Don’t look now, but the transformation of the industrial sector is under way. Whether you call it the Industrial Internet of Things (IIoT), Industrie 4.0, or digital transformation, companies have begun using new and existing technologies to completely reimagine their business models. For companies with the right organizational culture, Internet of Things platforms and technologies can bring significant opportunities to improve asset performance, deliver new service offerings, tweak operational efficiency, and create new products. Or, to put it another way, to grow revenues and cut costs.
Ushering in this new era requires two things of companies: a clear and compelling vision of the future state, and a dogged approach to incremental adoption. For most companies this isn’t a big-bang approach.
To help industrial companies make this transition, the ARC Advisory Group has created the IIoT Maturity Model. This helps individual companies understand where they stand, where they should aspire to get to, and the incremental steps needed to get there.
ARC’s maturity model aims to understand and examine a number of related factors at the individual plant level and across the entire enterprise. These factors include:
- Organizational culture: Specifically, how do decisions get made in production operations?
- Information: How well – and how widely – is information shared across the enterprise?
- Business processes: How well – and how richly - are production operations integrated with business need and demand?
- Fixed assets: How intelligent and connected are fixed assets within the plant?
- Systems and infrastructure: Is the technology foundation dated and inflexible or modern and agile?
- Cybersecurity: How well-secured are industrial information assets and data?
Leveraging this maturity model, the ARC Advisory Group recently surveyed industrial companies with an eye toward helping them understand how they measure up relative to their peers. Some of that data is presented here.
It was important first to examine how conceptually ready companies are to benefit from the IIoT – in other words, how ready they are to commit time and resources to making the IIoT a reality for them.
Benchmarking IIoT readiness
It seems that marketers still have some work to do. As Figure 1 shows, one in six survey respondents (17%) did not understand what the IIoT is – or of more importance, how it can help them. On a more-positive note, ARC Advisory’s survey data shows that at the other end of the spectrum, many organizations are quite advanced in their IIoT attitudes and approach.
Almost one-third (30%) of survey respondents already are actively using IIoT tools or investing in projects that will soon be live. What’s interesting is that the maturity of IIoT adoption that our survey shows maps closely with the classic technology adoption curve. If you take Figure 1, take out the 17% bar, and flip the axes, you have a classic technology adoption curve.
The 12% of survey respondents who have already deployed IIoT solutions are quite broad in their application and vision for the IIoT. However, there is currently a slightly keener focus on products (new or existing) than there is on tweaking existing services or introducing new services.
Cummins Engines provides a great example. Most manufacturers receive little or no meaningful feedback on how their customers actually use a product. And yet a product’s performance, life span, and total cost of ownership can be affected greatly by how a product is used. The environmental conditions in which the product is operated are also a major factor. Capturing such data can have a major impact on the design of future products.
For this reason, Cummins decided to implement a closed-loop feedback system to gather more data on real-world engine performance under a diverse range of operating conditions. The potential was there – the engine control module (ECM) already in use provided embedded intelligence in each engine. The ECM was used to collect data and transmit it to the cloud, via cellular networks or WiFi. This wealth of data will allow Cummins to improve engine design, gain a competitive advantage, and grow market share. As a secondary benefit, the data may also enable Cummins to offer predictive maintenance services. Product improvement is the first priority, but potential service offerings could expand Cummins’ business, too.
Among survey respondents, 27% are actively evaluating the IIoT’s potential for their enterprise. Overall, then, a majority of survey respondents – 57% – have already set the IIoT wheels in motion for their organization. This may seem like a big share for a concept whose ascendancy in the popular imagination has been so short. But while IIoT may be revolutionary in concept, it will be evolutionary in adoption for most companies. In other words, the Industrial Internet of Things is more of a journey than a thing.