Industrial adoption of IoT dubbed as the Industrial Internet of Things (IIoT) is on the ascent. Yet near-term adoption of IIoT remains mainly limited to achieving operational efficiency as most companies are unable to leverage IIoT for enhanced capabilities that create new business opportunity.
There is no doubt that the IoT revolution will dramatically alter global economics by fundamentally transforming interactions between humans and machines. While consumer adoption of connected technology will continue to be gradual in the short term, more pervasive adoption will be inevitable over the next decade. However from an Industrial standpoint, IIoT is already gaining pace - for example, during the past three years the number of sensors shipped globally has increased more than five-fold.
Operational efficiency is one of the key attractions of the IIoT, and early adopters are focusing on harnessing these benefits. Deploying automation and using IIoT to make production techniques more flexible could massively boost productivity.
However, there is more to the story. Putting it simply—IIoT is a combination of Big Data analytics with the IoT. It is not only a source of operational efficiency, but also for breakthrough innovation and new growth opportunities. Add the growing technology capabilities in the area of analytics—radically enhancing the ability to mine and analyze data for future-looking insights.
As an example, a major automobile manufacturer is pursuing a unique approach to increase value for customers: A flexible, convenient pay-per-use model for city dwellers needing cars. Customers can use an app to find the car that is parked nearest to them. They open the door with a membership card, drive to their destination, and simply park the car on the street and lock it up. This service competes with conventional taxis and hourly car rental services. Customers can choose to pay by the mile, the hour or the day. The rates are lower than for taxis, and there is no need to reserve, return or order a car; the cars can be parked and found anywhere using location sensors.
The automated quantification capabilities of the Industrial Internet will result in an outcomes economy. The large-scale shift from selling products or services to selling measurable outcomes is a significant change that will redefine the base of competition and industry structures. As the Industrial Internet becomes more ingrained in every industry, it will ultimately lead to a pull-based economy characterized by real-time demand sensing and highly automated, flexible production and fulfilment networks. This development will call for a pervasive use of automation and intelligent machines to complement human labor (machine augmentation). As a result, the face of the future workforce will change dramatically, along with the skill sets required to succeed in a much more automated economy.
Yet, it is still early. Numerous important hurdles remain to be overcome. Not all products can or need to be connected. But amid the new, an old truth remains: Business customers need products and services that create more value compared to those today. The time to push is now.
Aidan Quilligan, Managing Director, Accenture Industrial Software Solutions