The industrial internet of things (IIoT) promises a lot about how it can help manufacturers. Streamlining the supply chain, allowing skilled staff to extend their range virtually, and providing deep insight into the inner workings of your factory. But how is the industry really doing in its adoption of these promises?
NelsonHall has launched a new study entitled IoT Services: Continued Focus on Use Cases, which provides a reality check on the adoption of IoT by focusing on IoT project implementations.
According to the study, most large organizations are focusing on incremental changes, and aim to:
Improve Operations
For example, across sectors, around smart buildings, or in functions such as manufacturing and the supply chain and to improve efficiencies.
Enhance Existing Offerings
For example, to guarantee equipment availability to clients or create aftermarket services.
The most popular use cases are found in B2B, and include connected fleets, digital manufacturing/Industry 4.0, and the supply chain. In parallel, most organizations that formerly targeted B2B are now shifting to B2BC use cases.
NelsonHall found very little evidence of large organizations aiming to reinvent their business model drastically, confirming that creating a new business model to disrupt an organization is not easily achieved by large enterprises. And currently, organizations are focusing on making their IoT use case implementation a success, with IT considerations being less important.
Another key finding in the study is around IoT platforms/applications. A third of consulting and IT service vendors have created their own IoT platforms, mostly based on reusing code and on open source software components. Vendors initiated these developments four to five years ago, when the range of IoT COTS in the market was not as comprehensive as it is now.
However, in the next five years, IT service vendors will have to transition their IoT proprietary platforms business to a different model, where their products will complement those of IoT platform COTS. This transition will be necessary, as technology vendors with high product development capability (and internal funding) will develop more comprehensive IoT platforms.
Also, IT service vendors will need to define use cases based on IoT platforms more clearly, offer a product experience to their clients, and define where they will provide a blueprint and accelerator experience.
Along with this change, NelsonHall is expecting that most proprietary IoT applications developed by consulting and IT service vendors will move their use case development strategy from a mix of project-led and product-led to more project-led (i.e. developing use features and functionality based on client project needs rather than upfront development). This change will occur largely because IoT use case requirements are still moving and very client-specific, with only major technology vendors affording the R&D expense.
There’s one factor in the IIoT conversation that nobody seems to be talking about: When a company adopts a software ecosystem, such as a PLM or ERP system and integrates their business into that platform, it often becomes extremely difficult or unfeasible to move away from that software in the future.
Do you have concerns about your business marrying itself to a software platform without considering the long-term implications? Share them in the comments below, or tweet to me at @engcom_automate.