Point of View

A simple guide to avoiding poor quality IoT service providers

April 12, 2018

In April 2018, we published an HfS Blueprint report on IoT services. As part of the research, we interviewed clients who had experience of working with the 27 service providers we reviewed; we wanted to hear the “customer’s voice”. Here we reveal the four areas of dissatisfaction that clients experienced with their IoT service providers. They are:



  • A service provider’s lack of strategic vision: An inability or unwillingness to explain what IoT and digitalization can achieve for the customer.
  • Failings in engineering and technical know-how: Misunderstanding or misuse of the technologies associated with IoT and failing to build an adequate solution.
  • Poor communications: Not keeping the client informed throughout the project, providing little training throughout, then executing a poor wrap-up and handover at the end.
  • Frustrations with the service provider’s internal processes: These annoy the customer when they waste time and result in delays.

Exhibit 1: The four hot buttons of customer satisfaction


Source: HfS Research, 2018


Strategic vision


The digitalization of processes, products, and services is considered the fourth industrial revolution—Industry 4.0. The Internet of Things is its core technology. So, deciding to launch a project to upgrade your manufacturing processes, for example, or to change your company’s business model to As-a-Service, must be thought through carefully. The implications are profound and long-term. Feedback from clients revealed that about 15% of them had expected their service provider to offer more guidance, vision, ideation, innovation, and long-term thinking on their project.


“The service provider lacked vision. Its people were not focusedon the long-term evolution of the project.”

– a large automotive components firm


Perhaps this disappointment comes from service providers not setting expectations correctly or managing them appropriately. At the outset of a project, it’s vital to establish a common understanding of how the engagement will proceed and what the outcome will be. Both parties should take time over this and get it right. If you’re new to IoT, budget time and money for strategy sessions with the service provider and choose a provider with adequate experience in related projects. Inevitably, there will be service providers that are less good at strategy and vision. Service providers may take the position that the value of the contract doesn’t justify spending time providing advice. Or, it may be that the service provider’s strengths lie in engineering a solution rather than conceptualising and advising.


Engineering and technical know-how


“Their lack of domain expertise affected the analytics part of the development.”

– a solar energy generation company


If a service provider delivers a technical solution that disappoints… this must result from the most fundamental of failings. But it does happen. Clients described a number cases to us, from which four basic reasons emerged:

  1. Lack of domain knowledge: The service provider didn’t understand the client’s business well enough, demonstrating a lack of understanding of process, environmental factors, legal issues, and a whole host of other factors. The best advice we can give is to select a provider that can show credible experience of having done similar projects to yours. With over 10,000 engagements done last year, the 27 providers we reviewed have attained a reasonable level of competence. There’s specialisation occurring; for instance, the client interviews drew praise for Tech Mahindra’s telecom skills, Harman’s expertise on automobiles, HCL’s focus on smart lighting, and KPMG’s experience in smart cities.
  2. Limited long-term thinking: Here the service provider engineered a solution that disappointed through difficulties in deployment (typically domain problems), upgradability, or scalability. Pre-planning was inadequate. The provider and client failed in their visioning.
  3. Over-eagerness and over-commitment: The service provider was carried away with the technology or business potential of the project. It over-promised and under-delivered. This seemed to occur more often in joint-development projects, where the service provider and client were co-developing a product or solution from which they would both be making money. (Whether or not the service provider charged the client for the engagement proved irrelevant.)
  4. Difficulty accessing the right service provider skills: In this case, clients were disappointed in their service provider’s technical capabilities because they proved hard to access. For example, the provider was too siloed in some way, regionally, or perhaps because recent acquisitions had not been merged well. Or maybe the provider didn’t share information and skills well enough internally, so the client felt that the solution provided didn’t turn out to be the best one that could have been achieved.

We should say that a large majority of the clients that we interviewed were pleased with their service provider’s technical knowledge.




“We wanted them to act in an advisory capacity from the beginning. But they gave us little input.”

– a secure identity vendor


Some clients told us that they felt their service provider had failed to communicate adequately in several ways. These failures can be placed into three categories; the service providers did not:

  • fulfil the advisory role that the client was expecting
  • keep the client well enough informed about project progress
  • give adequate training on new processes and tools during the wrap-up and hand-over of the project.


Perhaps it’s because IoT is so far-reaching that companies who know little of technology are attracted to it. We suspect that service providers may be dealing with more than the average number of clients who have limited experience with commissioning engagements. Irrespective of this, because IoT projects are enterprise-changing, clients have a raised expectation that their provider will act as an advisor. A few we interviewed were disappointed.


Naturally, clients like to be kept informed about the progress of their projects. In a few engagements we reviewed, clients felt that their provider had done a poor job of this. This may have been due to an inexperienced account team, or perhaps there was a skills shortage and the provider was encountering delays while hunting for the right talent.


Even if the technical solution that the provider’s engineers have created is the best piece of work ever, if the client doesn’t know how to use it, then the engagement is next to worthless. To avoid this situation, the wrap-up and hand-over needs to be done correctly, but in a few instances, in the client’s eyes, this phase of the project has clearly been a failure.


Internal processes


The fourth factor that leads to dissatisfaction is when the service provider’s internal processes are cumbersome, resulting in problems arising. Issues mentioned in our interviews included: internal processes and problems such as staff shortages; the provider’s slow planning process; supplying too junior a set of staff; internal communication problems; time-zone issues, and the provider’s internal business units not communicating well.


From time to time most companies perform below the standards they aspire to. All that we can do is tell you of the service providers that drew specific praise from their clients for the efficiency and effectiveness with which they conducted engagements.


“They are a very fragmented firm. It feels like they have lots of separate P&Ls. Finding the right skills for our project took time.”

– a medical devices manufacturer


The bottom line: prepare well—it will save time and improve results


Client interviews revealed that strategic guidance, technical expertise, clear and timely communications, and efficient and effective internal processes are the four key requirements for customer satisfaction in IoT services. Here are eight suggestions that you might consider before engaging with a Service Provider (SP) on an IoT project, to help ensure that these requirements are met:

  1. Set and agree expectations at the outset; this is obvious but essential.
  2. Clients: tell your selected SPs that you expect them to fulfil an advisory role throughout your project. Budget time and money for this service.
  3. If you particularly want an SP that has a proven track-record of focusing on strategic consulting as an element of their IoT Value Chain, make sure you choose one.
  4. Look for an SP that has proven domain expertise in your business area.
  5. Consider the long term—ensure that the SP gives you their plans for deployment, upgradability, and scalability, even if you’re starting small.
  6. Consider the efficiency and effectiveness of your SP. Try to avoid firms that are too siloed internally.
  7. Put a systematic review process into the specifications of the project, so that the SP knows that you expect to be informed of progress, regularly.
  8. Remember that, at the end of a project, wrap-up and hand-over can make or break the whole engagement. Demand good documentation and training from your SP.


In summary, and especially if you’re new to IoT: budget time and money for strategy sessions with the service provider and choose a provider with adequate experience in related projects.


Our IoT Blueprint provides assessments of 27 service providers and their capabilities across the IoT services Value Chain—strategic consulting, productization, deployment and operations. It is a good starting point in selecting a partner for your project.

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