Most enterprises have already implemented technologies such as instrumentation, monitoring and data acquisition (SCADA), asset management, or computerized maintenance management systems to provide near real-time process and operational visibility. So, what value will the Internet of Things (IoT) add to existing technology investments? Generally, the benefits of IoT can be categorized into the following six types:
1. The "Democratization" of Analysis
In the past, organizations had to conduct their own analytics—spending time and money developing and testing their own algorithms. However, the interconnectivity standards of IoT mean the birth of a new market: pre-built analytics engines that provide low-cost, plug-and-play access to analytics for monitoring specific types of markets, facilities, and asset classes. By democratizing analytics—making it accessible to everyone, not just organizations capable of doing it themselves—IoT is disrupting the traditional consulting and custom software market.
2. New business opportunities
Market research firm Forrester believes that only 27% of B2B companies have a coherent strategy for adding value through digital transformation; however, a Gartner survey shows that CEOs expect revenue from digital services to grow by more than 80% by 2020.
IDC explains this difference by predicting the emergence of a digital transformation economy. Similar to the dot-com revolution of the late 1990s and early 2000s, the digital transformation economy will create new opportunities. Gartner describes these emerging areas as "algorithmic" and "programmable" products and services, such as democratized analytics engines, cloud computing, artificial intelligence, and smart utility networks.
Traditional industries will also benefit from using IoT to collect customer feedback and usage data for forward-looking innovation research, discovering and providing new value to customers. For example, McKinsey & Company has advised Tesla to view its terabytes of vehicle data as an "Internet of Things on wheels." Tesla can use this information to continuously improve the driver experience and provide insights for future development, from maintenance and improvements to Autopilot to entirely new features. In other words, every mile a Tesla car travels helps identify the next product or service that must be offered.
3. Safer and more efficient work
The Internet of Things (IoT) will transform the entire workplace. It will create new jobs, new tasks, and new skills that people must acquire. Digital literacy and data analytics will become increasingly important.
The Internet of Things (IoT) will also improve workplace safety. IoT-connected sensors will help monitor enclosed and hazardous locations and processes, keeping people away from danger. Then, over time, correlating sensor and environmental data can yield new information to better understand past events and mitigate future risks.
IoT also creates new ways for employees to collaborate in teams. Now, many people can receive work-related notifications via their mobile phones, quickly determine the best response, and delegate actions to the right people with the touch of a button.
Furthermore, IoT helps businesses improve overall productivity. Just as robots eliminate repetitive physical tasks, IoT's "cognitive outsourcing" enables computers to handle mundane or repetitive tasks, allowing employees to spend more time finding operational information rather than collecting, transforming, and processing data. The implementation of IoT also helps bridge the generation gap between new and veteran employees. Some analysts also predict that collaborating with new data in new ways will help reduce unproductive meetings, allowing more time to focus on new avenues to help functions deliver the best possible products.
IoT collects data from all types of devices to monitor all key statistics for each asset, thus providing visibility into asset performance.
4. Process and behavior monitoring
In consumer-facing markets, IoT-enabled behavioral tracking is practically synonymous with real-time marketing; however, various industries also benefit from tracking the behavior of people and processes. As discussed earlier, IoT customer feedback and data usage provide insights into customer preferences, enabling traditional industries to develop new business opportunities.
Behavioral tracking enables businesses to improve employee efficiency and productivity. Analysts predict that near real-time data on injuries, illnesses, absences, hazards, and accidents enabled by the Internet of Things will make the identification and isolation of health, safety, and environmental issues more timely and effective.
When quality issues or anomalies inevitably occur, tracking personnel and processes can provide the traceability and operational accountability needed to conduct root cause analysis and determine appropriate solutions.
5. Process and resource optimization
Among the much-touted advantages of IoT, the big data analytics that enable IoT offer a variety of new ways to improve operational efficiency and help businesses increase profits. Traditionally, data from enterprise resource planning, product lifecycle management, manufacturing execution, and supplier relationship management systems have been isolated from each other. By unifying this data, IoT can coordinate factory operations and improve load forecasting and production scheduling.
IoT can also monitor quality in real time. Imagine identifying defective parts before processing individual items or batches, and automatically adjusting machines or processes accordingly to improve quality, increase efficiency, and reduce waste.
Combining energy consumption rates with IoT-connected energy metering and process data also helps control energy expenditures. This information can be used to identify cost-effective equipment upgrade opportunities and reduce waste generation.
Imagine how efficient this process would be if all this downstream fluid and pressure data were connected via IoT. At the same production rate, by rigorously comparing current and historical current values to obtain relevant information, maintenance technicians could directly receive work orders to replace leaking valves, instead of receiving low-load alarms for pump motors.
IoT solutions also allow for the confirmation of valve availability before work is assigned and scheduled—and, if not, confirmation of ordering. Beyond detecting impending maintenance issues, IoT-enabled predictive maintenance eliminates ineffective preventative maintenance plans, minimizes maintenance costs, and improves equipment reliability and availability, thereby freeing up additional capacity while reducing production costs.
6. Better decision-making
By breaking down barriers between data, IoT enhances situational awareness, analytics, and insights, enabling faster, smarter decision-making and greater operational benefits.
Currently, many business case analyses and purchases are triggered by sampling or average prices and break-even thresholds. IoT-enabled rapid cost systems are disrupting this: they receive time-based price signals, update analytics, analyze trade-offs, and select the best response.
IoT can also enhance situational awareness. These advanced analytics solutions, sometimes referred to as cyber-physical production systems or the convergence of information and operational technologies, provide a higher level of visibility and control over complex systems.
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