The industry also faces the challenge of skills shortage. A survey conducted by the Global Energy Talent Index (GETI) found that nearly 70% of Oil and Gas professionals think the industry is already facing skills shortage or will be hit by it within the next 5 years. This is due to a number of reasons, including a reluctance of younger professionals to commit to a profession that has harsher conditions than many. Moreover, as energy transition becomes a topic of global discussion, many have a perception that the industry is not sustainable in the future. The industry also goes through cycles where they cut back on exploration and production, which results in the loss of skills and inadequate knowledge transfer. It has a long-term challenge around knowledge management.
Safety and environmental regulations
The industry has to contend with green energy movements and environmental regulations. There are several country-level regulations around air and water quality. Most Oil and Gas companies have cross-border operations and have to comply with a number of regulations on harmful emissions, greenhouse gases and offshore activities, in several countries. Increasingly, all leading Oil and Gas companies have to work in alignment with the Paris Agreement when developing solutions across functions – exploration, extraction and supply chain. There are also worker safety regulations and standards that they have to comply with.
The global Ecosystm AI study reveals the top priorities for Oil and Gas companies that are focused on adopting emerging technologies (Figure 1). It is very clear that the key areas of focus are process automation, asset and supply chain management and compliance.
Technology as an Enabler of Oil and Gas Transformation
Several emerging technologies are being used by the Oil and Gas industry as they continue their struggle to remain competitive across the different stages of operations – upstream, midstream and downstream.
As the costs of sensors go down, connectivity widens and computing power increases, the industry is seeing greater uptake of Industrial IoT (IIoT) solutions. From wearables (to monitor employee safety) to drones with smart cameras (for remote inspections, environmental monitoring), IoT solutions have an immense role to play in the Oil and Gas industry. The industry has had to be cautious about the choice of devices, however, due to pervasive inflammable hydrocarbons and the related regulations.
Not only are they implementing sensors, Ecosystm research finds that 30% of Oil and Gas companies are also leveraging the IoT sensor data for analytics and intelligence. A common application is in predictive maintenance. Two years ago, Chevron launched predictive maintenance solutions in its oil fields and refineries. While the pilot ran on heat exchangers, the company aims to connect all assets by 2024 and expects to save millions on asset management.
AI and machine learning have applications across Oil and Gas operations, leveraging IoT sensor data. “Smart fields” where production is monitored centrally, has a high level of automated controls. AI/Analytics is allowing companies to run simulations, use predictive data models and identify patterns to gauge risks associated with new projects. This has an impact on production, exploration and making efficient use of existing infrastructure. Oilfield services company Baker Hughes has worked on an AI-based application that allows well operators to view real-time production data and predict future production with more accuracy.
While the applications of AI in the industry are often focused on upstream activities, AI has applications across all operations. In the midstream, transporting crude oil to refineries has always had its unique challenges. Since transport lead times are long and prices fluctuate based on the availability of products, organisations benefit from demand forecasting and price risk modelling. While the common perception of the industry does not include customer interactions, the truth is that the industry is increasingly focusing on the retail space. The need is enough for Shell to begin experimenting with virtual assistants as far back as in 2015, to interact with their retail customers. In fact, the company anticipates a higher adoption of AI in the industry and is collaborating with Udacity to bridge the skills gap.
Technologies empowering employees
As discussed earlier, one of the key challenges of the industry is the inability to manage a reliable knowledge management system that can help consistent knowledge and skills transfer. A single source of truth that can be accessed by all employees on processes, including safety requirements has an immense role to play to help with the skills shortage in the industry.
Enterprise mobility is another tech area that holds immense potential for the industry, with its huge proportion of mobile workers, many in remote locations. Mobility solutions can help in productivity, process optimisation and monitoring of health and safety of the employees and are increasingly incorporating wearables and location-based services. GIS and GPS systems are helping employees with accurate directions, easier access to drilling locations and more. Given the number of devices, platforms and OSs, the industry is seeing an increased interest in unified enterprise mobility (UEM) solutions. Ecosystm finds that more than a third of Oil and Gas companies have implemented or are evaluating UEM, while another 20% are expressing early interests.
The sheer quantity of documents, transaction records and contracts that a typical Oil and Gas company has to manage – including cross-border transactions – poses some difficulty for the industry. The companies have to reconcile and handle issues involving multiple contractors, sub-contractors, and suppliers. Supply chain and inventory management is also a challenge. With the adoption of Blockchain, the industry can automate the management of purchase orders, change orders, receipts, and other trade-related documentation, as well as inventory data with more efficiency and transparency. Blockchain is enabling a seamless supply chain, improved project management and simplifying contractual obligations at each point along the way. Gazprom Neft’s aviation refuelling business is an early adopter of Blockchain-based smart contracts. All refuelling operations are undertaken exclusively on the basis of digital contracts approved by both parties near real-time and eliminates the possibility of any breach of contract and makes the accounting process more transparent.
As the market continues to be volatile for Oil and Gas companies and uncertainties loom in the future, the industry will increasingly depend on technology to remain competitive.
For more insights on industry adoption of emerging technologies such as AI and IoT, please create your account on the Ecosystm platform.
This week I attended ServiceChannel’s ServiceX19 customer event in Scottsdale, Arizona where 300 ServiceChannel customers were treated to an update on the current and future state of FM. Annually, ServiceChannel’s customers raise over 100 million work orders, across 330,000 locations, fulfilled by 50,000 contractors in 75 countries. Equally impressive is that these customers are responsible for over $37 Billion spend on keeping building clean, bathrooms working, air conditioners heating and chilling, refrigerators cooling, lights switch on and so on.
Through their Facility Management Platform, which behaves like an online market place for their customers, ServiceChannel is rapidly becoming a valuable analytics and data management software company. Work orders are an incredible source of information for every asset connected into a building that requires any level of service. Just like State Farm Insurance who ‘know a thing or two, because we’ve seen a thing or two’, ServiceChannel have seen ‘a thing or two’ such as work orders to deal with alligators and of course cars crashed into shop fronts! However, some examples of more traditional analytics use cases include the following:
Predictive repairs on capital intensive equipment is being decided by the facilities manager before the original equipment manufacturer.
By using ServiceChannel’s comprehensive data visualisation capability, facilities managers have the ability to identify measure the difference between spending on preventative maintenance versus post failure repair.
Individual service fulfillment analysis can often show that engaging with the least expensive hourly rated contractor may not always provide the best outcomes.
Over time ServiceChannel’s data collection and analytics is enabling their customers to have visibility into their businesses that go beyond FM. ServiceChannel is enabling their customers to become more digital and creating higher value business outcomes. While IT and equipment manufacturers have tried to create digital ecosystems and attract participants into their network, they are still one step removed from the customer. This gap means that they are not truly able to help manage the customer experience within smart buildings. Rather, companies like Service Channel have access to the heterogeneous asset environments by working directly with facility managers. During the conference, I saw service records comparing the major HVAC vendors within a large retailer and immediately thought that individual HVAC vendors would be very interested to see how they stacked up against each other. The ServiceChannel connected asset analysis gives their customers the information that enables discussions based on transparency, trust and truth – which is a powerful negotiating tool.
The event showed a reality state of the IoT associated with analytics in an industry that is reinventing itself through enabled assets connected to their work flow systems. It clearly showed that the Smart Buildings industry is probably about 2 years behind the roadmap set out by the major IT research firms. Businesses are now beginning to understand what IoT is even if they do not call it by that name. Connected assets are becoming more familiar and the value from analytics is being realised to run businesses. Customer experience is now a tangible metric!
Separately, as ServiceChannel’s analytics engine matures and external data sources such a weather and environmental conditions are curated with asset management, then facility managers become more valuable to the CFO, the CIO and the customers they serve. To date equipment vendors’ attempts to build ecosystems of IoT-based partners has been met with limited success because they are still not close enough to the end customer. Original equipment vendors should make their products connected to an IoT infrastructure network as easily and as quickly as possible and then partner with companies like ServiceChannel who can curate and promote their asset data.
I had the pleasure of attending the Industry of Things World 2019 in Berlin. Berlin has always fascinated me by its contradictory image – of modernity and traditionality. Their admired industrial companies can be conservative in terms of innovation and move slowly when adopting new technologies. However, once they decide to move, they move all at once and cause a significant change in the industry. And that is what I perceived at the event.
In Berlin, companies know what Industrial IoT (IIoT) is and IIoT solution providers’ efforts focus on how to implement IIoT. The level of adoption in the DACH and Nordic regions is higher than in other European regions but still remains low, especially in small and medium enterprises (SMEs).
The first thing that was highlighted at the event is that AI has not devoured IoT. Organisers do not try to fill auditoriums and beat attendee figure records with other parallel events of AI, Blockchain, AR/VR, 5G, DevOps and so on.
It was interesting to listen to both tech buyers and vendors sharing their news and vision – clients such as Rolls Royce and thyssenkrupp sharing their implementation experiences and giving recommendations on how to succeed in IIoT projects and; IIoT vendors such as Cumulocity IoT, HPE, AWS, Siemens or Huawei presenting their capabilities. All of them are clear that IIoT must be part of a new paradigm of business systems integration.
In the several round tables that I attended, the ideas and conclusions presented were very educative. It was good to listen to the main actors (the actual companies implementing IIoT) talking about their challenges, requirements, solutions and desires. Most of the CEOs are in consensus on their priorities in IIoT investments: ROI, Performance and Quality.
I validated with organisations the results of the Ecosystm IoT study regarding their vendor selection criteria for IoT projects. This ties back to their IIoT investment priorities. They are likelier to choose vendors that can deliver on all 3 of their priorities.
The most realistic statement about IIoT came from the HPE speaker, “Don’t look for disruptive companies like Uber in the Industrial Internet of Things market.” Here the new business models will take time to emerge. Other exhibitors and visitors, that I had conversations with, agreed with this idea.
Fortunately for the IIoT market in Germany and Europe at large, China continues to adopt these technologies at a similarly slow pace. Although China may be more advanced in digitalisation (in ePayments for example), when it comes to IIoT, they are as conservative as Europe. This gives us a window of opportunity to continue to evolve our offerings, in the region.
Another recurrent theme through the event was the inability and hesitance of the CEOs/ CFOs/ Boards to understand the potential of data-based collaboration between companies and industries and how they continue to kill any data sharing/open data initiatives. Walled gardens should not be a medium-term objective.
I had some conversation on IoT connectivity with LumenRadio, SigFox and Multefire However the session discussing the impact and need for 5G in IoT was shallow because the speakers only covered high level use cases and benefits of 5G and how the German government is working on security requirements for end-to-end 5G services.
Finally, it was great to hear people talking about IoT lifecycle management. It has become clear that IoT is real and is here to stay. Some companies have already passed the Proof of Concept stage. This reassures us that IoT is not just ideas, development and pilots. IoT projects are going beyond and thinking about operations and maintenance.
Congratulations to all nominees in the first Industry of Things World Award ceremony. The winners were Fette Compacting in the category, Best Implementation of IIoT Technology on the shop floor and BAM GmbH up2parts in the category, Best IIoT Product or Service.
One final observation on the event is the disparity in the number of men and women attending. I got the impression that not many women are involved in IIoT or at least they do not attend events such as this. I hope that skills training and the market potential will attract more women to this industry in the future.
So dear friends, contacts, followers and readers: in short, the event was a positive experience and I hope to see some medium-term outcomes in
Why are we still at a loss with IoT? Let´s explore.
Lost in IoT Connectivity
With so many IoT connectivity options in the market, choosing the right one for your project can be complicated. It is a scary thought that billions of devices could be connected in a few years to decentralised IoT networks, with no interconnectivity between them, unless we use millions of edge nodes that transfer messages between devices connected in multiple networks. If it is already difficult to justify the ROI of a use case using a single type of connectivity – it is almost impossible to justify that these devices will need to communicate with other devices on different IoT subnets.
It seems that it is easy to get lost in so much connectivity technology. Isn’t that true?
Lost among hundreds of IoT Platforms
At least we can already intuit some of the platforms that will survive among the 700+ that some analysts have identified. I have only been able to analyse about 100 of them in some depth. Surely my methodology of Superheroes and Supervillains will advance the end of most of them.
It is no longer just one IoT Platform. Although they want to make it easy for us, companies like AWS, Microsoft or Google add concepts such as Serverless, Data Lakes, AI, Edge Computing, DLT and all the artillery of Cloud services to the core features of the IoT platform. It is easy to get lost in the architecture.
Data from the global Ecosystm IoT Study shows this confusion in selecting the right platform for future adopters of IoT. Same organisations indicate that they will use or at least evaluate several platforms.
Initiatives such as Verizon’s focus on connectivity and systems integrators abandoning their in-house developments to embrace leading vendors’ offerings, will reduce some of the confusion around IoT platforms.
The Babel tower of alliance and consortia is consolidating, but people still get lost in the acronyms. News such as the merging of the Industrial Internet Consortium (IIC) and the OpenFog Consortium (OpenFog) to combine the two largest and most influential international consortia in Industrial IoT, fog and edge computing, has been hailed by many. The Open Group Open Process Automation Forum (OPAF) is defining the next generation edge computing standards for industrial operators.
And again, the question arises, do all organisations need Edge to start an Industrial IoT project?
Lost in Proofs of Concept
Businesses are estimated to be spending USD 426 Billion worldwide on IoT hardware and software in 2019 alone. Yet, three out of every four IoT implementations are reported to be failing.
Microsoft launched a new research report – IoT Signals – intended to quantify enterprise IoT adoption around the world. The survey of over 3,000 IT team leaders and executives provides a detailed look at the burgeoning multi-billion-dollar segment’s greatest challenges and benefits, as well as related trends. Perhaps it is not surprising that 30% of respondents say their IoT projects failed in the proof-of-concept (PoC) stage, often because the implementation became too expensive or the bottom-line benefits were unclear.
There are technical reasons – for example the use of Rasberry Pi or Arduino boards in the PoC and then later realising that more expensive hardware is needed for the actual project. There are economic reasons when organisations try to escalate their PoC to real implementations and then the ROI does not look as good as in the pilot.
There are organisational reasons when leaders are failing to go all in. If you cannot get the CEO on board, then the probability that your IoT project will end at the PoC stage is almost 100%.
If you are lost in the PoC, these tipscan help you implementing IIOT.
Solve a problem worth solving
Keep it quick and simple
Manage the human factor
Lost in selecting the right IoT Ecosystem
Today no significant ecosystem or network of collaborators has emerged in the IoT arena in spite of early and very interesting efforts being made by several players. Since I wrote “The value of partnership in Industrial Internet of Things”, I have heard, read and repeated hundreds of times how important it is to belong to an IoT ecosystem and how difficult it is to choose the one that suits you best.
Those who have read my articles know that there is no company in the world, no matter how great it is, that can do everything in IoT. Creating an IoT ecosystem either horizontal (technology) or vertical (industry) requires a lot of talent managers able to maintain win-win transactions over time. And according to the results, it appears to me that it is becoming very complicated.
Remember, you are not the only at a loss with IoT
When it comes to achieving an ROI from IoT, businesses really need to rethink how they are deploying it and ensure that they can manage their sensors remotely, secure their assets, use the sensors and devices data to make better real-time decisions and monetise it. However, for that to happen and to prevent the IoT projects from failing, businesses need independent and expert advice at several levels to find the right people to lead the project and the right technology and partners to make implementations successful.
Much of the 2018-2019 efforts may be collated under three main categories.
Hardware. Establish a hardware foundation from which any IoT device or customer can reap the benefits of Cisco’s larger corporate strategy built around initiatives such as Cisco DNA Center, Intent Based Networking, ACI and Security. With the acquisition of Sentryo and the refresh and launch of their routers, Cisco is now well placed to have legitimate discussions with Industrial IoT or IIoT customers and prospects. Bringing IBN functions to the edge of the network will enable Cisco’s customers to begin to develop richer business outcomes from the network. Rating: A-
Developers: Raise the availability of IoT-based applications through Cisco’s DevNet developer community. Cisco has a significant advantage over their competitors by having over 500,000 developers who understand how to write apps for Cisco’s product line and who now have access to new types of data that can enrich traditional network outcomes. Over time this advantage will become more and more valuable as data becomes utilised across markets as well as within markets thus creating wealth in a much larger ecosystem. Rating: B+
Partners: Transform their partner management through the Customer Experience (CX) program. Much of Cisco’s business is conducted through partners. It is a critical success factor for Cisco to enable the partners to be IoT-data savy. IoT will enable Cisco to accelerate the transition from product sales to higher value subscription services. However, based on discussions with customers, partners and Cisco management, we believe that there is much more work to integrate an IoT strategy in to CX. Rating: B-
The Industrial IoT (IIoT) and Cisco
Cisco identified the IIoT market as one where Cisco’s strengths in hardware, software and partner ecosystem will play well with their customers and prospects. While having a strong foothold in the industrial space, we believe that Cisco’s success will be much dependent on the customer’s workloads and what they want to achieve with their data as it is reducing the complexity between IT and OT (Operations Technology) issues. Cisco has addressed the IoT connectivity and network security at the edge of the network through its ruggedized routers while their competitors are building distributed computing environments. Competitors who are adopting a full IT stack at the edge of the network aim to offer up more OT-based industrial services as well as emerging innovation services such as digital twin, augmented reality and robotic process automation. One key consequence of a customer choosing either approach will result in differing partner ecosystems to form and support the customer. These ecosystems will also be different in how they are managed and by who manages them.
Our recent IoT study shows that while security (a sweet spot for Cisco’s strategy) remains extremely important to an organisation’s solution, technology integration is equally important. When vendors are considering implementing an industrial solution, they need to be able to provide an end-to-end solution that encompasses both the IoT Edge and the IoT Enterprise while smoothly bringing together the OT and IT procedures.
This all starts with an easy on-boarding of any IoT device that is secured and managed with confidence and reliability. The good news for Cisco is that these challenges are also a natural opportunity for Cisco’s partner organisation and systems integrators by creating a new styled IoT ecosystem. However, despite which hardware path an end-user takes, we believe that Cisco and others do not have all of the necessary components of the full ‘IoT’ stack to fulfil a complete solution. To that end, everything will pivot to the vendor who either has the better systems integrations partnership, or, plays in the strongest ecosystem.
Most of Cisco’s business is driven through partners and therefore any success for Cisco’s IoT strategy is dependent on how well they execute it. IoT will accelerate the shift from product based solutions to subscription/as a Service deliverables as more information is generated from the connected devices. and as such the Cisco partner community should be trained/incentivised to offer up IoT. Cisco partners are already undergoing their own business transformation as Cisco’s Customer Experience (CX) strategy is introduced to them. Having the IoT hardware align with the broader Cisco vision was critical to enabling any CX IoT strategy. However, partners may be in ‘transformation’ overload as they embrace the traditional Cisco customer needs and requirements and may be slower to take up the IoT opportunities.
Our IoT study shows that customers believe that the transition from products to services innovation is the highest scoring benefit from an IoT implementation.
However, this is a difficult but critical part of any company aspiring to become a digitally driven business. An IoT strategy is a corner stone of this vision as it will provide the data to be able to run a services or subscription-based business model
Cisco is well positioned here but there is a maturity and readiness gap between Cisco and their customers. Patience will be a key asset as Cisco and their partners close technology gaps for their customers (e.g. adopting and implementing widespread analytics as part of the corporate digital strategy. Most customers are not ready to take advantage of IoT-based analytics outcomes and therefore the RoI case has not been fully articulated).
Finally, Cisco needs to address the mid-tier market with solutions that are compatible with budgets. While it is important to have an ecosystem of high calibre partners within systems integrators, we feel that there will be many customers who cannot afford Cisco’s end-to-end solution. As a result of this Cisco partners are still not ready to address the mid-tier market. Cisco will need to promote offerings across all markets by participating in high-, mid-, and low-end ecosystems. This may mean acknowledging non-5G licensed spectrum/ non WiFi solutions for the most cost sensitive customers for the sake of broader market and industry share.
Recommendations For Cisco IoT
The following are our recommended actions for Cisco IoT based on C-Scape and the prior 12 months of strategy rollout:
Create stronger value proposition for network based IoT business outcomes. Customers are asking for end-to-end validation which means that Cisco needs to articulate a role with the likes of Salesforce, SAP and Microsoft to enhance customer’s enterprise management systems. This is where Cisco’s CX and partner organisation will also be challenged but can open up a lot of opportunity. Move the message up the value chain. More work has to be done with CX. More has to be done with developers.
Articulate a stronger comprehensive Industry 4.0 solution that gives customers all of the application qualifiers to run on Cisco’s hardware. Cisco will be challenged by the IT-lead distributed IoT compute stack over its industrial strength routers. More marketing has to be invested in the IoT Edge campaigns.
Segment the IoT market by customer maturity/readiness/size and their IoT connected assets. Based on asset churn and customer size will dictate the type of new IoT ecosystem that Cisco will either build, manage or participate. For example, an IoT solution of Capex intensive assets with longevity is very different for agriculture supply chain management. Segmentation is critical for Cisco to be successful.
Internet of Things (IoT) is changing how companies do business, across industries. Using connected sensors, better data processing capabilities and automation, industries are looking to achieve workforce optimisation, improved customer experience, and cost savings in the short term. In the long-term organisations are looking for service and product innovation, as well as a competitive edge from their IoT investments.
In the global Ecosystm IoT study, participants revealed the IoT solutions that are part of their larger IoT deployment projects. Here are the top 5 solutions that industries are implementing, and how they are benefitting from them.
Smart Security is being adopted in several enterprises, especially in the Financial and Hospitality industries. Aside from improved safety, Smart Security solutions have the potential to deliver more personalised service and better customer experience (CX).
Maintaining security for the guests is one of the top concerns for hotels and smart video surveillance systems, motion detection, audio detection, and alert systems are helping hotels to identify possible threats and get early alerts on potential events.
Hotel chains Hilton and Marriott are leveraging Smart Security IoT solutions to create better travel and stay experiences for guests. They are working on creating enhanced security for their visitors by replacing card-based door keys. Simultaneously, smartphone applications connected with hotel sensors and devices are offering a seamless experience to guests with automated room settings such as HVAC, lighting, and blinds.
The Banking industry is incorporating Smart Security as well. Banking and financial institutions attract criminals for obvious reasons and to improve security, smart CCTV surveillance, wedge barriers, laser scanner detectors, light barriers, and quick folding gates are embedded with sensors and connected to safeguard against potential attacks. IoT-enabled network security measures to provide intelligent Perimeter Security is also seeing an uptake in the industry.
However, the proliferation of ubiquitous devices also leaves organisations vulnerable to data breaches. Digital and electronic devices incorporated into a hotel’s infrastructure can be exploited by hackers or may jeopardise the security of guests. The now-famous incident of the casino in the US that was hacked into through the IoT-enabled temperature control system in the fish tank is a case in point.
While Fingerprint Biometrics is often a part of a Smart Security solution, it is being used more often for asset management, as well as access control. This is fairly common in industries where multiple people fill a particular role, such as Manufacturing, Retail, and Healthcare. In hospitals, for example, multiple clinicians work on the same patient order entry system. Using fingerprint biometrics ensures that there is full accountability for care delivery at any given point, irrespective of the clinician.
Biometrics and its application are redefining the banking experience for rural and the unbanked population – in emerging countries especially – as one of the key authentication methods. Biometrics is helping in e-KYC, often used to open a bank account, on-site cash delivery by scanning fingerprints, opening a bank’s wallet with fingerprint authentication, fingerprint-based ATM kiosks and fingerprint mobile ID all connected through the IoT Solutions.
Governments use fingerprint biometrics to accurately authenticate the identity of travelers, implement biometric voting systems for fair and credible elections, develop fingerprint-based national identification cards and create a composite individual identity. But with this advantage, there could be associated challenges of managing personal databases in a safe and secure environment.
Better supply chain visibility and management is considered one of the most common benefits of IoT deployments, and has use cases in several industries, including Transport & Logistics, and Primary industries. Inventory management became a lot easier and reliable, when IoT sensors and devices can do remote stock taking and track inventory movement.
IoT will enable more holistic inventory management, as asset tracking, asset management and eventually predictive maintenance, are incorporated within the IoT system. Supply chain requirements of Manufacturing organisations can vary vastly – a discrete manufacturing supply chain will vary from a FMCG supply chain. IoT sensors have made ‘track and trace’ more reliable, and easy to customise. eCommerce giant Amazon’s inventory management and warehousingsystem is a good example. To manage the large stock, the storage facilities employ pickers (robots) to pick items from and replenish stock on shelves which in turn improves receiving, pick-up, and shipping times. The inventory is scanned through barcodes which also helps in aggregating information from other warehouses for stock maintenance.
Several Retail organisations make full use of IoT for inventory management. G-Star Raw, for example, uses garment RFID tags to track inventory movements across the supply chain and store shelves. Being able to locate clothes on the basis of style, colour and size in the stores makes the order fulfillment reliable and more real-time.
Several industries other than Financial Services, such as Hospitality, Services, Healthcare and Government are evaluating IoT-enabled payment systems such as mobile points of sale and NFC payments.
There are also several use cases that are not so obvious –Amazon Go offers a shopping experience where no check-out is required. Your Amazon account, wallet and phone are all inter-connected. When a consumer arrives at a store the application allows store entry, tracks the consumer through the shopping journey and requires no formal check-out at the end of the shopping trip.
However, IoT-enabled payment systems will have to evolve as industries become increasingly services based. There needs to be a focus on the business and not just technology – defining workflows with the right alerts that will automate bill generation and the payment process, irrespective of how complicated the service delivered is.
Resource shortage and the ever-increasing price of energy has forced organisations to identify innovative ways of conserving energy. A Smart energy management system can help to reduce the costs and energy consumption while still meeting energy needs. IoT is helping companies to achieve their energy goals, predict maintenance needs, and increase the reliability of energy assets. Smart energy solutions continuously analyse energy data to ensure dynamic performance which in turn manages energy requirements.
Take an example of a smart building management system where date from various sensors is collected and analysed, such as from HVAC, air-quality monitors, and other equipments, and lighting, heating, air ventilation, elevators, room equipment are remotely operated according to the building energy requirements at the moment. This technology helps make smart decisions and provides energy efficiency.
Capital Tower in Singapore, a 52-storey high building, is not alone in being energy efficient. It has a number of in-built smart energy solutions for energy and water efficiency. The building has motion detectors in elevators, smart car parking system, exterior structure glasses which help reduce energy consumption, and water conservation through condensation of air conditioning units. The building has devices to monitor oxygen and carbon dioxide levels ensuring optimal air quality which results in significant energy savings while delivering comfort for tenants.
As is clear from the solutions that are being currently deployed, IoT adoption is at its nascency. As IoT deployments mature, there will be more industry-specific uses of IoT, and a shift of focus from asset management to people management (including customers).
What IoT solutions do you use/ intend to use in your organisation? Let us know in your comments section below.
The basic components that drive an IIoT system are:
Secure intelligent assets such as sensors and smart controllers – that can sense, communicate, store and transmit information
Communication and data storage infrastructure – often cloud-enabled
Data analytics and smart business apps that generate information from the data
How IIoT Can Revolutionise an Industry
IIoT is transforming the manufacturing industry and other supply chain intensive industries by maximising efficiency, reducing downtime and increasing the overall production. While IIoT adoption is still in a nascent stage, there are some industries that have taken the first mover advantage and have started demonstrating readiness use cases.
The Smart Factory
The adoption of IIoT has reshaped traditional factories to create smart factories. The systems work with interconnected machines and real-time data exchange that merge the departmental communications along with unified operations and information systems.
How is IIoT making factories ‘smart’?
IIoT has revamped how the traditional units worked. The slow and manual processes are now automated processes with M2M communication. This can be easily demonstrated through an example of how Smart Factories deal with preventive maintenance.
A smart factory has machines, sensors, databases, and humans all working in sync with each other. Sensors within machines can automatically notice a fault and the software logic sends an automatic alert to the right human to analyse the cause behind the fault. With Artificial Intelligence incorporated, machines determine the cause of the faults and go beyond predictive to prescriptive approach pre-empting problems before they exist. This in return reduces the maintenance cost and increases uptime of the factory by introducing parameters to fix machines with accuracy. In-return this leads to increased shelf-life of components and less-time involved in problem detection and rectification.
Energy & Utilities
The Oil & Gas industry is embracing IIoT with a multitude of benefits. Now the energy and utilities have an ability to easily sync data and simultaneously operate across multiple locations. This is made possible with the adoption of cloud, and installation of sensors that capture real-time data on the operating conditions of assets, monitor physical conditions such as temperature, pressure and humidity, and even environmental conditions. The practical scenario here is that Oil & Gas companies are remotely controlling their drills and monitoring the earth’s crust by remote control sensors and maintaining the flow of resources.
With so many moving parts in a logistics system, from factories, collection points, and the transport network, it was difficult to maintain and manage a single view of the entire process. Through an ecosystem of sensors on the machines and vehicles covering the entire supply chain, it is now possible to access real-time data. It allows advanced functionalities such as virtually positioning hundreds of vehicles and optimising their route. In the process saving energy and reducing the time for delivery. The consequence is reduced costs for fuel, vehicle maintenance, and staff, plus increased customer experience through shorter and more accurate delivery times.
Other Industries – Promising the change
The adoption of IIoT will go beyond the early adopters and revolutionise several other industries. The Transportation industry is ripe for transformation given that infrastructure is being strained and margins reduced. The challenges of demand and aging infrastructure can be best handled by IIoT.
Another industry that will benefit immensely from IIoT adoption is Healthcare. At the moment, asset management IoT systems have been adopted by several organisations, as in-patient remote monitoring systems that allow clinicians to monitor and analyse patient data remotely.
“The real value of IoT will be realised when clinicians have a clear workflow that allows them to monitor patients outside the hospitals,” says Sash Mukherjee, Principal Analyst, Ecosystm. “In the past, healthcare organisations have been influenced by the Manufacturing industry – by Lean and Six Sigma. They will benefit from implementing Industry 4.0 technologies, that will transform not just the provider organisations, but healthcare in general.”
Turning IIoT into a Profit Engine
Given all of this information about IIoT you may be thinking about the ROI, associated costs, benefits and the industry-wide exposure of the Industrial IoT. It is imperative that companies large & small are embracing Industry 4.0 change. IIoT is benefitting businesses through differentiated offerings, a creation of newer revenue streams and increased monetisation of existing offerings.
The Ecosystm IoT Study, 2019 looks at the drivers of IoT adoption across industries.
The data shows that the key drivers of IoT adoption can all affect the profit margin of an organisation.
Innovation. In today’s competitive world, innovation in product designing and service delivery is directly related to a positive impact on profit margins. Organisations are looking beyond cost savings through their investments in IoT and are using IIoT to bring new, innovative products and services to the market. They are looking at creating innovative businesses that can leverage technology and offer cost savings.
Workforce Optimisation. It is impossible to bring change without workforce optimisation. Organisations are working on the valuable insights offered by IIoT systems which further provide ways to optimise the workforce and accelerate productivity. Implementation of automated production units and the reduction of manual labour is bringing both productivity gains and increased profits. It is also boosting employee morale – happier employees impact the profitability of organisations, reduces turnover, improves customer interactions, and promotes more job ownership.
Customer Experience. Customer expectations have gone up and so have methods to improve customer experience. Organisations are taking IIoT seriously, as it’s unleashing capabilities to improve processes throughout the product life cycle while also improving product quality through better QCs. Feedback to product improvement time has reduced – customer features and product improvement requests can now be handled more efficiently, based on customer data.
Businesses that fully capitalise on IIoT systems are successfully building a competitive edge through their innovative products, optimised workforce, and differentiated products and service offerings to enhance customer experience.
What Lies Ahead?
As IIoT percolates into other industries, we will potentially see a new industrial revolution. This has obviously been attracting investment and technology companies quickly to offer related technology offerings that tech buyers would do well to consider along with IoT.
Data management will become an obvious challenge with IIoT-driven data proliferation. Already the industry has been talking about going beyond cloud to “fog” computing. The real value of IIoT will be realised when the solutions become able to operate on the Edge. This will see an increased uptake of SaaS offerings that will be required for quick and accurate data-driven decisions.
AI will eventually go further than basic machine learning and incorporate deep learning for better predictive and prescriptive analysis. IoT devices with embedded AI will truly revolutionise industries. This is another technology area that tech buyers should keep an eye on, irrespective of the industry.
Security and Risk Management
An explosion of IIoT devices and data will bring new risks. Cybersecurity experts and teams will be required to constantly monitor vulnerabilities, follow security best practices and eventually predict breaches.
Industry 4.0 is very much a buzzword in certain industries, with several advanced organisations already following the business and technology practices. Naturally, there are still many companies that do not see the need for new technology or would rather invest in other areas.
For organisations that are looking to modernise, innovate and remain competitive, Industry 4.0 is a good benchmark of how technology can be leveraged. IIoT is a key enabler of Industry 4.0 and has the potential to deliver benefits to majority industries through increased intelligence and curated data – the question is how soon we can witness it on a scale.
Which are the other industries that you think will benefit from IIoT? Leave your comments below
As large hardware manufacturers like Cisco, HPE, Dell and more are building specific, robust and secure infrastructure for the edge, it is believed that there will be a lot of money flowing in the IIoT Edge computing world.
The Development and implementation of Edge-Machine Learning solutions is a complex process and requires a combination of rich industry experience, knowledge of automation (PLCs, SCADAS, HMIs), electrical & mechanical engineering along with unique Edge Computing distributed system. This is used by Data Scientists to develop Machine Learning algorithms which can be utilised by IIoT applications in the manufacturing industry.
For organisations looking to implement these solutions, it is always a good idea to know more on adoption and ask for the continuation of a pilot project for more than a year.
Below are the top 5 things that one should follow to accelerate implementation of IIoT edge computing solutions in the Manufacturing industry –
1) Get help to find the needle in the haystack
With the fragmented ecosystem of IIoT vendors and companies talking about the Industrial Internet or Industry 4.0, the challenge that always appears in front of the customers is to ask for free pilots from the manufacturers.
It is not just finding the needle (IIoT best or cheaper solution) in the haystack (ecosystem), it is how this needle matches with your business and technology strategies.
I know, I am selling myself, but my recommendation to you is to get advice from independent IIoT experts.
2) Avoid OT Vendor Lock-In: We need machine data availability
Powerful Edge Analytics-Machine Learning applications require data exchange with the Programmable Logic Controllers (PLCs) of the manufacturers. By looking at the specifications we may think that it will be an easy task to extract the data from PLCs going through different ways or manufacturer’s help-guides. However, the problem is vendor lock-ins, most of the top PLC manufacturer’sdo not allow “easy” data access and extraction methods neither to the customers nor to any third parties.
It is not a question of protocols, it is a question of vendor lock-in and data availability.
Customers must seek and claim for open-source solutions to avoid vendor lock-in during the long run. The open source can better lead to the path of innovation in their manufacturing plants.
3) Edge Computing and Machine Learning: The last frontier to break between IT/OT
Edge Analytics is a key component in the integration of IT & OT and requires a knowledge of both to make it work. The lack of skills & knowledge in the IT and OT fields impact the business & operations and creates a dilemma on which department should lead the Edge Analytics projects.
Today, many cloud vendors offer IoT platforms and tools that combine the Cloud and the Edge application development, machine learning and analytics at the edge, governance, and end to end security. On the OT side, companies like Siemens have launched MindSphere, an open cloud-based IoT operating system based on the SAP HANA cloud platform.
Manufacturers should continue to deploy and develop Edge Computing – Machine Learning applications to monitor the health of their machines or to improve their asset maintenance or to monitor the quality control of their plant floor processes and shouldn’t stop because of the fear of the integration of their platform with the Public or Hybrid Cloud environment.
Edge Computing solutions help manufacturers to improve their competitiveness without the Clouds but make sure your Edge IIoT solution is ready for easy integration with the Clouds.
5) Connected Machines is the only way for new Business Models
Security is another major obstacle for the adoption of IIoT in the manufacturing industry. Manufacturers have been reluctant to open their manufacturing facilities to the Internet because of the risks of cyber-attacks.
In a fast-moving era where platforms and services require products and machines connected, every manufacturing factory should be able to tap into machine data remotely and make it available for Machine vendors. This requires every Edge Computing / Machine Learning system to be built with the capability to share data remotely via open and secure protocols/standards like MTConnect and OPC-UA.
Having machines connected is the first step to make machines smarter, to build smarter factories and to flourish new business models as Remote Equipment Monitoring.
The benefits of using Edge Computing / Machine Learning solutions are very attractive to the manufacturers because it offers minimal latency, conserve network bandwidth, improve operations reliability, offers quick decision-making ability, gather data, and process the collected data to gain insights. The ROI in such IIoT solutions is very attractive.
To get these benefits and to grace IIoT journey, manufacturers have to step-up and accept to receive tangible and innovative business value.