Over the next five years, IoT adoption could deliver a 3 percent revenue increase and 3.6 percent cost reduction across all major industrial sectors. The figures come from PWC’s 2017 Industrial Manufacturing Trends report which found IoT could offer firms improved efficiency and a chance to streamline their business.
As the global economy becomes more uncertain, major investments in new physical infrastructure can be unattractive. Companies could use IoT to improve the returns from their existing products, utilising the data insights to more effectively manage their assets. An oil company could analyse the data to get higher returns out of its existing wells, instead of drilling a new one, while producers could optimise output without buying more raw materials.
This introduces a challenge of its own. Companies coming from a traditional industrial background may struggle to harness the insights from their IoT devices. Enterprises could generate millions of data points each day, creating a torrent of information sourced from arrays of sensors, embedded devices and cloud software platforms.
Few companies outside of tech currently have experience in wrangling big data into a cohesive pool that’s ready to be mined. The number of experts in the field is relatively low and demand for their assistance is steadily growing. Firms embracing IoT are facing similar issues to those adopting the cloud. They’re unable to fully utilise their new tech due to a lack of personnel.
READ NEXT: Microsoft announces new AI tools for digital transformation
“If connected machines – the primary components of the Internet of Things (IoT) – are to be the backbone of industry in the near future, industrial manufacturers will have to figure out how to manage the data coming from an avalanche of sensors, integrated equipment and platforms, and faster information processing systems,” said PWC in the report. “There is a critical need to hire people who can mine these bits and bytes of information and work more closely with customers to use the data to improve equipment performance and open new revenue streams.”
IoT has other associated challenges too. Companies that use the technology have to consider the security of their devices. Strategies should be implemented to keep networks updated and maintained.
Manufacturing firms may appear to be at lower risk than companies in industries like transportation and healthcare. In practice, every industry is seeing a growth in cyberattacks. A compromise of a major industrial firm could let attackers steal trade secrets, extract sensitive data or infect Internet-connected equipment.
To manage these challenges, industrial manufacturers need to start overhauling their internal IT systems. Platforms need to be created that allow IT leaders to manage every node of an IoT network from a single dashboard screen. Analytics, standardised data transfer protocols and visibility into the network’s health and operation will be essential to successful IoT business integration.
In its report, PWC warned failure to respond could create “digital confusion” that wipes out any gains made through digital transformation. For an IoT strategy to be effective, it’s got to be accessible to leaders and exposed through a single technology architecture. IoT adoption is increasing but firms are yet to develop implementations that help them maximise efficiency.
