Why do Industrial Equipment Manufacturers Struggle with Business Transformation?
Industrial OEMs (Original Equipment Manufacturers) and Enterprises are feeling the pressure to deliver smarter products and capabilities faster than ever. More and more, these capabilities are built on a foundation of intricate industrial applications empowering connected equipment as a service.?
Emerging Opportunities?
The past decade for Industrial OEMs has seen a dramatic rise in the need for business transformation in order to enable revenue preservation and growth in the long term. The SaaS model, at the OEM or Distributor level (DSaaS), has become a prominent approach for organizations to sustain existing and acquire new untouched market share (Direct or Indirect). Many OEMs and enterprises of varying tier levels have realized this opportunity and have already started investing in this direction. Following this trend, GE Digital introduced GE Predix, Hitachi established Vantara, and Siemens developed Mindsphere, among others.?
But why do OEMs need an IoT Strategy??
Per McKinsey, industrial OEMs are in a highly productive period using IoT in Operational Optimization, Integrated Smart Systems, and Asset Performance Management, all with an Industrial IoT market value of USD 3 Trillion by 2030.?
To survive and thrive in this new era of industrial revolution, OEMs must start delivering smarter products or equipment that integrates the Internet of Things (IoT) to become future-ready and protect market share, leveraging the most value of device data to better assist clients and incorporate new product innovations. With insights into how your equipment performs and how warranty costs occur, you can effectively control the Operational Expenditure (OpEx). But that isn’t all.?
The value of smart equipment goes beyond cost control and asset management. For Industrial OEMs, the core competencies are steadily shifting from hardware-centric to software-led services. With soaring global competition and increasing ROI expectations, new benchmarks are fading rapidly.??
Industrial IoT and Enterprise Domain Cloud open the door to offering newer revenue streams that bring recurring cash flow than a traditional single-time purchase model. These digital services may range from asset performance monitoring, asset remote monitoring, and field Ops to advanced business models such as Equipment-as-a-Service.?
OEMs’ Adoption Challenge?
In the McKinsey B2B IoT Survey , more than 90% of respondents revealed difficulty in incorporating all six components (connectivity, integration, cybersecurity, interoperability, confidentiality, and device (AI/ML) intelligence) of seamless IoT Adoption.?
CXO-level Challenges?
Developing a strategy for Business Model Transition through IoT is complex, and executing it is even harder. Building bespoke applications on your own can backfire, leading many CXOs or Decision Makers at Global OEMs to look for a trusted technology partner that can accelerate the development of scalable and reliable IoT services.?
Industry Pain Points
Many OEMs & Enterprises face significant challenges in making this happen. Even if they already have edge IoT data in hand, their goals of delivering applications such as Remote Monitoring, Predictive Maintenance, Field Service Applications, and Smart Products are blocked. Why? Because the underlying technology is complex and requires a lot of specialty skills, time, budget – and risk. The rise in level of complexity with each consecutive phase of application development yields a higher chance of failure at initiation.?
If an OEM does not take action today, it’s inevitable that their competitors will— and much faster. Both the risks of not taking action and the benefits of Business Transformation are Too Big to Ignore.?
Should you Buy or Build an IoT Platform? And Why Just One Isn’t Sufficient??
Despite the benefits of conventional methods to develop smart industrial applications (In-house Development and IoT Platforms), they eventually lead to a buyer’s regret for OEMs. Pick any of the approaches, and you will get a partial resolve for core challenges in the technology adoption.?Let’s understand this one by one.?
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An IoT Platform: It provides you with faster time to market and proves to be cost-effective. However, it locks you in a single environment with limited flexibility and misfitting customization (a one-size-fits-all approach). ?
In-house Development: Conversely, the in-house development approach gives you flexibility and customization per your business needs, but it eventually leads to a dead-end with gigantic CapEx, slower TTM, skill shortage, and bleeding ROI.?
Why is it high time to consider an alternative methodology??
Beyond Gartner’s hype cycle for emerging trends in 2023 , OEMs today are ready to implement the IoT and AI/ML technologies and are on the verge of decision-making for the right methodology and technology partner.?
The availability of an alternative that provides the best of buy and build is no longer a concept and has become a reality with an OEM Enterprise Domain Cloud (OEDC). ?
This approach allows OEMs to start on top of pre-built microservices at advanced progress (83%) and invest purely in the remaining development of Core Business Logic (17%) to gain an 830% ROI.??
Multiple dimensions of new value and flexibility for OEMs?
An OEDC platform enables OEMs to build Enterprise-grade Applications such as APM, ARM, Field Ops, and more via an enterprise-fit ecosystem to deliver smarter products in a time and cost-contained workflow. It solves major challenges faced by different professional verticals (Product, Operations, Engineering, & Business) at an OEM. It allows OEMs to focus on building new customer value and avoid spending valuable time on IoT Stack Technology.?
Outcomes that our global OEM clients achieved with the solution?
How does IoT83 make a difference??
IoT83 is the only product technology company enabling global organizations to adapt to the business transformation through its OEM Enterprise Domain Cloud Platform (OEDC), going beyond the near-term “save money approach” to “solution ownership,” resulting in a truly Connected Business Model to become Future-ready.?
Our pragmatic approach empowers OEMs to start at 83% of project progress, enabling faster time to market by allowing them to focus only on the remaining 17% of core application logic, enabling smart product lines through first-class and uniquely specialized applications like Asset Performance Management (APM), Field Ops, Asset Remote Monitoring (ARM), and Subscription-based Equipment-as-a-Service Model.?
Our platform, Flex83 , with its OEDC recipe and a stateside thought leadership backed by a seasoned product quality-centric development team, yields groundbreaking industrial solutions with complete Application Ownership, Control on Unit Economies, Zero Technical Debt & Vendor Dependency, Risk Management, and Business continuity.?
Headquartered in the United States and with an Offshore Development Center in India, we are a team of experts assisting global clients in leveraging the full potential of Industrial IoT by enabling an interconnected digital ecosystem to deliver smarter products.?
To learn more, visit https://www.iot83.com/ ?
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8 个月This is an interesting perspective on the challenges and opportunities for Global Industrial OEMs. I agree that leveraging the Enterprise Domain Cloud Platform could be a game-changer for essential Business Transformation. It's crucial for OEMs to adapt to the evolving landscape of industrial applications, and this approach seems promising.