How do we create an authentic, technically challenging solution to a real world problem?

From the IB Subject guide:

Internal assessment is an integral part of the course and is compulsory for both SL and HL students. It enables students to demonstrate the application of their skills and knowledge, and to pursue their personal interests, without the time limitations and other constraints that are associated with written examinations. The internal assessment should, as far as possible, be woven into normal classroom teaching and not be a separate activity conducted after a course has been taught.

The internal assessment requirements at SL and at HL are the same. However, these requirements contribute to a different percentage of the overall mark. Students are required to produce a solution that consists of a cover page, the product and the documentation. The focus of the solution is on providing either an original product or additional functionality to an existing product for a client.

The internal assessment component (solution), as well as being practical and productive, forms an important part of the assessment of the computer science course. It is imperative, therefore, that the teacher provides appropriate guidance to students.

Your IA is a practical final exam. You should be able to apply your understanding of solving a complex problem for a client, and then solving any problem for any client.