A Full Guide to IoT Budgeting in Five Simple Steps

Today, the Internet of Things (IoT) has become a revolution, along with AI and ML. Naturally, many companies shift towards this field in the hopes of capturing a slice of the market. However, when IoT demand goes up, so does its cost. It might be difficult to find the sweet spot between spending enough on cutting-edge IoT systems and going bankrupt.

This is why we've put together this in-depth guide on cutting down on the cost of your IoT project.

7 Key Factors Affecting Your IoT Budget

As you already know, many variables can affect the total cost of your IoT project. Some like hardware costs are rather obvious, but there are also some hidden factors that usually go unnoticed. If you’re not careful, they can hurt you the most in the long run.

Here are seven key factors to consider when optimizing your IoT budget.

Hardware

The time and money needed for hardware development is substantial. The money spent on sketches and prototypes is a significant portion of the total hardware budget. Trying out various chip sets, circuit layouts, certification processes, physical form factors, and packaging options is time-consuming and costly. It is best to work with third-party experts to save money on hardware changes.

Such experts can help you simulate data gathering and connection of actual devices. Changing the settings in configuration allows you to try out several different possibilities. You get to see the whole design in action, from its advantages to its limitations. 

Software

From embedded systems and edge computing to software that can collect, manage, store, and analyze device data, there are many different layers needed for an IoT and IIoT project. Every one of these layers can affect the budget you set aside for software development.

Making your own IoT software requires a lot of work and time, which might be expensive. Instead, you may substantially cut costs and shorten the time it takes to bring an IoT product to market by tweaking and personalizing an existing IoT platform. 

Instead of choosing all the features that can be exorbitant, you can consult with a third-party expert for the elements that your specific project will need. This way, you can get everything you want out of an IoT Project, including a customized platform, bespoke applications, and analytics.

Communication

The cost of your IoT project depends on the data volume, communication protocol, and many other software and hardware elements that you need for your specific goals. The total amount spent on communication will depend on all these variables. The good news is that lots of low-cost communication solutions centered on IoT are becoming more common.

Data Management

You can expect to pay more for your IoT project if your devices generate massive volumes of data and transfer them. You may want to stream data constantly, frequently, or on-demand, based on your situation and needs. 

This can change the costs of bandwidth and computation. You may decrease network congestion and delay by decreasing the size and quantity of data packets via approaches like data compression, sorting, consolidation, and batching, which are all useful for optimizing data volume and frequency.

Data Processing

You will also spend more on your IoT project if you want advanced data processing capabilities and analytics features. Different approaches and technologies, like batch processing or AI, might be essential for your project and each takes up a certain part of your resources.

Edge computing and cloud computing are just two examples of technologies that may help you save money while improving the speed and accuracy of your data management and analysis.

Security

Despite the numerous benefits of IoT for businesses, such technology can create security holes in your IoT infrastructure, and if you’re not prepared to make changes, it can dramatically hurt your business. 

The degree of security you need for your IoT project is another aspect that surely impacts the total cost of your process. In terms of security and compliance issues, you can consider using encryption, authentication, authorization, and audits. These are just a few of the methods that may be used to safeguard your data from illegal access, usage, or leakage while keeping expenses to a minimum.

Human Interactions

It can be difficult to pin down the total cost of an IoT deployment because it can come from many different sources. Besides all the factors that we just mentioned, the cost of labor is also another major variable in the total IoT budget that sometimes goes overlooked.

Reducing the amount of resources spent on manual labor is an effective method for saving money. While it's true that we need them for certain tasks such as maintenance and setups, we can minimize them with expert solutions.

Five Steps to IoT Budgeting

As you can see, you need to maintain a delicate balance in IoT projects. But, they can sometimes create many problems in budgeting, as they need careful planning and analysis. Here is a five-step solution to help you keep the costs as low as possible.

Define the Scope

The first step in every IoT project should be to define its goals, motivations, and approach. Create a plan of action and identify the metrics you'll use to evaluate your success. Also, be sure to detail your IoT solution's capabilities, features, and prerequisites. Your project's resources and skill requirements, as well as its potential costs and benefits, may be better estimated with this information.

Find the Right Platform

After settling on a mission and scope, think about the technology platform you'll use. You should choose a platform and structure that can grow with your business and is within your price range. Consider the efficiency of the software layers that will link and control your IoT infrastructure's data, apps, and devices before committing to a certain platform. Examine the platform to see what sort of processes you need to set up the many parts, procedures, standards, and safety precautions. Also, think about how your platform and architecture may work with existing solutions and services.

Calculate the Costs

Estimate the expenses and advantages of your IoT project after you've settled on a platform. You need to consider the initial capital, operating expenses, and maintenance or repair costs. Think about the payback time and the break-even point when estimating the total cost of your IoT project. Costs and benefits may be impacted by a number of factors, therefore it's important to prepare for these issues and find ways to deal with them.

Team up with an Expert Team for a Customized Solution

Developing a custom platform means starting from scratch with every component, module, and design. This method offers a great deal of flexibility and uniqueness, while also helping you save money by picking the elements that you'll only need in the short- and long-term.

But in order to achieve such a high level of customization and distinctiveness, you need a reliable third-party expert with a proven track record. With the right IoT development company as your partner, you can determine the features you need and understand their impact on user experience.

Monitor & Improve Performance

Track and improve results after launching your IoT project. Measure key performance indicators and return on investment with data collected and analyzed from your IoT devices, platform, and apps. Boost your competitive edge and user experience by analyzing and acting on input from users, customers, and the market as a whole. 

Update your IoT system with the latest updates, and fix any bugs you find. Don't forget that keeping control of your IoT project isn't a one-time thing; rather, it's an iterative process that will allow you to make adjustments as you go.

You should have your platform go through parallel testing. If bugs are found in your system after it has already been built, you may have to pay more to have the code fixed.

FAQ

Is IoT inexpensive?

As with many other areas of technology, IoT device prices have dropped as the underlying technology has improved, become more efficient, and become cheaper to manufacturers. This has increased the importance of the IoT sector and increased manufacturers' profits from making connected gadgets.

What is the biggest problem that dramatically increases the cost of IoT projects?

The security and privacy of user data is one of the main concerns with the Internet of Things. IoT devices produce and collect massive volumes of data, some of which may be private and sensitive. Hackers, rivals, and other third parties may be able to access, steal, and abuse this information.

How much does it cost to run an IoT project?

There’s no set figure for running an IoT project because there are many factors involved and it depends on the scope and the complexity of your project. Of course, if you’re looking for an accurate quote, you can contact our team at LANARS.

How important is technical expertise in optimizing my IoT budget?

As you can see, choosing the right security protocol, development platform, hardware, and software can dramatically affect the total IoT cost, all of which require expertise in this field. With the right expert partner, you can make all of these decisions to minimize your expenses.