Driving Unconventional Growth through the Industrial Internet of Things and General Electric Blog.
The IIoT is a major trend with significant implications for the global economy.
Nowadays, the term, the IIoT, has become increasingly more pervasive in the context of industry as digitization has become a business priority for many organizations. So what is the Industrial Internet of Things?
IIoT, also known as the Industrial Internet, brings together brilliant machines, advanced analytics, and people at work. It’s the network of a multitude of devices connected by communications technologies that results in systems that can monitor, collect, exchange, analyze, and deliver valuable new insights like never before. These insights can then help drive smarter, faster business decisions for industrial companies.
The IIoT is transforming industry —changing the way industries work. Whether it’s enabling predictive analytics to detect corrosion inside a refinery pipe, or providing real-time production data to uncover additional capacity in a plant, or driving visibility and control over your industrial control systems environment to prevent cyber attacks, the IIoT—and the software solutions powered by it—are driving powerful business outcomes.
By combining machine-to-machine (M2M) communication, industrial big data analytics, technology, cyber security, the IIoT is driving unprecedented levels of efficiency, productivity, and performance
It spans industries representing 62 percent of gross domestic product (GDP) among G20 nations, according to Oxford Economics, 1 including manufacturing, mining, agriculture, oil and gas, and utilities.
It also encompasses companies that depend on durable physical goods to conduct business, such as organizations that operate hospitals, warehouses and ports or that offer transportation, logistics and healthcare services.
The most conservative independent estimates place spending on the IIoT worldwide at $20 billion in 2012, with spending expected to reach $500 billion by 2020. More optimistic predictions of the value created by the IIoT range as high as $15 trillion of global GDP by 2030.
Operational efficiency is one of the key attractions of the IIoT
Predictive maintenance of assets is one such area of focus, saving up to 12 percent over scheduled repairs, reducing overall maintenance costs up to 30 percent and eliminating breakdowns up to 70 percent.
For example, Thames Water, the largest provider of water and wastewater services in the UK, is using sensors, analytics and real-time data help the utility company anticipate equipment failures and respond more quickly to critical situations, such as leaks or adverse weather events
IIoT also offers rich potential for those that make equipment and products to introduce new digital products and services, generating entirely new sources of revenue to improve both the top and bottom lines.
For example, a petrochemical producer can rely on predictive maintenance to avoid unnecessary shutdowns and keep products flowing.
For now, at the dawn of the IIoT, manufacturers are going after the low hanging fruit by improving the maintenance and repair services they already offer. But some trailblazer companies are forging ahead with unconventional ways to use the IIoT to provide value to customers.
To succeed in digitally contestable industries with the IIoT, executives will need to formulate new business models and go-to-market strategies at the macro level, rethink their core business and operations and introduce intelligence into products, services, processes and more. They will also have to open up their manufacturing operations, production facilities and product designs to new information technologies.
The IIoT is both a growth play and a defensive manoeuvre for today’s manufacturers, energy producers and service providers.
Mastering new ways of working Users of the IIoT products and services will not only find new work to do; they will also have to do work differently. Think about equipment operators: their jobs take on more sophistication and skill when they move from driving equipment in the field to operate UAVs and robotic equipment from a hub and service centre.
The Industrial Internet of Things is bringing new growth opportunities to companies that prepare themselves now. It is still early; there are technology challenges and important hurdles to overcome, particularly in connectivity and security.
Not all products can or need to be connected and intelligent right away. But amid the new, an old truth remains: business customers need products and services that create more value for them than those on offer today. The emerging Industrial Internet will unleash new energy into the world of industrial products and services.
To be a viable stakeholder as well as a partner in the digitally contestable future—and thus generate new revenues—companies will need to make the necessary changes. The time to push is now.