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Shifting to an economy of outcomes

Why businesses require a strategic response to the Industrial Internet of Things.

New technologies drive industrial revolutions. The steam engine powered the first. Electricity powered the second. Exponential increases in computing power have fuelled the third. And today we stand on the threshold of a fourth industrial revolution—potentially the most transformative ever—powered by the connected, intelligent machines and devices that characterize the Industrial Internet of Things (IIoT).

The IIoT creates a vast and self-sustaining ecosystem of cyber-physical systems enabled by such disruptive digital technologies as analytics, Cloud, and 3D printing. It also opens up a massive market opportunity for a multitude of industrial sectors.

From manufacturing to automotive, from utilities to health, businesses that successfully exploit the promise of the IIoT will create considerable competitive advantage for themselves—and new value for their customers. First, however, they need to recognize its full significance.

The operational efficiencies the IIoT enables are already evident. Sensors in engines can tell technicians when they need repairs. Smart grids can help reduce energy consumption. Mobile monitoring can cut healthcare costs.

But technology is only part of the IIoT story. This new industrial revolution also enables an entirely new kind of economy: an economy focused not on products, but on outcomes—a seismic shift for most organizations.

In part, of course, the challenge is still around technology. Consider the case of a connected excavator in the construction industry. You need to push data through its sensors. You also need to store that data, create algorithms that can interpret it, and feed the resulting intelligence back to the excavator operator via a wearable or other smart device—all in real time.

A digital platform would allow the machines and devices involved in this outcomes-based ecosystem to integrate and interact. And the good news is that the platform elements used in one sector can be repurposed for another. The requirements needed for connected cars, machinery, healthcare and homes are essentially the same.

Even so, as organizations reposition as providers of services that deliver better outcomes they also need to think very carefully about the usability of the technology they leverage—and the risks it entails. Cyber security is a critical concern. Mitigating it needs to be a strategic priority.

Strategy, indeed, is key to realizing the full potential of the IIoT. Companies need to evaluate their current business models and explore new ones. They need a clear vision of what the IIoT means for them, as individual organizations, and a roadmap that prioritizes and schedules the necessary organizational changes.

No one yet knows just where the IIoT will lead us. But the transformation it heralds is already underway. Now is the time to start your journey toward sustainable competitive advantage.

Aidan Quilligan
Managing Director, Accenture Industrial Software Solutions