise software consultant to help you make an informed decision.

2. Accept Some Degree of IoT Failure​

It’s unrealistic to expect that your IoT project will go off without a hitch. This technology is new and evolving every day, and few companies have robust experience with it.

Understanding this, many companies adopt an attitude of experimentation. At bigger companies — where innovation is a core value — this effort will take place in what’s called a “skunkworks area.” This is usually a big-budget initiative wherein a separate, smaller project team is allowed the freedom to test IoT technology. The theory is that while some of the efforts may fail, others will succeed.

Even if your business doesn’t have the bandwidth for a designated skunkworks team, it’s still smart to carve out a small space in your IT department for IoT testing and brainstorming. This will require buy-in from your executive team and board members, but it’s a worthwhile investment and can help make your vision for IoT much clearer.

3. Embed Cybersecurity in Your IoT Project

By adopting end-to-end encryption for data, organizations can shield sensitive information from unauthorized access.

Regularly updating software is crucial to patch vulnerabilities and thwart cyber threats. In addition, implementing stringent access control measures, such as multi-factor authentication, ensures that only authorized individuals have access to IoT connected devices and IoT networks.

These strategies underscore the importance of a security-first mindset, mitigating the risk of data breaches and enhancing the overall integrity of IoT ecosystems.

Avoid IoT Failure by Laying the Groundwork Today

Like ERP failure, IoT failure is common. However, it doesn’t have to happen to you. With the right approach, you can create a project plan that helps your company embrace the emerging technologies that are quickly becoming essential across every industry.

Our ERP consultants can help you evaluate all your enterprise software needs, from ERP software to AI to IoT. Contact us below for a free consultation.

About the author

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As Director of Panorama’s Expert Witness Practice, Bill oversees all expert witness engagements. In addition, he concurrently provides oversight on a number of ERP selection and implementation projects for manufacturing, distribution, healthcare, and public sector clients.

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