Establishing The Underlying Strategy To The Internet of Things

Start planning your strategies now to be prepared or risk being left far behind.

Many manufacturers remain skeptical or are struggling to understand how to engage or where to start an Internet of Things (IoT) strategy despite improved Big Data functionality across the industry and the lower cost and smaller size of sensors. According to research by Accenture , the vast majority of C-suite executives (84 percent) believe that their organizations have the capability to create new, service-based income streams using the IoT. However, in reality, only 7 percent have actually developed a comprehensive strategy and committed investments to IoT.

Accenture also reports that a dramatic change in perception is underway.  In 2014, less than one-third (31 percent) of C-suite executives emphasized the revenue opportunities presented by digital investments, whereas this year, 61 percent cited digital initiatives as a tool for growth.

Gartner Analyst Simon Jacobson, author of the whitepaper, “Four Best Practices to Manage the Strategic Vision for the Internet of Things in Manufacturing,” says, “the strategic vision for the Internet of Things is coming together quickly for manufacturing. It is a top-of-mind subject, and it's a significant trend that cannot be ignored.” 

He goes on to point out, however, that rapid changes also can create uncertainty. “The technology evolution of the Internet of Things (IoT) is accelerating faster than manufacturing stakeholders can assimilate and link it to step changes in performance-based maturity, creating uncertainty in value and differentiation to the business buying into the IoT,” Jacobson writes. 

Although manufacturers already have many components of IoT in place, these existing applications are often siloed or part of an intranet, rather than an Internet. For example, manufacturers have been using EAM systems to collect and monitor the status of their internal equipment for years. Equipment manufacturers and dealers have also been using telemetry to track the location and performance of heavy equipment for years, even driving “power by the hour” rental agreements. And, machine-to-machine connectivity is commonly used in technology like vending machines and parking meters, where the machines send a signal when service is required.

Despite these familiar use cases, a new level of strategy is required to take IoT to the next level. In order to accomplish this, operations and IT systems must re-align for an integrated IoT strategy.

An IoT system is not something a manufacturer can buy and turn on, nor is it one piece of hardware or software to be purchased and implemented over a few days. It is more aptly described as a mindset or strategy, which leverages several technologies into one cohesive plan. Big Data is one critical component of the plan, but managing this data is one of the top challenges.

TechCrunch’s Ron Miller wrote in the article, “If You Think Big Data is Big Now, Just Wait,” about the overwhelming amount of data IoT has the potential to create. “The promise of Big Data has ushered in an era of data intelligence. From machine data to human thought streams, we are now collecting more data each day, so much that 90 percent of the data in the world today has been created in the last two years alone. In fact, every day, we create 2.5 quintillion bytes of data — by some estimates that’s one new Google every four days, and the rate is only increasing.”

This amount of data can be paralyzing. MIT Technology Review describes the challenge GE faced when attempting to manage the data produced by its industrial equipment. One jet engine in a single flight generates half a terabyte of data. With a typical data warehousing approach, it would take 30 days to ingest, structure, integrate and process that data – from one single jet engine in one flight – into meaningful insights. With new Big Data innovation, GE says it has reduced that processing time down to 20 minutes. 

With new data processing tools, new solutions for integrating and taking action on the data must be devised as well.

Simon Jacobson references this new architecture in the Gartner whitepaper saying, “Manufacturers are forced to encounter and master the aligning, converging and integrating of the IT and operational technology (OT) realms. This requires new organizational designs and previously nonexistent technical skills and responsibilities.”

The IoT has major potential, but it presents challenges that manufacturers must address as they develop their IoT strategies. Connectivity, cloud storage, automation and data analysis are factors in the equation that must be mastered before the overarching IoT strategy can be implemented. It is the connectivity-inside and outside of the plant, the application of data collected and a change in an organization’s mindset that will create a difference for manufacturers.

Start planning your strategies now to be prepared or risk being left far behind.

About The Author: Larry Korak, Industry Strategy Direction, Industrial Manufacturing, Infor.

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