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Why outsource R&D in IoT application development

Outsourcing IoT applications is a growing trend as it mitigates risk and keeps costs under control. Many businesses choose to outsource their development aspect, perhaps because they do not have the internal skills, or simply because they do not want to build up an internal team with IoT talent. Therefore, they choose to work with nearshore software outsourcing companies that can handle creating their IoT product.

What some organizations overlook is outsourcing the R&D aspect of IoT application creation. Many companies have an idea and want to rush to create it, lest a competitor gets to market first. Outsourcing R&D can help ensure the idea is fit for market without hiring employees with specialized R&D skills.

The importance of R&D in IoT application development

R&D teams handle both technical and business elements of a product. Their role is to evaluate both the feasibility of the product, as well as the actual technology. Additionally, R&D teams can look at future business opportunities. The end result should be research, prototypes and well-informed advice on the IoT product.

The R&D team can experiment with the idea before it’s actually a product, and it can help shape the concept into a functional asset that solves a user problem. Some products can take years to go through R&D — think self-driving cars.

The next step: POC, MVP and a prototype

IoT systems have different needs in the initial phase. R&D starts with substantial research on the potential product and its market fit. For many companies, the next phase is a proof of concept (POC), a minimum viable product (MVP) or a prototype. While some companies lump these three together, understanding each one specifically is important.

A POC is an exercise conducted to understand the product thoroughly. This happens before any planning of product creation. It answers questions such as: Does this potential product have a market? Will customers actually use this? It’s interesting that 60% of IoT initiatives stall at the POC stage, which could be a reason why so many IoT projects fail.

A prototype, which sometimes comes next, has the same primary goal of helping companies realize whether or not the potential product will work. By building a prototype, an R&D team can test the functionality, design and usability of the product. Obviously, prototyping for IoT applications is quite complicated as they are enhanced by smart sensors and embedded systems. Teams need access to circuit boards, microcontrollers and, of course, sensors. A prototype is not ready for market; the hardware used in this phase may differ at a later stage.

An MVP is a product with enough of the final features to be viable for the market. The point of an MVP is to get it to market to find early adopters before investing in all the bells and whistles of the final product. For IoT, this is crucial. A survey on the IoT found that 60% of respondents stressed that IoT initiatives often look good on paper, but prove far more difficult than anyone expected.

Deciding between one or all of these three can be difficult, and doing one of them requires specialists and plenty of IoT equipment. While large companies can invest in a POC, prototype and MVP, smaller companies often cannot. And choosing which R&D route to take requires specialists who understand the functionality and idea of the product and specific equipment which may be better provided by an outsourcing partner.

Considerations when outsourcing R&D for IoT

IoT technology is far more complicated than most, which is why these specialized developers are in high demand. Regardless, R&D cannot function in a vacuum, so companies that outsource this step must fully integrate the third-party team. The R&D process should be robust because it should mitigate risk and assess whether or not the product will work. IoT development is costly, so if the product doesn’t fit the user’s needs, it’s a massive hit for the company.

If choosing to outsource, be sure to select a company that has experience in the R&D process for IoT. Since it differs significantly from other software development projects, these specialists, including engineers and scientists, are highly sought after for internal teams.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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