There is no doubt that the Industrial Internet of Things (IIoT) market is evolving quickly. Here Dan Matthews, Chief Technology Officer at IFS, busts some of the myths and misconceptions surrounding it.

In the report ‘Digital Transformation – an Internet of Things Perspective’, IDC predicts that the installed base of Internet of Things (IoT) endpoints will grow from less than 13bn units at the end of 2015 to 30bn by 2020. The industries that IDC predicts will spend the most on IoT solutions are manufacturing, transport, energy and utilities and retail, with a wide range of IoT use cases.

In other words, the IIoT clock is ticking, and businesses not already addressing the opportunity this offers need to create and implement plans – quickly! So why are some companies still hesitating? One answer is that there are several myths regarding IIoT that are making decision-makers delay projects or stop them altogether. A focus on standards, exorbitant expected costs, and the fear of big changes are all cited as reasons. Let’s look at each of these in more detail.

Myth #1: We should wait for standardisation

Unlike consumer markets, where standardisation – formal or by market dominance – is key to success, standardisation in IIoT won’t be a concern for decades. Sure, there are multiple emerging standardisation initiatives in IIoT, and yes it is not yet possible to know which will prevail. But the thing is: it doesn’t matter. Unlike consumer markets where new standards – for example, NFC chips in smartphones – can roll out and get near full market presence in the few years it takes for people to replace their phones, industries are run on equipment that can be decades old, provided by tens or hundreds of different suppliers.

Even if the equipment manufacturers “IIoT enable” their latest generation according to some IIoT standard, it will take decades before industries have replaced all their existing equipment and assets with new IIoT-standardised versions. For industries wishing to pursue IIoT, it is just something to accept that for the foreseeable future there won’t be any standards on how to connect up all their things. Instead industries should expect and plan for bespoke integration development, or even retrofitting of other sensors and communications capabilities to equipment and assets to get them connected.

Myth #2: IIoT would be a giant leap for my business, demanding a lot of work

IIoT success is all about choosing small, actionable steps that will improve your business today – not giant leaps that will transform your industry tomorrow. For many people, IoT still brings to mind disruptor companies like Uber or Netflix. But in most cases, IIoT develops – rather than disrupts – the entire business. According to the IDC report, the main drivers behind IIoT are to improve day-to-day operations, including productivity (14.2 % of companies), quality and time-to market (11.2%), process optimisation (10.2%), costs (9.9%) and decision making (9.3%).

A look at the vast majority of companies who have already operationalised IIoT shows that the successful ones often started with a few well-chosen processes and incremental change. It can begin with connecting just one piece of equipment. Earning a little more revenue from this can then inspire bigger steps: what would happen if we integrated these findings with input from another data stream? External events, such as weather forecasts or temperature changes for instance? How could changing operations on this machine according to these inputs optimise its performance?

The key is to ask “How can we make this a little more efficient?” not “How can we revolutionise our whole business?” Incremental change is the name of the game. IIoT is about improving performance.

Myth #3: IIoT will be expensive and capital-intensive

A few years back this statement might have been true but three key developments have made IIoT implementation more affordable than ever before:

  • The falling price of IIoT hardware and software: everything from the smallest sensors to the largest gateways has fallen in cost. There is now a range of smarter, cheaper sensors and gateways available to all industries, increasing your level of software control. Take a forklift truck as a typical example. Ten years ago connecting one of these would have cost at least $1,500 – out of reach for most manufacturing operations running several of them. Today a single forklift could be connected for not much more than a 20-dollar note.
  • Cheaper, broader internet access: This has made it ever easier to connect a broader range of machines and equipment across a wider geographic area at low cost. Developments such as 5G mobile networks and LoRa (long range radio) technology will sustain this trend.
  • Cost-effective cloud platforms: On the platform side we’ve seen big, exciting changes. Ready-to-use, cloud-based platforms that can handle massive scale, storage and computing are now more available than ever before.

These three changes have made it possible for companies to get started with IIoT projects quicker and with lower risk than before, enabling more experimenting.

Operationalising data – the key to IIoT success

In addition to these IIoT myths, many companies overlook one factor: how their IIoT data should be operationalised. To get returns from IIoT investments it’s important not to stop at collecting and analysing IoT data. By only doing that you still haven’t made a cent. To benefit from IIoT, the knowledge and insight needs to be turned into action – whether that is a more optimal maintenance plan, higher service levels, improved logistics, engineering better products, or developing new business models.

This can be done in several different ways, but one key step is automating the right processes based on gathered data. For example, equipped sensors capture data about temperatures that are too high. Instead of just collecting, registering and manually acting on this data, a process is created for automatically dispatching service personnel to replace a part that has overheated, thus preventing catastrophic failures. Operationalising and automating – this is when the true power of IIoT comes to life and can generate significant revenues.