Busting 3 IIoT myths

Jan. 17, 2017
In this installment of Automation Zone, don’t let these misconceptions be excuses for not getting your plant more connected.

There’s no doubt that the industrial internet of things (IIoT) market is evolving quickly. International Data Corp. (IDC) predicted in a 2016 report for IFS that the installed base of IoT endpoints would grow from fewer than 13 billion units at the end of 2015 to 30 billion by 2020. The industries that IDC predicts will spend the most on IoT solutions are manufacturing, transport, energy and utilities, and retail, with a wide range of IoT use cases.

In other words, the industrial IoT clock is ticking, and businesses not already addressing the opportunity offered by the IoT need to create and implement their plans – quickly.

About the Author: Dan Matthews

Dan Matthews is CTO at IFS. In that role, he leads the company’s Research & Strategy unit. Before joining IFS in 1996, Matthews ran his own software development business.

So why are some companies still hesitating? One answer is that there are several misperceptions or myths regarding the IIoT that are causing decision-makers to hesitate and sometimes delay or stop an IIoT project altogether. A heavy focus on standards, exorbitant expected costs, and the fear of big changes all are cited as reasons for not pursuing IIoT projects. Let’s take a closer look at these.

Myth #1: We should wait for standardization

BUSTED! Unlike consumer markets, where standardization – formal or by market dominance – is key to success, for the IIoT, standardization won’t be a concern for decades.

Sure, there are multiple emerging standardization initiatives in the IIoT, and it’s not yet possible to know which will grow or be marginalized. But the thing is that it doesn’t matter. In consumer markets, new standards for, say, NFC chips in smartphones can roll out and get near-full market presence in the few years it takes for people to replace their phones. But industries are run on equipment that is anywhere from years to several decades old. This equipment has been provided by tens or hundreds of different suppliers.

Even if the equipment manufacturers “IIoT-enable” their latest generation according to some IIoT standard, it will take decades before industries have replaced all their existing equipment and assets with new IIoT-standadarized versions. For the foreseeable future, we won’t see standards on how to connect up all industrial things. Instead, industries should expect and plan for bespoke integration development or even retrofitting of other sensors and communications capabilities to equipment and assets to get them connected.

Myth #2: IIoT would be a giant leap for my business

BUSTED! IIoT success is all about choosing small, actionable steps that will improve your business today – not aiming for giant leaps that will transform your industry tomorrow. For many people, the IoT still brings to mind disruptor companies like Uber or Netflix. But in most cases the IIoT develops rather than disrupts the entire business. According to the previously mentioned IDC report, the main drivers behind IIoT are improvement of day-to-day operations, including improved productivity (14.2% of the companies), improvement of quality and time-to market (11.2%), process optimization improvement (10.2%), reduced costs (9.9%), and improved decision-making (9.3%).

A look at the vast majority of companies that have already operationalized the IIoT shows that the successful ones often have started with a few well-chosen processes and incremental change. It can begin with connecting just one piece of equipment. Earning a little more revenue from this can then inspire us to take a bigger step. What would happen if we integrated these findings with input from another data stream – external events, such as weather forecasts or temperature changes, for instance? How could changing operations on this machine according to these inputs optimize its performance?

The key is to ask, “How can we make this a little more efficient?” not, “How can we revolutionize our whole business?” Incremental change is the name of the game. The IIoT is about improving performance.

Myth #3: IIoT will be expensive and capital-intensive

BUSTED! A few years back this statement might have been true, but three key developments have made IIoT implementation more affordable than ever before:

  • The falling price of IIoT hardware and software: Everything from the smallest sensors to the largest gateways has fallen in cost. Smarter, cheaper sensors and gateways are available to all industries, allowing you to increase your level of software control. If we take as a typical example a forklift truck, 10 years ago, connecting one of these would have cost at least $1,000 – out of reach for most logistics and manufacturing operations running several of them. Today a single forklift could be connected for not much more than a 10-dollar note.
  • Cheaper, broader internet access: This has made it ever-easier to connect a broader range of machines and equipment across a wider geographic area at a low cost. New developments such as 5G mobile networks and LoRa will help ensure that this trend continues.
  • Cost-effective IoT cloud platforms: On the platform side, we’ve seen big, exciting changes. Ready-to-use cloud-based IoT platforms that can handle massive scale, storage, and computing are now more widely available than ever before.

These three changes have made it possible for companies to get started with IIoT projects more quickly and with lower risk than before, enabling more experimenting to reach success.

Operationalizing data: The key to IoT success

Beyond buying into these IIoT myths, many companies overlook the critical issue of how their IIoT data should be operationalized. To get returns from IIoT investments, it’s important not to stop at collecting and analyzing IoT data. If you do only that, you still have not made a dollar. To benefit from the IIoT, the knowledge and insight you gain needs to be turned into action that optimizes your business – whether that’s in the form of a more-optimal maintenance plan, higher service levels, improved logistics, better-engineered better products, or entirely new business models.

This can be done in several different ways, but one key step in operationalizing your data is automating the right processes based on gathered data. To illustrate with an example: Equipped sensors capture data about too-high temperatures. Instead of just collecting, registering, and manually acting on this data, a process is created for automatically dispatching service personnel to replace a part that has suffered overheating – thus preventing future catastrophic failures. Operationalizing and automating: This is when the true power of the IIoT comes to life and can generate significant revenues.

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