PWC on the greatest challenges for adoption of the Industrial IoT

Author: Steve Hirshfeld

PWC on the greatest challenges for adoption of the Industrial IoT

In spite of all the exciting things that are occurring in the emergence of the Industrial IoT there still remain many challenges and obstacles to overcome for it to achieve more rapid growth. PWC conducted extensive interviews with companies to identify what these major obstacles were. The results of the PWC survey were:

  • Unclear economic benefits and excessive investments- 46%
  • Insufficient qualification of employees- 30%
  • Lack of standards, regulations and forms of certification- 26%
  • Unclear legal situation regarding the use of external data- 22%
  • Low maturity level of required technologies- 20%
  • Unresolved questions regarding data security- 19%
  • Lack of clear prioritization and support from senior management-18%
  • Insufficient network stability and data backup- 6%

FactorLab hopes our blogs and use case analyses provide supportive research material and tangible information to help alleviate the concerns often associated with radical advances such as IIoT.

PWC Report: “Opportunities and Challenges of the Industrial Internet of Things (IoT)”

Opportunities and challenges for consumer product and retail companies

PWC conducted an analysis of far reaching quality benefits of IIoT

Author: Steve Hirshfeld

PWC conducted an analysis of far reaching quality benefits of IIoT

Companies who are applying IIoT solutions are showing higher levels of customer satisfaction. They are also though showing major improvement in quality levels and metrics. The areas showing the greatest benefits are:

  • Better planning and controlling in production and logistics
  • Greater flexibility in production
  • Faster time to market in product development
  • Improved overall quality
  • Better individualization of products

As companies come to recognize the operational and process improvements made possible through digitization and the Industrial IoT they will likely move faster in conducting their own confirming use cases. FactorLab looks forward to working with many of these organizations to produce real results benefiting both our customers and theirs.

PWC Report: “Opportunities and Challenges of the Industrial Internet of Things (IoT)”

Opportunities and challenges for consumer product and retail companies

Dimitry Gorinevsky Professor at Stanford on IoT Analytics

Author: Steve Hirshfeld

Dimitry Gorinevsky Professor at Stanford on IoT Analytics

Dimitry Gorinversky is also the CEO of Mitek Analytics. Mitek’s software automates Data Science for the Industrial Internet of Things (IoT). Mission-critical industrial systems rely on Operational Technology (OT). The Industrial IoT innovation is in managing the OT data in IT systems. Mitek provides value-added analytics for the converging IT and OT systems of the Industrial IoT. In 2016 Mitek conducted an analysis of the Digital and the industrial 4.0 Revolution and came up with some very interesting findings. Gorinevsky contends that:

  • The digital revolution is about “connected people” and represents about 10-15% of the economy.
  • While the Industrial IoT revolution is about connected machines, which represents nearly 80% of the economy. In the next several years there will be more connected machines than there are smart phones.

When one looks at business, value and supply chains from the perspective of lifecycle costs one see just how large a force IIoT in the operation and service support aspects of a business.

  • But IIoT is more than about development and manufacturing which addresses about 15-25% of lifecycle cost
  • The IIoT will have its greatest impact on how in dramatically changes operations and support systems which can be between 65-80% of lifecycle cost.

Gorinevsky believes the greatest breakthrough technologically speaking will be the convergence of information technology (IT) and operational technology (OT) computing. Examples pf IIoT analytics are from a strategy view having improved risk analytics, from a logistics helping with demand predictions, and for asset fleet analytics using digital twins in its analyses to support decision-making.

Dimitry Gorinevsky on “Analytics for the Industrial Internet of Things”, October 2016

Analytics for Industrial Internet of Things

CB Insights on Investments in various IoT Segments

Author: Steve Hirshfeld

CB Insights on Investments in various IoT Segments

CB Insights issued a detailed report examining where the investments are being made in support of the digitization and Internet of Things (IoT) phenomenon. This report “follows the money” looking at the last 3-4 years. It segments things by industry and also by taxonomy category. It identifies the leading investors and also the firms receiving investments. This report helps both the startup seeking financing and the mid and larger corporations looking for reinforcement that the types of applications they are contemplating have had investments made in support of their advancement from ideas to use cases to real world implementations. Here are some of the highlights. Between 2012 and 2016 $12.6 billion was invested in companies in 1972 deals. They created a taxonomy of where IoT investments are being made. The categories are

  • Wearables
  • Manufacturing and Supply Chain
  • Extraction and Heavy Equipment
  • Network Infrastructure and Sensor Development
  • Utility and Smart Grid
  • Big Data Analytics and Machine Learning SaaS
  • Transportation and Fleet
  • IIoT Cybersecurity

CB Insights then populates each of these categories listing startups and established companies serving each segment. Interestingly 4 of the top 11 investors in IoT startups over the last 4 years are corporate venture funds including Intel, GE, Cisco and Qualcomm. The most rapid growth right now is in the Industrial markets not retail or consumer

CBinsights on “Where the industrial internet of things investments are being made”

The Industrial IoT

IDC on the critical role of the platform in the Internet of Things (IoT)

Author: Steve Hirshfeld

IDC on the critical role of the platform in the Internet of Things (IoT)

IDC points that there are many platform players that range from small niche players and startups to large corporation. The suppliers tend to focus on a particular area such as device connectivity, application management, analytics or connectivity to enterprise levels. What is needed though is a center point that acts like a platform of platforms to integrate these targeted platforms in a holistic sense. This is where the IBM Watson IoT portfolio enters the picture. IoT will be a key driver of the transformation that enterprises will experience as digitization and IoT become more pervasive and more integrated into the company’s businesses and where it fits into the larger ecosystem in which it participates. IDC sees the transformation occurring in five major areas.

  • Leadership transformation
  • Omni experience transformation
  • Information transformation
  • Operating model transformation
  • Workforce transformation

The Internet of Things (IoT) is so vital because it allows companies to develop new business models more appropriate in a period of transformation. The other major point that IDC makes is that while there is much talk about IoT in consumer applications the reality is that by 2020 about 80% of spending will be in B2B applications.

IDC on Platform of Platforms in the Internet of Things, February 2016 (sponsored by IBM)

IDC on the critical role of the platform in the Internet of Things (IoT)

Forrester The Internet of Things (IoT) Heat Map

Author: Steve Hirshfeld

Forrester The Internet of Things (IoT) Heat Map

Forrester issues a report it calls its “Heat Map” which looks at bigger things going on in an industry or technical field at a given point in time. Which things are having the greatest traction right now. They have done one of these for leading IoT Use Cases.

The hottest established IoT applications are in manufacturing, transportation, government and retail. They are:

  • Industrial asset management in manufacturing performing scheduled operational tasks
  • Fleet management in transportation using GPS locations to track trucks
  • Security and surveillance applications in government in areas of public safety
  • Inventory and warehouse management applications in retail for inventory and supply chain processes

Other hot applications in healthcare, utilities and pharma. They are:

  • Smart products in healthcare monitors instruments, does diagnostics and repair processes
  • Energy management in utilities using smart meters to deploy new services
  • Supply chain management in pharmaceuticals tracking medications

Forrester the Internet of Things (IoT) Heat Map, January 2016

Forrester The IoT Heat Map

Which Industrial IoT Applications are having the greatest Impact?

Author: Steve Hirshfeld

Which Industrial IoT Applications are having the greatest Impact?  

A series of research and field based analyses have been conducted by leading consulting firms and corporations related to which applications are being explored the most and having the greatest impact in implementing IoT services.  We have as part of our own research in support of our strategic planning complied a set of these analyses and their findings. We would like to share this with you. We are highly encouraged that the critical applications we have focused on in field-based use cases are consistently in areas identified by these independent respected organizations. This larger context of support gives us even greater confidence that our early results are harbingers of bigger opportunities to serve our customers ahead. Links for these articles and presentations are provided below.

ARC Group did a survey showing that the Top IIoT Drivers were in ranked order:

  • Reduced machine or asset downtime
  • More rapid service response
  • Improved process performance
  • Improved personnel productivity
  • Reduced machine or asset lifecycle costs
  • Improved asset utilization and ROA
  • Opportunity for business innovation
  • Ability to sell products as a service

Another ARC Group analysis looked at the five top perceived benefits of IoT

  • Cost savings from operations
  • New/better streams of data to improve decision-making
  • Staff productivity gains
  • Better visibility and monitoring of assets throughout the organization
  • New/better customer experiences

Forrester surveyed companies on what the greatest benefits of IoT were:

  • Improved customer experiences
  • Supply chain optimization and responsiveness
  • Supply chain stability
  • Loss prevention
  • Cost efficiencies
  • Improved delivery process
  • Improved safety
  • Improved regulatory compliance
  • Improved forecast accuracy
  • Risk management
  • Facilitate cross function and company collaboration

The Forrester study also asked about the importance of various benefits in driving businesses to adopt IIoT more rapidly. They were:

  • Optimize asset utilization
  • Reduce operational costs
  • Improve worker productivity
  • Enhance worker safety
  • Create new revenue streams
  • Improve sustainability
  • Enhance customer experience

CompTIA examined the benefits of IoT and found the following.

  • Cost savings from operational efficiencies
  • New/better streams of data to improve decision-making
  • Staff productivity gains
  • Better asset visibility and monitoring
  • New/better customer experiences
  • New product/service revenue
  • Automating business processes
  • Staff productivity gains
  • Automating factory and transportation supply chains

HCL analyzed the benefits of increased utilization of IoT

  • Increased organizational efficiency
  • Increased use of data to drive insights
  • Use of value added services
  • Moving ahead of competition
  • Ability to adopt new business models
  • Opportunities to move up and down the value chain
  • Better communications between business departments
  • Expanded product portfolios

While there is variability across these studies based on the particular organizations interviewed and observed or the way questions are asked, there is a clear pattern of how operations can be dramatically improved, better management and utilization of assets becomes possible, matters of safety and employee productivity are consistently possible, and customer experiences either identified directly as a top benefit or the result of the above improvements are real.

  • ARC Group on Industrial Internet of Things The New Frontier, February 2015
  • Forrester on Internet of Things Solution Deployment Gains Momentum
  • CompTIA on the Internet of Things Insights and Opportunities
  • HCL on the Benefits of increased utilization of IoT

FactorLab: We help you connect the Industrial IoT DoTs

Author: Steve Hirshfeld

FactorLab: We help you connect the Industrial IoT DoTs

We look forward to sharing with you some of the exciting opportunities associated with the emergence of the Industrial IoT. Our goal is to look ahead, see what is possible, and then extrapolate what it means to you, our customers, in a pragmatic actionable way right now. We hope to work with you in mapping out a longer-term course for competitive advantage, differentiation and avoiding permanent residence in commodity hell. In doing this we can improve operations, grow revenue, stretch our collective thinking and give the tools to your employees that create higher levels of engagement and greater individual productivity.

We draw wisdom and insight from the words of a Great Leader, a Great Mind, a Great Author and a Great One.

Jeff Immelt, the Great CEO of GE: was interviewed one year after becoming CEO on what his greatest learning and insight was during that initial period. He responded that it was: “Understanding context. It’s how your company fits in with the world, understanding where it is heading, and determining how you respond to it.” With the enormous impact the Industrial IoT has had on his company and on the world of business, it is great advice for all of us to consider from both a strategic and an operational perspective.

Albert Szent Gyorgi, the Great Mind and Nobel Prize Winner: won the award for discovering Vitamin C. When asked how he defined discovery he said “Discovery is seeing what everybody else has seen, and thinking what nobody else has thought”. The great thing about digitization and IoT is all the new possibilities it creates. But the magic only happens when one discovers insights not available before or being able to do things at a speed or lowered cost that radically advances the business.

Mark Twain, the Great Humorist and Author: had a gift of saying in simple terms complex things that sometimes are counterintuitive or where a hardened view of how things work can be problematic. The way he put it. “You can’t trust your eyes when your imagination is out of focus”. IIoT has the potential to radically change your industry, the way we conduct business, how we create and deliver value, and how we will win and succeed in the marketplace.

Wayne Gretzky, the Great One and Superstar: was one of the greatest athletes of all time. When asked what made him so good and successful for so long, he responded simply saying “I skate to where the puck is going to be, not where it has been”. It is hard for a company to continue to succeed if it is unable to anticipate and respond to changing forces. This is why FactorLab considers itself a “real world laboratory” and a place for experimentation and innovation. But we know what ultimately made Wayne Gretzky so great was he delivered results, scoring more goals than anyone else.

The Transformative Impact Industrial IOT can have on Business

Author Steve Hirshfeld:

The Transformative Impact Industrial IOT can have on Business

There is no question that digitization and the Industrial IoT are starting to have dramatic effect. Many industry authorities are calling 2017 the year IIoT goes mainstream. The early adopter’s use case successes are growing in number and impact. We at FactorLab can speak to the compelling benefits that our customers and theirs are deriving from intelligent applications related to core processes and business practices.

McKinsey recently in a study showed how dramatic these benefits can be. Digitization and IIoT can:

  • Increase productivity by 3-5%
  • Reduce maintenance costs by 10-40%
  • Reduce total machine downtime by 30-50%
  • Reduce costs for quality by 10-20%
  • Reduce costs for inventory holdings by 20-50%
  • Reduce time to market 20-50%
  • Increase technical professionals’ productivity through automation of knowledge work by 45-55%
  • Increase forecasting accuracy to 85%

McKinsey: Digital in Industry: From Buzzword to Value Creation, August 2016

The Transformative Impact Industrial IOT can have on Business

ABI Research: The Industrial Internet in 2020 and Beyond, 2014

Author: Steve Hirshfeld:

ABI Research: The Industrial Internet in 2020 and Beyond, 2014

 

ABI Research did an analysis of “Where is the Money in the IoT Value Chain”. It shows that only 7% is from the Hardware component, 20% is from matters related to Connectivity and the remaining 77% are associated with Value Added Services. Given the huge importance of these services the obvious question becomes which applications are the ones that really show quick benefit and are setting a path for continuous improvement or even business model reinvention.

 

The Industrial Internet in 2020 and Beyond