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A Guide to the Industrial Internet of Things

The Industrial Internet of Things (IIoT) is poised to rapidly disrupt the way we do business – across systems, and likely, permanently. PricewaterhouseCoopers (PwC) dubs the Industrial IoT a “once-in-a-lifetime business disruption” in their 2016 report on the industrial internet of things, estimating business will spend $6 trillion on IoT solutions between 2015 and 2020. In 2020, PwC estimates IoT solution installment will garner $1.6 trillion across businesses, governments and consumers. The bulk of this investment? Software and application development.

What is IIoT?

At its core, Industrial IoT is connection. Products and appliances connect to the internet and participate in a system of shared communication. In practice, this data makes for smarter machines – machines that can “monitor, collect, exchange, analyze and instantly act on information,” RTI highlights – with no human interaction.

How is it Different from IoT?

While mention of the internet of things may first conjure up images of home automation devices, like Amazon’s Alexa or Google Home, IIoT dwarfs the consumer IoT both in scale and in impact. PwC predicts industrial IoT will launch 100 billion devices in the next five years, compared to a few billion devices in the consumer sector, across wearables, home automation and cars. Industrial IoT’s potential impact is equally staggering. Where consumer IoT offers convenience, like wearable fitness tracking or smart home thermometers, industrial IoT offers a revolution in critical industries like aerospace, defense, healthcare and energy. Industrial IoT connects systems whose failure can trigger emergencies. Ultimately, Industrial IoT may also provide the infrastructure that supports IoT applications.

What are the Possibilities?

The industrial IoT creates opportunities to expand revenue streams with new value-adds, like remote monitoring, insurance and maintenance, all which can be done in real time – and with more urgency as a result.

Smarter machines could also cut internal operations costs and bolster productivity. The New York Times highlights how a smart machine could request maintenance – prior to its breakdown. And this early heads up translates into less time out of commission and more productivity. National industrial giant General Electric (G.E.) champions Industrial IoT for its practical and economic technologies, G.E.’s senior vice president for global research told The New York Times.

Finally, replacing the potential for human error with a data-driven, intelligent machine could equip machines to move both safely and effectively into areas humans cannot, which could have transformative implications in fields like aerospace, hospitals, mining and even automotive. Intelligent machines could anticipate accidents and take precise action.

What are the Challenges?

As a disrupter, industrial IoT stands to do just that at an operational level, spurring challenges in customer relationships, legacy processes, supply chain and risks.

Now connected directly to both their machines and the businesses that manufacture them, consumers will require customer from manufacturers – new territory where historically a middle man has played buffer between customer and creator. Tactically, this requires manufacturers to foster direct customer relationships, and transform into a service-oriented institution. For organizations historically centered around products, reframing to position the customer as a key focus is significant, and organization can be grueling.

Industrial IoT-ready appliances upend traditional design and development, requiring new parts, cybersecurity and a new supply chain to provide these components. Locking in vendors may be difficult given the rapid change, and policies around access management will require overhaul.

Potential challenges posed by Industrial IoT aren’t limited to the internal workings of an organization, either. Global management consulting and professional services firm Accenture poses other areas for consideration: compliance, documentation, and human health and safety.

Why Now?

PwC champions Industrial IoT adoption as imperative and urgent, predicting that IIoT transformation may vary by industry, but is nonetheless imminent – likely before most companies believe.

A key driver of rapid IIoT adoption is diminishing IT costs across critical areas: storage, computer power and network capacity.

Prolific start-ups and lavish venture capital investment accelerate improvements and breakthroughs in IoT and Industrial IoT.

As technology disruption ripples across industries, industrial companies are forced to transform into technology companies – or at least approach their agenda like one.

Unprecedented advances in big data propel Industrial IoT advances and can revolutionize the way goods and services are obtained and measured. For example, PwC highlights the new ability for IIoT-connected sensors to monitor airline engines when an aircraft engine manufacturer embeds them into the engine’s turbines. The resulting data could move airlines from purchasing engines directly, and enable them to lease the same engines by the hour – or even the minutes – as usage is measured with precision.

How Can Organizations Capture IIoT Opportunity?

In a landscape rife with IIoT opportunities, successful organizations will position themselves by:

  • Assessing customer engagement models
  • Actively implementing IIoT connectivity across both machines and networks – with an intentional, strategic design
  • Reviewing necessary operational changes – and evaluating the related challenges
  • Convert company culture to a customer-centric perspective
  • Incessantly examine operations and technology to constantly drive new IIoT improvements and benefits
  • Analyze the larger landscape for potential partners
  • Understand the full financial picture – across transitional costs, margins, talent acquisition and efficiency gains
  • Prepare sales, marketing, and customer services departments for a new direction
  • Establish appropriate legal protections for your data
  • Keep tabs on employees and don’t lose touch as you pursue the smarter machine. Sourcing skilled employees who can drive business into new territory is paramount for success.


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