What is the industrial internet of things, you ask? Well, according to a recent Global Industrial IoT (internet of things) Market Research report, the industrial internet of things is commonly made up of four end-user segments: Manufacturing, energy and utilities, automotive, and transportation. Toss healthcare in there as well (definitely a member of the IIoT, if not one of the main four), stir with some ingenuity and technological innovation, and the result is a rosy looking market for growth—with a 26.56 percent CAGR (compound annual growth rate) predicted between now to 2019—resulting in a valuation of $319.62 billion by 2020. Industrial IoT is still fairly new, but all heavy industry leaders need to start waking up the huge impact that IoT is having—and will continue to have—upon the industrial sector, if they hope to gain and retain a competitive advantage.
How IoT Will Change Industrial Businesses
When we think of the IoT, we commonly think of home safety systems, smartwatches that allow us to turn the lights on and off or adjust the temperature, and wearables that monitor our sleep, workouts, and heart rate. But IIoT also has the potential to change the way businesses operate every single day. Sensors, connected robotics, remote diagnostics/maintenance, and other embedded technologies are playing a massive role in how industrial plants function, and factory floors stay productive.
Companies are leveraging custom-made, connected devices to:
- Reduce downtime.
- Increase productivity rates.
- Develop new product and service offerings.
- Erase departmental and industrial boundaries.
From farmers to freight, IIoT and its connected logistics devices are industrializing land and crop management, optimizing trucking routes for reliable transportation, and helping manufacturing plants maintain, update, and improve automation.
In addition to driving productivity and business growth, IIoT also has the potential to fundamentally alter the work experience.
According to a World Economic Forum report, “…this latest wave of technological change will bring unprecedented opportunities, along with new risks, to business and society. It will combine the global reach of the Internet with a new ability to directly control the physical world, including the machines, factories and infrastructure that define the modern landscape. However, like the Internet was in the late 1990s, the Industrial Internet is currently in its early stages. Many important questions remain, including how it will impact existing industries, value chains, business models and workforces, and what actions business and government leaders need to take now to ensure long-term success.”
And these are the questions CIOs have to start asking themselves, and exploring within their industries, if they hope to be leaders in this new “industrial revolution.”
What Does Industrial IoT Mean for CIOs?
As technology bleeds into every aspect of business, CIOs find themselves in new, more strategic business positions. IIoT will not successfully transform a business unless the CIO and the entire IT team is prepared to support the use of the technology.
CIOs are often responsible for overseeing strategy development, implementation, maintenance, security, and data management, but the industrial internet of things brings with it many new hurdles:
- Security and data privacy issues, and a greater risk of espionage and data breaches driven by increased connectivity and data sharing.
- The need for brand new security strategies and frameworks, from device-level authentication and application security, to system-wide assurance, resiliency and incidence response models.
- How to deal with interoperability issues among existing systems, as well as the resultant rise in complexity and cost as factories and manufacturing plants are retrofitted with the latest technological equipment.
- How to effectively break down operational silos to ensure seamless data sharing between machines and other physical systems from different
- How to plan for (or avoid, preferably) unstable ROI when investing in brand new—NOT tried and tested—somewhat immature technology.
- Ensuring that compliance and regulatory issues are adhered to, especially when it comes to “data governance rules across geographic boundaries.”
These obstacles can stymie innovation, and make people fearful of change. But a well-developed strategy based on business-specific problems and goals can turn challenges into opportunities.
Creating a Strong Strategy around Industrial IoT
CIOs who are committed to developing a meaningful, actionable strategy for IIoT will serve their companies well. To push an organization toward a business transformation, executives need clear problem-solution initiatives that both address current concerns and push a company closer to larger strategic goals.
There are three main actionable components that can help businesses meet their goals: The tools and software, individuals who understand data analytics, and individuals who understand the industry and processes. Unless those three components are working together, a business may run into roadblocks.
For example, one software engineering firm that offers custom solutions to maritime organizations struggled to drive IIoT user adoption until the company put the right talent and tools together. With maritime expertise, sensors, and analytics professionals looking for meaningful patterns in the data, the company successfully identified a Navy destroyer’s generator failure before the ship deployed—a clear illustration of the power of the IIoT, and a fantastic case study for them to help sell their services.
Finding the Right Starting Place
A successful strategy does not only include small problem/solution equations. Where you choose to begin your IIoT journey can affect long-term goals. As an industrial company, you may want to start small, with your supply chain, on the manufacturing floor, or in the product distribution and sales area. Each area of the business requires a different IoT approach, and may have a different impact on business growth.
The industrial internet of things is already driving change across businesses of all sizes and in numerous sectors. Moving too slowly to integrate IIoT solutions will leave you lagging behind your competitors, and struggling to catch up, if that’s even possible. The bottom line is that industrial IoT is here to stay. CIOs have but one choice, really: Take the wheel, and be the one who drives one of the biggest changes to hit industrial business since the birth of the automobile.
Additional Resources on this Topic:
This post was brought to you by IBM Global Technology Services. For more content like this, visit Point B and Beyond
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.