Has IIoT Just Become a ”Four-Letter Word”?

Has IIoT Just Become a ”Four-Letter Word”?

According to the 2018 World Manufacturing Forum Report, 59% of global executives surveyed believe IoT is a top supply chain innovation. However, adoption rates hover at roughly 20% – despite IoT’s notoriety following Carnegie-Mellon University’s demonstration of a network-connected Coke machine back in 1982. Here, Pegasystems’ Steven Silver, Leader for Manufacturing, Automotive & High-Tech, and Cognizant’s Prasad Satyavolu, CDO & Global Head of Innovation, discuss IIoT’s value problem.  

Why have companies failed to realize meaningful business value despite the advancements and lessons learned over the intervening years?

Our conclusion, informed by discussions with clients across multiple industrial sectors and our experiences living through numerous hype cycles, is that the IoT value “problem” is not substantially a technology issue or its provenance. To us, it’s a combination of factors, ranging from a lack of sustained investment in a full-scale transformation program, to a failure to pay enough attention to real business process redesign.

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The reality is that the IoT should ultimately be viewed as an ever-present ingredient in an organization’s business architecture that makes reimagined operational outcomes possible. In other words, it’s a part of the story – not the entire narrative. Seems simple enough, but it’s anything but.

Defining Questions
For most manufacturers, digital business change is an unfair fight. While an organization’s business leadership is often focused on the “arms race” to digitize and optimize the business with the latest and greatest “shiny object” innovations, most IT investments and human capital are trapped with the task of keeping existing operations running.

It begs the following questions:

  • How might the consideration of aspirational IoT outcomes avoid being dismissed because of their potential to complicate the job of meeting today’s operational obligations due to a perceived lack of capacity to do both?
  • How can we get more horsepower from earlier IoT investments?
  • How can we create a change program with a clearly defined roadmap and a high propensity to deliver results?
  • How will harnessing IoT within operations change the business process architecture and overall outcomes?

The IoT Status Quo Cannot Remain
Your operations are already instrumented with sensors everywhere. This creates expectations by customers, partners and associates that your organization is already acting on its IoT data for their benefit. Moreover, as new business scenarios emerge, your organizational design principles must focus on a creative revamp and a full deployment of all resources at your organization’s disposal.

In fact, as customer demands increase in expectation and complexity – and since there is no cavalry of new headcount coming to the rescue – these scenarios will mandate that current associates be supported by much greater degrees of intelligent automation and productivity assistance.

It’s the combination of existing IoT data and intelligent automation that will enable you to deliver on the promises you’ve made to employees and customers of seamless, effortless and connected processes, products and experiences. Among many examples, this might include:

  • Eliminating or reducing equipment downtime once it becomes evident.
  • Instantly connecting others inside your enterprise and value ecosystem to tackle issues or act on new business, efficiency or quality opportunities.
  • Instantly protecting the health and safety of your operators, drivers, passengers and others based on the warning signals from your equipment or products.

This goes beyond the promise of action and outcomes to instantly executing them at scale. And unlike in the past, it’s not only possible to make this happen; it’s required that you deliver these outcomes in weeks and months, not years from now.

No Time to Look the Other Way
Too much already on your to-do list? Unfortunately, doing nothing, abandoning or de-emphasizing IoT as another overhyped technology is not an option either. In fact, according to a recent MIT Sloan Management Review report, your peers and competitors believe IoT has clear business value:

  • 68% believe IoT will be necessary to their corporate success in the future.
  • 19% can measure IoT’s value without effective analytical skills.

The issues that often prevent adoption boil down to IoT being treated as an end unto itself.  However, this makes little sense when, according to the World Manufacturing Forum report cited above, IoT adoption hurdles preclude any bona fide assessment of its true business impact and scaling potential. Top barriers include:

  • A lack of technological understanding.
  • The absence of a clear business case.
  • Cybersecurity concerns.

These obstacles don’t just manifest themselves in survey results or a lack of progress. They show up in the kind of frustration that slows, if not stops, innovation – and corrodes cultures. The reason is a lack of confidence: No one truly believes that creating new value is possible in their own enterprise.

So how can a connected industrial enterprise scale and finally reap benefits from IoT and IIoT?  The answer lies at the intersection of your existing IoT investments and the orchestration of your most critical business processes.

Related Publication

Digital Industrial Transformation with IoT

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