Most manufacturers are dabbling in the industrial Internet of Things (IIoT), but few have clear business strategies or goals for the technology, according to a new study from industrial equipment and automation specialist Emerson.
Sixty percent of manufacturers are currently exploring or have already begun IIoT pilots, found Emerson after a survey conducted on IndustryWeek readers. However, only five percent are having their investments guided by a clear business case and implementation strategy.
This astute, albeit small group of pioneers may benefit the most from the rapid growth of the IIoT market, according to Mike Train, executive president of Emerson Automation Solutions.
“The small percentage of companies that have already developed clear business plans for Industrial IoT are positioning themselves to realize tremendous competitive advantages,” said Train in a statement. “We encourage everyone else to consider two critical first steps: start small and invest in applications that enable a clear business case.”
Earlier this year, Grand View Research predicted that the market for industrial IoT devices and services will balloon to nearly $934 billion by 20254, expanding at a compound annual growth rate (CAGR) of approximately 28 percent on the way to that lofty figure. Somewhat echoing Emerson’s findings, Grand View Research found that 57 percent of large enterprises have either committed to conducting an industrial IoT pilot or already have one underway.
For factory owners, Emerson’s report indicates that the IIoT offers both risks and rewards.
Nearly half (47 percent) said that IIoT-enabled operation efficiency programs may clash with their company culture. Forty-one percent said they lacked a clear business strategy and 34 percent admitted to having trouble identifying the technologies that deliver measurable improvements.
Despite these challenges, there are some very good reasons for investing in IIoT solutions.
More than half (55 percent) of the manufacturers surveyed said the technology offered an opportunity to improve profitability by at least 10 percent. Thirty-one percent said they expected their IIoT investments in automation to yield the biggest return on investment.
The IIoT is also having an impact on how IT departments engage with other business units. Effective deployments require teamwork between operations, engineering, and of course, IT departments, concluded Emerson.
“Technology teams will be the first to tell you: Operations needs to be front and center for technology plans designed to deliver operational improvements. Close collaboration between information technology and operations technology is key to successful implementation of Industrial IoT projects that meet clear business goals,” added Train.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.