In a cutthroat business environment, the Industrial Internet of Things (IIoT) presents unprecedented opportunities for creating new revenue streams. For the moment, however, these opportunities are going unrecognised by Norwegian companies. Instead of viewing the IIoT as, principally, an enabler of operational efficiencies, it’s time to shift the focus and reap the rewards.
Norwegian companies are no strangers to disruption. Competitors with new operating models and innovative products and services are entering their markets all the time. But now, with even more intense competition on the horizon, the threat level is higher than ever. For most companies, doing the same, more efficiently, is unlikely to be enough.
This is where the IIoT could prove to be a real game-changer. By delivering new market opportunities, greater productivity and faster cycles of innovation, it has the potential to provide Norwegian companies with vital competitive edge. Since every company abroad in also thinking likewise, the speed to act is crucial. The scale of impact is enormous. Accenture analysis projects an additional US$159 billion being added to Norway’s GDP by the IIoT over the next 15 years.
For the moment, however, few Norwegian companies are bringing this potential to life. A recent Accenture survey identified a yawning gap between the benefits Norwegian companies attribute to the IIoT and their preparedness to commit investments to it. Almost all the C-suite executives we spoke to in Norway (97 percent) believe their organisations have the capability to create new, service-based income streams using the IIoT. But despite that, none of them have developed a comprehensive strategy for doing so (and just 3 percent have made any concrete investments in these technologies).Time to act is now.
There’s some misapprehension too over the opportunities presented by the IIoT. For most businesses in Norway, it’s still viewed primarily as a means of reducing operational expenses. Only 3 percent of our respondents saw new revenue streams through new products and services as a key benefit.
We are now starting to see some Nordic companies proving the IIoT’s broader business benefits. For example, Statens Vegvesen, in collaboration with Volvo, is exploring the possibility of using the car as a sensor in large connected networks of systems. The IIoT solution that they have developed has the potential to improve both operational efficiency (eg focused quality controls of signs and roads based on data from car sensors) and provide new services (eg real-time alerts on road and local weather conditions based on car sensors).
Something else to consider; A connected car ecosystem provides revenue opportunities for adjacent businesses. How does that play out? In winter, Norwegian car owners could receive short-term offers on towing. By connecting to the car ecosystem and using local weather conditions, insurance companies can sell offers like this by the hour at a premium price generating new revenue streams.
The speed of digital disruption is increasing all the time. And so is recognition of the real business impact created by digital technologies. Just one year ago, only one-third of global C-suite executives emphasised the revenue opportunities presented by digital. This year, over 60 percent cited digital initiatives as a tool for growth. A similar reassessment of the IIoT’s impact is urgently needed—and Norwegian companies that recognise this, and invest accordingly, will build key competitive advantage in an increasingly challenging business environment.