Industry Research : IoT Critical to Industrial Firms’ Success, Yet Many Still Unclear on Execution Strategy
An overwhelming majority of business executives (81 percent) believe that successful adoption of the Industrial Internet of Things (IIoT) is critical to their company’s future success, but only 25 percent have a clear IIoT strategy, according to a study released today by the Genpact Research Institute and IndustryWeek, in collaboration with GE Digital and the Industrial Internet Consortium.
The Industrial Internet of Things leverages the interconnectivity of machines and systems with sensors, intelligent data, and analytics to provide increased visibility and better insights into the performance of equipment and assets. IIoT transforms the way people and machines interact, with the potential to drive significant process improvements; enhance quality, productivity, and overall operational efficiency; as well as increase growth and profitability in manufacturing and other sectors.
Security the top obstacle; possible cyberattacks also a concern
The key obstacles businesses face when leveraging IIoT technology include data security and privacy concerns (cited as problematic by 37 percent and 33 percent of respondents, respectively), insufficient skills of technology staff (35 percent), use of legacy systems (34 percent), and data quality (34 percent). Additionally, half of the business executives surveyed feel that the IIoT increases their company’s susceptibility to cyberattacks.
"This survey shows just how critical the IIoT is for the future success of industries such as medical equipment, consumer packaged goods, manufacturing, and many others," said Richard Soley, executive director, Industrial Internet Consortium. "The next hurdle for many companies is to develop a clear IIoT strategy, and one that includes protection for sensitive data from cybersecurity attacks. Successful IIoT adoption is expected to have a significant impact on business growth."
Growth and agility viewed as primary benefits
The majority of all respondents (77 percent) see the ability to spur growth as the top opportunity from an effective IIoT implementation. Agility is also a top expected benefit from the IIoT, cited by 75 percent of the respondents.
Despite the acute awareness of IIoT’s importance, underscored by nearly half of respondents who say their companies are currently developing a clear strategy, it is surprising that almost 30 percent will not have an IIoT strategy in the next 12 months. Moreover, 13 percent believe they never will use such technology or capabilities.
Leaders have clear strategy and more holistic view than strivers
To probe deeper on the qualities needed to achieve effective digitation transformation with IIoT, the research also examines what differentiates the leaders (the top 25 percent of respondents who that state their IIoT strategy is ahead of competitors) from everyone else (the strivers). More than half of leaders (56 percent) have a clear strategy compared to only 14 percent of strivers, and leaders are three times more likely to rank execution of their strategy as excellent.
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Leaders also have a more holistic view of impact that IIoT can deliver. For example, despite the concerns about data security for all respondents, half of leaders believe interconnectivity helps proactively manage risk of cyberattacks compared to only a third of strivers.
"The why of Industrial Internet of Things seems clear and solid," said Gianni Giacomelli, senior vice president and head of the Genpact Research Institute, "but the what and how aren’t. This is not unusual with all new technologies that need interoperability with established operations and systems, and is particularly true where technologies use big data to make operations 'intelligent‘—able to sense, act, and learn, at scale. Our research shows that success typically requires the ability to work cross-functionally – across IT, analytics, and business groups – to drive process transformation not just at the front end, such as in the field, but all the way across the middle and back office that support the front in scalable ways. We use this approach in what we call Lean DigitalSM, as it harnesses Lean principles and a deep understanding of industrial manufacturing, as well as human-centered design. Genpact’s new Silicon Valley innovation center brings Lean Digital to life with our clients."
Posted by Veronica Silva Cusi, news correspondent
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