Concur with your three steps but might I suggest a fourth and an alternative approach.

IoT is about "smart connected" things that create actionable decision making.

If so, then higher level capabilities aren't sensing, monitoring, controlling - but rather - diagnostics, prognostics, forecasting, optimization and autonomics. And increasing the velocity of the OODA loop / SIDR loop.

This means some knowledge of where one is headed with decision making and the algorithms to achieve these higher order capabilities is needed - and - the data structure for said algorithms.

This makes data architecture and standards a key enabler and or hurdle to successful outcomes for any IoT initiative.

Unless that imitative is turning your smart phone into a remote control for your TV, HVAC or home security system.

There's a value to autonomic "Things" in IoT http://goo.gl/vCb2KW