Business With the Industrial Internet of Things

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Smart vehicles and driverless cars were all the rage at the recent International CES in Las Vegas. But just imagine the business and economic potential that could be unleashed if such technologies could be applied to industrial sectors beyond consumer electronics. The positive impact on productivity and economic competitiveness would be staggering.

The Industrial Internet of Things (IIoT) is a fast-growing network of increasingly intelligent connected devices, machines and physical objects. Accenture estimates that it could add more than $10 trillion to the global economy by 2030. And that number could be even higher if companies were to take bolder actions and make greater investments in innovation and technology than they are doing today. 

The good news is that, unlike driverless cars, the Industrial Internet of Things is already here, at least among the most forward-thinking companies. The challenge is that most businesses are not ready to take the plunge. According to an Accenture survey of more than 1,400 business leaders, only one-third (36 percent) claim they fully grasp the implications of the IIoT. Just seven percent have developed a comprehensive IIoT strategy with investments to match.

One of the reasons is the as-yet limited ability to leverage machine intelligence to do more than enhance efficiencies on the factory floor and evolve to create entirely new value-added services, business models and revenue streams. 

So far, businesses have made progress in applying the Industrial Internet of Things to reduce operational expenses, boost productivity or improve worker safety. Drones, for example, are being used to monitor remote pipelines, and intelligent drilling equipment can improve productivity in mines. Although these applications are valuable, they are reminiscent of the early days of the Internet, when the new technology was limited primarily to speeding up work processes. As with the Internet, however, there is more growth, innovation and value that can be derived with smart IIoT applications.

Imagine a building management company charging fees based on the energy savings it delivers to building owners. Or an airline company rewarding its engine supplier for reduced passenger delays resulting from performance data that automatically schedules maintenance and orders spare parts while a plane is still in flight. These are the kinds of product-service hybrid models that can provide new value to customers.