Data Among Keys to Industrial IoT Success
Among the first sectors likely to cash in on the Internet of Things is industrial, which has been in the vanguard of networking the factory floor to achieve efficiencies while collecting and leveraging all the data generated by connected devices and machines.
A new study on how to make money on the industrial IoT finds that manufacturers are pursuing a range of initiatives designed to encourages new revenue sources while hanging on to existing customers. The survey released by business consultant PwC and the Manufacturers Alliance for Productivity found that IoT deployments are picking up with 38 percent of manufacturers now offering IoT-based products and services.
Meanwhile, nearly half of manufacturers offering IoT products and services are selling data-gathering and analysis tools, software and other "customer-managed" IoT platforms. Consequently, these early adopters over the next five years expect IoT-based products and services to account for an average of 10 percent of total company revenue.
Despite the momentum in the industrial IoT sector, only 14 percent of manufacturers surveyed said they are ready to offer new services, while about half remain in the planning stages, "suggesting some companies are offering IoT products without a clear strategy to market those products," the report notes.
A key industrial IoT application is embedding sensors in devices that allow customers to collect data. Nearly 90 percent of manufacturers polled by PwC said they are either offering or developing such services, up from 69 percent in 2015. "Arguably the greatest value may be created, however, through the analytics and insights delivered to the organization (and its customers) leveraging collected data," the report concludes.
Among the emerging industrial IoT applications is a Rolls Royce (LON: RR) "engine health management" system that monitors thousands of jet engines using embedded sensors and live satellite feeds to collect performance data used to schedule engine maintenance.
Other IoT applications focus on improving factory efficiency. Thirty-one percent of manufacturers surveyed said they are implementing IoT-based enhancements to their internal operations, including approaches designed to boost supply chain efficiency as well as predictive maintenance of equipment and other assets.
As with other enterprises, IoT vendors noted that manufacturers have no shortage of data from machinery, inventory systems and supply chains. "But committing to getting the most out of that data is another matter," Ed Abbo, president and CTO of C3 IoT, told the report's authors. "If companies can’t get this right, they will be at a competitive disadvantage."
The bottom line for IoT deployments remains the bottom line. Among the challenges of demonstrating return on investments in IoT is "deciding what data, specifically, customers really need and want, ensuring we provide that data to them easily, and, most important, if all of that can justify an adequate return on their incremental investment?" explained David Burdakin, an executive with manufacturer JBT Corp.