IIoT will redefine many sectors and accelerate economic and employment growth

The Industrial Internet of Things has been heralded primarily as a way to improve operational efficiency. But in today’s environment, companies can also benefit greatly by seeing it as a tool for finding growth in unexpected opportunities. With regards to this, Dataquest spoke to Rajan Sachdeva, Managing Director & Lead - Accenture Technology, India and got more insights on the  challenges/obstacles companies have to overcome and where does the future lie. Excerpts

Can you explain the concept of IIoT and how it is expected to play a crucial role?

The Industrial Internet of Things (IIoT) is the industrial application of a network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment. It can be described as a source of both operational efficiency and innovation that is the outcome of a compelling convergence of technology developments.

For instance, big data, ie, the exponential growth in data volumes that is available to companies in almost every industrial sector, primarily the ability to add sensors and data collection mechanisms to industrial equipment, the Internet of Things, which provides even more data—in this case about equipment, products, factories, supply chains, hospital equipment and much more, analytics and the ability it offers to mine and analyze data for insights into the status and usage of equipment, finally, using the context of industries where equipment itself or data outcomes are at the heart of the business.

In short, the IIoT enables companies to use sensors, software, machine-to-machine learning and other technologies to gather and analyze data from physical objects or other large data streams, and then use those analyses to manage operations and in some cases to offer new, value-added services.

How can companies extract the benefits out of it?

IIoT represents tremendous opportunities for companies looking to unlock new revenue sources by packaging their products with new digital services. Combining sensor-driven computing, industrial analytics and intelligent machine applications into a single universe of connected intelligent industrial products, processes and services, IIoT generates data essential for developing corporate operational efficiency strategies. There is rich opportunity to drive revenue growth through new, innovative, and augmented services for a rapidly expanding marketplace.

Accenture outlines some key steps that companies can take to move forward quickly and confidently harness IIoT’s potential:

Companies must think boldly about value. They must begin piloting a variety of new services that benefit key stakeholders:Customers, original equipment manufacturers (OEMs) and dealers, and they must think about the product, service, and value they can deliver to customers.

Companies must think about tomorrow’s partner ecosystem as they will work with existing and new partners and suppliers to create and deliver services as well as reach potential new customers. This opens up a significantly different understanding of the partner ecosystem, especially when considering the different capabilities and insights each supplier/vendor offers to the customer.

Companies must start now to design and develop their platform. They must investigate the pros and cons of new technologies, develop the architecture and frameworks that will accommodate sensor networks, industrial analytics and an ecosystem of intelligent machine applications.

 While IIoT opens up new revenue streams and cost optimization opportunities, companies must not be complacent but need to closely study the financials. They must understand the financial models they need to use to evaluate the return on investment. The thinking process must include how different business scenarios affect costs, pricing and margins, and a good grip on what revenues will be cannibalized if the business evolves to a services model.

 IIoT will transform the way various responsibilities in a business function. Companies must learn to sell their sales channel to promote new digital products and services. They need to train and motivate their sales and dealer network to support their growth strategy.

 Companies must give due emphasis to augment their workforce with smart machines, and put people at the center of executing their IIoT strategy. Just having smart technology around will not benefit the business; people must be trained and empowered to exponentially make a difference to their own and the overall business productivity.

To enjoy the benefits and advantages from IIoT, what are the challenges or obstacles companies have to overcome?

Transforming to an enterprise that has IIoT as an integral part of its strategy will not be easy – irrespective of the business' size, scale, and industry. Some of the most pressing challenges that companies will face in implementing an IIoT strategy will be:

• The lack of an enterprise-wide analytics vision and operating model, resulting in pockets of unconnected analytics capabilities, redundant initiatives and, perhaps most importantly, limited returns on analytics investments
• Security concerns impacting the company’s ability to implement a wide-scale big data initiative
• Data governance – clarifying legal rights, obligations, and securing access to information about the installed base. For example, establishing the owner of the data generated by a piece of machinery itself can be challenging, as it could be the company or the owner of the equipment
• System barriers between departments can prevent collection and correlation of data for maximum impact
• Quality and cost of data collecting machine
• The integrity of the network for transmission of massive amounts of data
• Talent acquisition impacting the ability to understand and realize the potential from the collected data
• Budget constraints slowing big data analytics initiatives
• Poor data quality or lack of confidence in data
• Reliance on multiple vendors and lack of integrated solutions
• Poor or lack of standard operating processes and practices

What all are the sectors likely to be more affected after adopting IIoT?

IIoT offers a chance to redefine many sectors and accelerate economic and employment growth, owing to its own disruptive capability as well as the changing economic scenario.
For example, in the manufacturing sector, connected sensor networks monitor logistics movements and machines such as mining equipment and entire utility plants help organizations reduce costs through more efficient operations. In agriculture, similar networks deployed across farmlands are improving the use of natural resources and contributing to better harvests. Such applications are much more pervasive when we consider consumer applications such as digital health and connected lifestyle products. The Industrial Internet of Things is very opportunistic to these verticals and others such as aviation, oil and gas, transportation, power generation and distribution, manufacturing, healthcare and mining. From an economic standpoint, as per research by the Accenture Institute for High Performance, the IIoT is projected to add $37 bn to India’s GDP in the next 15 years under current conditions.

However, by taking additional measures such as improving the telecommunications infrastructure, this figure could grow to $47 bn.

How IIoT will affect the future workforce?

IIoT is expected to open up new workforce needs as it creates redundancy in others. IIoT will computerize certain tasks and workflow, in particular, repetitive jobs which have so far resisted automation. To capture the bigger opportunities presented by IIoT, companies will especially need to look for skills in data science, software development, hardware engineering, testing, operations, marketing and sales. They will need this expanded talent base to handle three critical activities: Creating the new Industrial Internet of Things service sector, supporting users of industrial products and services, and mastering new ways of working.