IIoT stands for Industrial Internet of things, and it would basically mean usage of IoT solutions in manufacturing, logistics, oil and gas, transportation, utilities and other industrial sectors. We find IIoT defined as “as that complex of smart, connected products involving sensors and networking as well as the physical, Internet-connected manufacturing infrastructure (machines, equipment, remote assets, etc.)”.
According to market analysts, IoT will have the biggest growth in enterprise and industrial markets with estimation that IIoT market will reach revenue of over 100 billion USD by 2021.
We have to be aware that manufacturing companies are facing a lot of challenges when IIoT implementation comes to the table: security, interoperability, complexity of integration with existing ICT infrastructure, expected ongoing costs, upfront capital investment, managing diverse and evolving IoT technologies and standards, building business case with clear KPI and ROI, integration with the business processes, IT/OT barrier. Those are the reasons why there’s still many that are just crating concepts, planning but according to the latest reports number of real implementations is continuously growing.
All those companies are in look up for process efficiencies, new business models and E2E services with as much automation as possible. On that way they are discovering that there’s a need to make restructuring of traditional operation processes, change organizational structure by acquiring new expertise or bringing in outside resources to work with internal teams and incorporating a diverse set of stakeholders in the strategy and execution of IIoT projects – at the end all that is leading to change in corporate culture.
Pilot IIoT projects can be a great opportunity to resolve IT/OT issues that do exists for sure. But there’s a need to take a bigger picture perspective look at those pilots to face all the possible problems and resolve them on time before implementation comes in place when we expect that IT and OT teams are seamlessly in sync. Generally speaking, for successful implementation of IIoT solution, cooperation of cross-section employees, with knowledge of manufacturing processes, engineering and IT, is needed as a key element.
IIoT implementation will require significant infrastructure enhancements, SW upgrades, network connectivity adaptation, new sensors implementation, since IIoT is based on cloud services, wireless networks, cyber security, data storage, sharing and integration with the newly developed applications.
It’s clear that all the changes IIoT implementation brings, must be align with production and supply chain to ensure smooth functionality.
When we take a look at IIoT applications, most important would be: operation automatization and optimization, workforce management and optimization, remote monitoring, asset tracking, predictive maintenance and customer management and experience optimization.
Primary business drivers for IIoT implementations is reducing costs through operational efficiencies, but it can also bring new revenue streams and more competitiveness in the market.
And that’s why we have new type of IIoT business models identified:
- IIoT as a Service: managed service model of business
- Per usage based (B2C): payment on a trigger
- Data leverage: IoT data as new revenue source
At the end, I’d emphasis once again that IIoT is one of the most important IoT market verticals, that IIoT is a key element of industry digital transformation, that IIoT deployment is lead from top of the industry organization and that take-off will be slow as IIoT implementation have to be in line with long term strategic decisions.
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