Industrial companies need to capitalise on the industrial internet of things (IoT) to offer customers integrated digital services and products, and thus increase revenue, according to a new Accenture report.
Combining sensor-driven computing, industrial analytics and intelligent machine applications into a single platform of connected products, processes and services, the industrial IoT generates the data companies need to develop efficient operating strategies.
In his Defining and sizing the Industrial Internet report, David Floyer predicts that global investment in the industrial IoT is predicted to reach US$500 billion by 2020, marking a 2,400% increase from the US$20 billion spent in 2012. Meanwhile, Deutsche Bank’s Industry 4.0: Huge potential for value creation waiting to be tapped study indicated that companies introducing automation and more flexible production techniques to manufacturing operations are able to boost productivity by as much as 30%.
According to Accenture’s Driving Unconventional Growth through the Industrial Internet of Things report, while many companies already supplement their products with services, they need to capitalise on the industrial IoT to boost revenue, increase production and create new hybrid business models.
The report indicated that while many manufacturers are already investing heavily in digital services to increase production, these same companies are also improving their own solutions to enhance the performance of existing assets and processes across the entire supply chain. These product-service hybrid models connect intelligent physical assets, which are able to produce the data needed for digital services, with product sales and leasing functions. This enables resource-extraction firms, such as mining or oil companies, and process industries, including food or chemical manufacturers, to enhance visibility along the value chain, increase productivity and improve decision making processes.
“Industrial companies have long supplemented their product revenues with services,” said Paul Daugherty, CTO at Accenture. “But innovators – companies that understand that every business is a digital business – are using this technology to create product-service hybrids that provide new growth opportunities and pave the way for pioneering the next generation of industrial products.”
The report also highlighted that as manufacturers begin to build more smart machines, they will develop accompanying applications that will become vehicles for driving new revenue streams. To create these new monetisation opportunities, companies must exploit sensor-driven computing, industrial analytics and intelligent machine applications and combine enterprise and machine-generated data.
By digitising certain tasks and workflow, particularly repetitive jobs, the industrial IoT will also force manufacturing companies to find employees with data science, software development, hardware engineering, testing, operations, marketing and sales skills. They will also need to ensure that their employees can develop new service sectors that support the diverse users of industrial products and services.
“Business customers will always need products and services that create more value for them,” said Daugherty. “For example, Michelin Group is using sensors inside tires that, combined with analytics, can coach truck fleet drivers on how to save fuel. Daimler, the carmaker, has created a rental service called Car2Go that forgoes the typical centralised rental office in favour of a downloadable smartphone app that allows users to access cars directly wherever they are parked.
He added: “For those companies looking to build a more innovative mousetrap – a new product-service hybrid that will completely revolutionise their company or industry – now is the time to harness the emerging industrial IoT to identify new growth opportunities and, with the right vision and leadership, turn them into reality.”
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