A new report from PwC and the Manufacturers Alliance for Productivity and Innovation (MAPI) entitled Monetizing the Industrial Internet of Things, offers a rare glimpse into the actual penetration and application of IIoT technologies throughout the industrial sector.
The report points out that thousands of key assets are still not connected, as manufacturers struggle with where to make initial or additional investments for embedding connected functionality. In addition to proper application struggles, there is added complexity associated with cybersecurity, cost, and the potential to provide real value, as opposed to just another add-on functionality.
Some interesting data from the report shows:
- The number of all connected things globally currently rests at 8.4 billion – about one-third of which are associated with manufacturing, utilities, energy, and smart buildings. That number is projected to exceed 20 billion by 2020, or almost three times the world’s total population.
- Pushing fence-sitters to become IIoT adopters is a stat that shows the speed and data transfer capabilities of a 5G mobile network could enable $3.4 trillion in economic output within the global manufacturing sector by 2035.
- Nearly 90 percent of manufacturers are either currently offering IoT-driven products and services or are in the process of developing them. This compares to a 2015 PwC survey that found only 69 percent of manufacturers had either been embedding sensors to collect data or planned to do so in the future.
- 31 percent of manufacturers are implementing IoT-related enhancements to their internal operations and 56 percent are exploring it.
- When asked how their company has executed their IoT products and service strategies, 75 percent used internal resources, 26 percent relied on mergers and acquisitions, another 26 percent cited the use of a specialist vendor, and 23 percent adopted a third-party industrial internet platform.
The report identifies revenue generation, gaining a competitive edge, and satisfying customer demands as the leading drivers for advancing IoT adoption rates in the industrial sector.
- 38 percent of manufacturers are now offering IoT-driven products and services, with an additional 48 percent currently in the process of developing them.
- 40 percent of those investing in IoT product and services are earmarking between 5 and 20 percent of their total R&D budgets for these developments. Over the next five years, 42 percent of respondents expect to allocate 10 to 20 percent of their total revenue to IoT products and services.
- Over the next five years, manufacturers are expected to see revenues driven by IoT-based products and services increase by 10 percent.
- 14 percent of manufacturers surveyed say they have created go-to-market IoT strategies. Roughly half are in the creation process.
- 60 percent of IoT initiatives reportedly stalled at the proof-of-concept phase.
In terms of products or services that manufacturers could offer customers, the report offered these four possibilities:
- Product performance monitoring wherein the customer can access data from connected assets for real-time production status.
- Data analysis/diagnostics from the manufacturer or service provider could entail predictive maintenance alerts and prescriptive insights on purchased equipment or components, including push alerts on service, security, and software upgrades.
- IoT-driven field services for saving time in identifying replacement parts, identifying the most qualified field technician, or determining a software update to address an issue.
- The Pay-Per model that allows for charging on an asset usage basis, or on the service that an asset is providing.
The report also offered five recommendations for manufacturers, based on its findings:
- Identify realistic entry points.
- Define and demonstrate how IoT products and services create value for your customers and your company, which means being agile at the proof-of-concept stage.
- Develop go-to-market strategies that support your company’s IoT capabilities.
- Create scalable and future-proof IoT business models that promote an entrepreneurial culture in your development team.
- Learn from your products and your customers to improve, accelerate, and quickly scale up implementation.