This article first appeared in the Summer 2016 issue of The Record.
We’re quickly heading towards a world where almost any action or condition from any type of device or source can be sensed and the resulting data generated can be stored, analysed, shared and then acted upon. This encapsulates how many people, myself included, imagine what the internet of things (IoT) will help to deliver, especially when combined with advances in other fast developing areas such as business intelligence and analytics. The lines between these historically separate disciplines are blurring all the time. Hype is moving towards reality.
Advances in technology combined with new partnerships and offerings from solution and service suppliers are now presenting two distinct opportunities for organisations in industries of all types to reimagine what they do and how they do it.
The first opportunity impacts the way businesses operate in respect of their core day-to-day activities, i.e. producing their distinct ‘product’, whatever that may be. All successful companies look to improve routinely. The reality is the scope of what they can truly achieve is defined by the level of understanding and associated data they have about the way their business really operates at both a macro and micro level.
It is now becoming technically possible and economically viable to understand at previously unimaginable levels of detail and precision exactly how a business is performing, encapsulating all the aspects that need to work together in order to make it function (i.e. the people, assets, processes and all manner of inputs and outputs). This is transforming the way management teams can run their operations and drive continuous improvement, innovation and operational excellence throughout their organisations.
Just as the Japanese manufacturing industry pioneered many of the now commonplace aspects of quality management with the Kaizan concept and statistical analysis after the second world war, the onward drive to ever great levels of industrial efficiency and operational excellence will be founded on the new levels of data accessibility and operational insight that the IoT promises. This is an evolution, not a revolution. Many companies have successfully been on this path for years, understanding that data is a critical corporate asset and then with this mindset managing and exploiting it for business advantage.
The path towards IoT means the scale of this exploitation of data will grow massively in coming years, simply because it works and has been proven to deliver commercial value time and again. This principle is tried and tested. Businesses that will win in their markets and grow will be those that take advantage of this opportunity earliest and put it to work for their competitive benefit.
The second opportunity is impacting how customers consume and manufacturers, equipment and service suppliers provide the various products and services that have traditionally defined the relationship between these parties. For example, the ability for traditional product manufacturers to now transform to become service providers, whereby the commercial relationship is defined by metrics such as the uptime and the service level provided by equipment and is then paid for based on this is now a more than viable business model.
This is being driven by IoT and the ability to monitor and collect data to support these sorts of scenarios on both sides. This is a win-win for both consumers and suppliers. Businesses that consume will in principle only pay for the service they receive and can avoid the complexity and issues involved in owning assets and all the related headaches that go along with this such as maintenance and servicing. For suppliers this creates a huge opportunity for differentiation, not just competing on product features and functions alone, but instead broadening their offer to exploit their product and industry expertise and the related services and service levels that they can provide and their customers demand.
The connections between industry and the customers they support will themselves transform and look very different as the IoT continues to evolve and mature. This is something to embrace and exploit. Those that don’t will find it increasingly hard to compete with those that do.
Mark Peterson is the director of marketing for EMEA at OSIsoft
Share this story