The future of IIoT and unleashing enterprise potential
Manufacturers, utility companies, oil refineries and other equipment-intensive industries have been using connected devices to monitor their operations for more than 20 years — whether it is smart sensors reporting changes in temperature or vehicle tracking systems to support logistics. But while a universal definition of the (Industrial) Internet of Things (IIoT) has yet to be agreed upon, what is clear is that its value has evolved, becoming greater as a result of new supporting technologies and frameworks.
In our experience, IoT projects in 2016 are looking to vary immensely. While we have seen an abundance of customers using enterprise asset management (EAM) applications, embracing sensors in conjunction with software to proactively monitor, manage and maintain their equipment’s health and performance, the majority of IIoT projects are still very much in their infancy, consisting of focus groups and pilots to test how these projects will work alongside existing business processes.
IIoT is an approach that presents an enormous opportunity for manufacturers and other equipment-intensive organisations. McKinsey predicts that the global economic value for the IoT will reach $11 trillion by 2020. Through collecting, analysing and processing sensor-generated data, companies can gain the kind of comprehensive, detailed insights that can drive down costs, or be wrapped up as customer offerings and new services, opening up new avenues of profitability and growth. Essentially it is not so much changes in just technology, but more a shift in the approach to becoming more insightful, proactive and agile in all areas of the business.
But for any of these opportunities to be seized and truly utilised, manufacturers need a combination of real-time (sensor-generated) data combined with cloud storage and powerful analytics. Only then can they achieve fast, intelligent business decisions that will drive the kind of insightful, proactive, agile culture needed to boost profitability and expedite global competitiveness — all of which are critical in today’s environment.
This means that contrary to the hype, the key to seeing the true benefits of IIoT resides not in the sensors, but in the complete visibility and integration of the IIoT-generated data with other core business systems.
ERP is integral to the success of IIoT as it brings together sensor-generated data with EAM, PLM, CRM databases and unstructured data from across the business. Only through this level of integration, interpretation and contextualisation can cost savings be maximised, and value propositions be created and monetised.
For many, this means the current ERP system must be reviewed, and often replaced or upgraded in order to capitalise on this new opportunity. Any system implemented more than five years ago is unlikely to contain the level of flexible architecture, integration capabilities, social collaboration and intuitive user interfaces necessary to complete the advanced tasks in hand.
To make this process even more challenging, it seems that organisations are unclear about best practices and even who should be the person driving action — IIoT often lacks a consistent owner within businesses. Other challenges included a lack of necessary skillsets; unclear benefits; cost; lack of business demand; lack of strategy; and not having the technical infrastructure in place.
IIoT is not something that can be bought off the shelf per se, and any vendor who claims this should be treated with caution. IIoT is an opportunity to embrace a range of new technologies to innovate and drive greater insight, proactivity and agility for manufacturers.
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