Here’s how manufacturing companies can overcome the next hurdle in IoT adoption

Predictive maintenance, quality control and energy efficiency are some of the most cited use cases for the Internet of Things in manufacturing companies. In one of my previous articles I discussed the benefits of what we call the Industrial Internet of Things (IIoT). However, we notice that in reality – despite the clear business benefits – many manufacturers are falling behind on the IIoT innovation curve, mostly because investments remain locked within a single department. So how should industrial companies move forward when leveraging their IIoT investments?

Untapped potential

McKinsey predicts that by 2025 the overall economic impact of the IoT could reach 11.1 trillion dollars. According to Vodafone, one third of companies use IoT solutions to optimise processes, reduce operating costs, improve data collection, create new revenue streams or increase revenue from existing ones. Predictive maintenance is still considered one of the most compelling areas of investment. By embedding sensors in equipment, organisations can collect detailed and reliable status data, preventing equipment downtime and improving worker safety. Looking forward, an increasing number of manufacturers firmly believes in the potential of the IIoT to disrupt their business model. This technology allows manufacturing companies to shift towards more ‘product-as-a-service’ models, where they offer their customers leasing options while automatically providing maintenance, repairs and upgrades.

A rocky road to adoption

The potential of these solutions is huge, and with 5G as an additional accelerator of innovation, the future looks bright for manufacturing companies. However, concerns about cost, security and scaling issues may have dampened some manufacturers’ enthusiasm about the IoT. Not only device purchasing, installation and maintenance, but also network subscriptions and roaming charges have made it difficult to see a quick ROI. Luckily, we are seeing a rise in new and less expensive IoT devices this year, as well as more affordable installation, maintenance and network options (especially low-power wide area networks), which are expected to expand as well. This trend opens the door to a level playing field between big and smaller enterprises to equally benefit from scalable IoT solutions.

But cost is only one blocking factor. Security remains a second major concern, which is not surprising given the more than 100 million attacks in the first half of 2019 alone. New research by Unit42 revealed that 57% of IoT devices are vulnerable to medium- or high-severity attacks, making IoT the low-hanging fruit for attackers. Even more disturbing: 98% of all IoT device traffic is unencrypted, exposing personal and confidential data on the network. It is clear that IoT security will become paramount in order to ensure its further adoption. Understanding end-points, tracking and managing devices and identifying what IT security cannot address are the first three crucial steps on which to take action.

Overcoming IoT implementation challenges

To truly take advantage of IoT’s benefits, it must be adopted on a large scale. If not, a business case is not guaranteed. Furthermore, large data volumes are also crucial for AI and machine learning applications, to allow them to deliver accurate and insightful results for better decision-making. To better scale IoT investments, it is important to collaborate both internally and externally. Internally, IT and business departments must be aligned around one single step-by-step approach – including a transparent process – with short and long term objectives. From an external perspective, organisations can benefit from building an ecosystem of well-chosen partners based on their pursued business objectives.

Secondly, manufacturers must make sure that IT is able to connect via a solid digital production platform and that the best possible integration platform is in place, supporting predictive analytics and machine learning. And finally, they need to invest in talent. New business model may require new skills. Large-scale IoT adoption may also require organisations to review their operating model, so you need leadership in place that is capable of navigating the company through all potential pitfalls.

Personally, I am very curious to discover how these IoT trends will further boost IoT adoption in the coming months and years. In conjunction with 5G, AI, machine learning and edge computing, the future of IoT as a disrupting force in manufacturing looks even more promising. Is your organisation preparing to scale its IoT efforts?