It’s said that the industrial internet of things (IIoT) will help enterprises improve business performance and enjoy growth from new products, enhanced and new customer experiences and even new business models. The challenge, as we covered in “The Industrial Internet of Things Still More Promise Than Reality,” is that business leaders still don’t have a clear plan forward when it comes to implementing and benefiting from these new connected technologies.
With that in mind, we reached out to Dave Murray, director of thought leadership at the BPI Network, which conducted the survey of 350 global IoT leaders that formed the basis of “The Impact of Connectedness on Competitiveness: Creating Business Value From Operational Insight Driven by the Industrial IoT” report.
Below is our short conversation.
Leadership Suite: Based on your research for “The Impact of Connectedness on Competitiveness,” where do most executives stand today when it comes to their vision of the IIoT?
Murray: They are starting to get their feet wet, and are starting the early stages of implementation or their pilot stages. There is just a tremendous amount of interest out there, and I would say, belief that in the next three years the industrial internet of things will have a significant impact on competitiveness.
At the same time, I think executives are also saying, “We really don’t know what our long-term strategy should be. We haven’t thought through how this is going to change our business models. We don’t have the talent, in terms of technology integration, data integration and analytics, to get the job done.”
I think there is a certain amount of concern regarding falling behind. So a lot of companies are just starting to incrementally work on IIoT, mostly with their own products. For instance, equipment manufacturers are integrating sensor technology into their products to improve uptime, and preventative and predictive maintenance.
Leadership Suite: Do you see apprehension among CIOs regarding the IIoT?
Murray: Over the long term, I think many executives just don’t know where this all leads, and they are concerned that they don’t know.
There’s also certainly concern about security. We asked, very directly, “What are your top concerns?” The first three are all about security and who owns the data. And the privacy issue about how much vendors are going to know about their customers.
After those security and privacy concerns, among large companies at least, the top concern is competitive disruption. There’s a concern about what this going to mean for their industry and their company. Am I going to be disrupted by this technology? they are asking themselves.
Leadership Suite: If I were a CIO, CEO, or executive that would be a big concern of mine: Am I missing something that a competitor is going to see? Am I going to suddenly fall behind a year?
Murray: Particularly among large companies, that’s a definite concern.
Leadership Suite: Do you think widespread adoption and related transformation of IIoT will play out as quickly as people expect now, or might it take longer than many assume? An example that I think back to is the mid 1990s: There was a ton of writing about the death of brick-and-mortar retail back then. And a lot of what was predicted to start happening is really just starting to come to fruition in the past couple of years.
Murray: I agree. I think what we’re going to see is going it’s to be incremental. It can’t happen all at once. They don’t have it figured out. They don’t have the skills and technologies in place to make it all happen, but they are starting to implement. And I think that will just grow over time. There are many issues ahead. There are issues with standards. There are issues with building up ecosystems to create more compelling offerings. But I think that we’re going to see a significant uptake in the next three years.
I think it was most large companies who said that they thought that it would have a significant to major impact on their industry in just the next three years. Understanding that there is a big different between expectation and reality in technology adaption. I’m not saying that in three years, the world will look very, very different, but I’m saying we will be much farther along.
Leadership Suite: I suspect we might be further along seeing IIoT capabilities installed in products and applications, and some tactical enterprise deployments rather than big systemic efforts?
Murray: I think that’s correct. I think we’re seeing that already. That discreet product-level deployment. But I think that as these companies move forward, they’re going to change business models to provide new services, database services. To provide equipment more as a service than a sale. Then I think that over time, you’re going to see very big deployments that change the face of manufacturing.
We talked to Airbus and they and all the other aircraft manufacturers have deployed sensors into their planes to improve preventative and predictive maintenance. But in addition to that, it will be deployed more across their products, their aircraft, but also Airbus is talking about the factory of the future. The smart factory. IoT is all about the way they are going to design their next manufacturing process in plants.
Leadership Suite: Based on your survey and enterprise interviews, what’s your advice on how companies should start thinking about IIoT if they haven’t yet? Or, if they have, what should be their focus?
Murray: My advice is No. 1 that executives need to know that clearly companies are beginning to take action here. And it very well may be a big competitive differentiator over time. I don’t think companies can afford to wait on the sidelines. I think they’ve got to start to deploy this technology and understand how it may change their business models, and how it can affect their business processes. I certainly think it’s time for industrial companies to take action, although on an incremental basis.
Just as you say, you look at commerce and retail, and you could envision what has taken place back in 1999. But it took many years to get there, but it’s coming. And companies that aren’t prepared and lag behind will suffer competitively.