When defining an IoT-system, there are five main topics to consider. These cover the flow from sensing to actuating and everything in between. Depending on your setup, some of these may not be needed but you should at least investigate their applicability.
Step one: get your sensor connected to the internet. depending on the application this can be quite a challenge and it may require an intermediate gateway between the IoT device and the internet.
There are multiple constraints to consider when designing the connection, two of the most important being (battery) power and communication bandwidth.
In an ideal situation you want to collect all data you can get from your sensors. However, in many cases the connection bandwidth does not allow sending all of the data to the cloud. In that case temporary storage in the IoT device is a good solution.
Using local analysis, the data transfer to the cloud may be limited to specific events. However, this way you loose the option of using the data for further analysis.
Sensor data becomes all the more valuable if it is combined with data from other sources. These sources can be other sensors, historical data or external datasets.
Deciding which other datasets are needed is important, but you should be ready to reconsider this at a regular basis. The datasets available are always expanding and the cost of gathering sensor data constantly drops. That is why the regular reassessment makes sense.
The computation is the processing of the data. This is the most important part as value is created in this step. Where this computation is executed depends on the application.
It can be on the device or gateway (called fog computing) or in the cloud. Many parameters influence this: connectivity, computational power needed, dependance on other datasets, time criticality, etc.
As a final step, the loop may be closed back to a device to control actuators from the computed result. Depending on the requirements, again, the actions may be initiated locally on the device, on the gateway or from the cloud.
Some actions are based on simple input, but critical; these are initiated locally. Others are more complex and thus they are controlled from the cloud.
The above is a very high-level overview of an IoT system analysis, but at least it gives some insight in the value of the Five C’s. The framework can guide you in various ways, from large system analysis to a guide for creating a morphological box.