The Internet of Things (IoT) brings a heightened state of awareness, the Eternal Present, with continuous information inflows from across the value chain of enterprises. The patterns in the data are displayed on dashboards, making business leaders acutely conscious of pressing issues that can’t wait for a resolution. No longer is the enterprise blinded by unnoticed problems buried in their systems. IoT data reduces the risk of enterprises being caught off-guard when latent chinks snowball into a crisis unexpectedly. Instead, they can prepare for the Future based on the data from their operations and more.
Beyond the hype cycle
The Internet of Things has had an extended hype cycle delayed by shortcomings of business strategy and technology for deployments. The top three barriers to implementation are inadequate software applications, lack of business strategy, and limits of technology or retrofitting in all regions. However, the interest in IoT is unabated: 86% or respondents surveyed by the 2021 State of the State of Adoption Report conducted by esye consider IoT a priority and 89% plan to increase the IoT budget.
The business strategy that is most likely to benefit from IoT is system-wide innovation based on data generated by the IoT and its analysis. The most popular use cases are remote asset monitoring (34%) and process automation (33%) which apply across facilities. However, enterprises are unfamiliar with methods to map and execute system-wide innovation that encompasses the value chain.
Those who eventually succeed in getting deployment right, realize significant benefits. Productivity, for example, increases by 160% and inventory is reduced by 90%.
The automobile industry, for example, has been transformed by Tesla’s approach to manufacturing with “a single integrated computer system to control all of their functions, from battery charging to motor control to tuning the radio.” The system-wide innovation at Tesla extends from design, represented in a digital twin for each car, to tracking manufacturing operations with sensors and the monitoring of field performance of vehicles to calibrate factory processes. As a result, most automobile companies have had to catch up with Tesla.
Learning to master IoT
IoT-enabled manufacturing operations are a class by themselves with a steep learning curve for the system-wide transformation of most legacy industries. Currently, 29% of respondents are in the learning stage and another 25% are in trials with pilots. The learning includes cloud-native application software and operating platforms, data capture with sensors including cameras, aggregation of data using data models or methods for classification of data and its analysis with artificial intelligence, and automation to respond to information. As per Farnell, 50% of the companies that consider themselves leaders in IoT development either use AI with their IoT or plan to do it in their next project.
Risks and benefits of IoT Adoption
The adoption rate has picked up as a result of the urgency of Covid and the maturing of technologies. Projects in the use stage remained steady at 25% for 2020 and 2021. Those in the purchase stage rose from 21% in 2020 to 22% in 2021. The US leads with 27% in the use phase compared to countries like Spain (22%) and Australia (18%). Moreover, 78% of companies in the US plan to make higher use of IoT compared to only 53% in Germany and 51% in Japan.
The rewards of success with IoT are high, as are the risks of business transformation complexity. An increase in revenue and profits from improving products and services is a significant incentive for IoT adoption. One in three organizations finds IoT beneficial for enhancing products and services for customers. Per a Microsoft report, those who do increase their revenue (50%) compared to those who don’t (39%). The same companies also face higher levels of business transformation complexity (30%) compared to those who don’t (27%).
This infographic shows how 5G-driven IoT is driving bigger benefits for everyone: Infographic – How IoT is Driving Bigger Benefits
Lucrative use cases of IoT
The gains reflect lucrative use cases of IoT for legacy industries. They can gain revenue and realize operational efficiencies. The prospect of earning income from higher-margin services is a significant attraction to adopting IoT. Equipment manufacturers, for example, can deliver services such as monitoring the performance of machines and using the data for predictive maintenance, replacement of parts before a breakdown happens, and risk-based warranties. They can, moreover, improve their odds by using the data to improve design and manufacturing practices to lower the risks of failure.
In the power and utility sector, the monitoring and maintenance of the transmission labyrinth is a huge operational cost. Manual inspections are a time sink, and chances of human error are high. Inspections with drones with optical sensors can scan the grid faster. They can also use the data from the images and analytics to find the sources of vulnerability.
The gains are much higher with complementary technologies such as digital twins for visualization and decision-making. Data from IoT is fed into digital twins for simulation and mapping strategies for solutions. For example, the maintenance staff for extensive infrastructure facilities is equipped with imagery to pinpoint problems and collaborate with remote experts to resolve issues faster.
IoT adoption is at an inflection point. The benefits of adoption are compelling and demonstrable. While the risks are still high, enterprises will likely attempt to mitigate them with external expertise. They will also likely benefit from the improvement in the technology that makes implementation less risky.