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Industrial IoT: Are CIOs Prepared to Tackle It?
Published on 11/07/2016 | Strategy
The most fascinating and, at the same time, perplexing technology issue facing the CIOs today is the use/deployment of Internet of Things. Perhaps the common-most stuff that we talk about is the sensors and that's probably not even the surface of IoT. The challenges aren't as far and few in between. They are in abundance. So, what should be the approach? What shall a CIO be doing to make it work for his/her enterprise?
This said, the industrial IoT is gaining unstoppable traction in the entire spectrum of the industry be it the users or the producers. It is arguably the biggest driver of growth in the next decade and is tipped to help accelerate the reinvention of sectors that account for almost 2/3rd of world production.
The Global Industrial IoT Market Research Report 2015-2019 segments the industrial IoT into four end-user segments including manufacturing, energy and utilities, automotive and healthcare while forecasting almost 27% CAGR to 2019.
According to this market research, a rising number of connected devices are now being used in industries to boost the quantum of generated data. Businesses have realised that they can use these data to optimise costs, deliver better services, and boost revenues. They are also seeing opportunities for changes in business models. For example, aviation engine manufacturers are offering inclusive rental programs on their equipment and servicing contracts. The expectation is that feedback from engine users would help manufacturers enhance engine design and reduce manufacturing and maintenance costs, which may confer significant competitive advantages. Countries have realised that sensor data could be used to avoid catastrophic failures in key infrastructure networks like water, power, and transport. All these factors drive revenues in the market. Further, the report states that the lack of interoperability hampers the adoption of IIoT.
Even the World Economic Forum says that it is the IoT's industrial applications, or the Industrial Internet", which may ultimately dwarf the consumer side in potential business and socioeconomic impacts. The Industrial Internet will transform many industries, including manufacturing, oil and gas, agriculture, mining, transportation and healthcare. Collectively, these account for nearly two-thirds of the world economy. As society evolves towards an integrated digital-human workforce, the Industrial Internet will redefine the new types of new jobs to be created, and will reshape the very nature of work. Given the greater significance, this report focuses exclusively on the Industrial Internet.
Earlier this year, Gigaom Research brought out a very comprehensive research report on the deployment of industrial IoT. The report presents an elaborate framework on the business imperatives, challenges, and benefits of Industrial IoT in enterprises which are looking to truly digitise their businesses.
The report says that with declining sensor costs, maturing analytics and ubiquitous broadband, almost every industry is grappling with how it can use the industrial Internet of Things (IoT) to become more competitive.
Simultaneously, deployment of industrial IoT has created a situation in which the CIO must have an eye toward developing ways to securely connect machinery and sensors while also producing valuable returns for those investments.
With that in mind, industrial IoT has an array of potential benefits, including improved operational efficiency, remote monitoring, preventative maintenance, safety/regulatory compliance and asset tracking.
The CIO is already aware of the need to move toward a more connected enterprise, but a lack of industry-wide knowledge and examples of use cases are inhibiting implementation and even strategy. While each industry will necessarily have its own challenges and opportunities, the examples used in this report come from different sectors to create a framework CIOs can use to guide their own industrial IoT deployment.
Key findings in this report include:
- The current challenges to industrial IoT include the need for industrial standards, security risks, power efficiency of machines, and new hiring needs.
- Operational efficiency remains the number one benefit to IoT, including everything from simple point solutions in waste management to complex networking ecosystems in advanced manufacturing like semiconductor fabrication.
- Remote monitoring and asset tracking are set to grow as tools that the enterprise uses to manage labor costs, improve supply chain efficiency, and gain real-time visibility on inventory.
- Preventative maintenance will be redefined under IoT to include not just equipment failure but also the continual fine-tuning of equipment in order to maximise production efficiency.
- Safety and regulatory benefits of IoT should not be overlooked, as sensor data can be used as a tool for lowering compliance costs or even justifying infrastructure changes that can drive new revenue.
You can access the full report by paying US$299 with a simple registration process. I personally recommend CIOs to do so simply because instead of beginning to figure out yourself, its wiser to go through the suggestions made by experts. Also, you can give intelligent and informed inputs to your deployment partners if you have prior knowledge and information of Industrial IoT and its challenges. To access the report, CLICK HERE.
In the end I would like to again mention the World Economic Forum Report that was published this January which states the following four very clear business opportunities using the Industrial IoT:
- Vastly improved operational efficiency (e.g., improved uptime, asset utilisation) through predictive maintenance and remote management
- The emergence of an outcome economy, fuelled by software-driven services; innovations in hardware; and the increased visibility into products, processes, customers and partners
- New connected ecosystems, coalescing around software platforms that blur traditional industry boundaries
- Collaboration between humans and machines, which will result in unprecedented levels of productivity and more engaging work experiences
This article was originally posted on LinkedIn.