We’ve heard a lot of promises over the last decade about how Internet of Things (IoT) is going to change the world, especially in manufacturing, but what is the actual state of play right now? Is IoT taking off, or is it just another tech fad?
Two studies published at the end of 2017 show us exactly where we are right now. The first is Vodafone’s annual IoT barometer which looks at global IoT uptake across a number of sectors. The headline figure in this report is that IoT usage has doubled since 2013 — from 14 percent to 27 percent across all survey respondents.
The results are extremely positive, with 53 percent of respondents saying that they have seen a significant return on investment on their IoT projects, while 67 percent said that their IoT network is mission critical.
In manufacturing, the figures are much higher. A study by Bsquare found that 86 percent of respondents are using Industrial Internet of Things (IIoT) solutions, with 84 percent finding the solutions very or extremely effective. The construction and transportation industry led the way with 93 percent using IIoT.
What’s behind the uptake in IoT?
IoT and IIoT are being used to both increase revenues and decrease costs.
The most common usage of IIoT (90 percent) is monitoring device health, which helps to reduce repair costs and downtime. A further 67 percent use IIoT devices for logistics, although only 18 percent have found a way to increase production volumes through smart devices.
Vodafone’s multi-sector survey shows IoT being used in a variety of ways, but it seems to have the greatest effect is where it is integrated with other systems, such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). Companies that combine IoT with their ERP and CRM have been able to reduce costs, and 51 percent of such companies have also been able to identify new revenue streams.
Of those that have lowered costs through IoT integration, 28 percent have seen costs drop by up to 20 percent. Meanwhile, 29 percent of those that have found new revenue streams have seen profits rise by up to 20 percent. It’s a dramatic change for any business and proof that IoT is here to stay.
What’s next in IoT?
While the current state of IoT is cause for celebration, we are still a very long way from making the most of this technology. As shown in the Bsquare study, most companies have yet to start mining live data for insights, with only 48 percent having a dedicated analytics team. Even fewer — 28 percent — are automating processes based on those insights.
The big obstacles here seem to be infrastructure and people. Cloud platforms can provide the infrastructure, with Microsoft and Amazon being the market leaders so far, but moving complex systems, such as ERP and CRM, to the cloud can be a lot of work.
In terms of people, there is a universal shortage of analytics and AI experts. Over time, these people will start to come through the talent pipeline and even small businesses will be able to hire consultants for a reasonable fee.