IoT

Defining the Value of IoT in a Connected World

Defining the value of IoT in a connected world - field sprinkler system - Parker Voice of the Machine

There’s volumes of material that focus on the technology behind IoT. However, a more significant discussion should be had around the value IoT delivers. While that value must begin with end users of the technology, it can’t stop there. To ensure future success, IoT must cascade and deliver value to equipment manufacturers and distributors as well.

In this stage of IoT development, value relates primarily to the visibility and insights IoT applications provide and the performance and uptime improvements they enable. In manufacturing and production environments with discrete IoT, such as that provided by Voice of the Machine™, the key business driver for IoT adoption is likely to be equipment uptime, as this addresses one of the major issues virtually every industrial company faces. 


Quantifying value

In manufacturing and production environments, downtime in one piece of equipment can impact an entire process. According to the ARC Advisory Group, 43 percent of downtime is unplanned, and this type of downtime creates a production capacity loss of 5 percent annually. In addition, repair costs are 50 percent higher for equipment that is run to failure compared to equipment that is serviced in advance. 

Yet companies can be reluctant to make investments today based on promises of value that may not be fully defined. So why is IoT’s “value” so hard to recognize? The reasons include too much focus on technology and not enough collaboration between operations technology (OT) and information technology (IT) professionals.

Focusing on the short-term value of IoT is fundamental to overcoming the resistance to adoption that exists within some organizations. It also shifts the discussion around IoT from, “here is some cool technology we are going to add to your equipment or process,” to “let’s talk about what equipment is most likely to fail, how frequently that equipment fails, and how many pieces of that type of equipment are in your overall operation.” 

The answers to those questions then become the basis for quantifying the value for a specific application. They also create the opportunity to bring OT and IoT professionals together around a common business goal: improving profitability by focusing technology in ways that directly impact costs and productivity, such as discovering when component or subsystem performance is deviating from established metrics.  

Once there is alignment on the broad goal, issues of whether the solution is OT- or IT-based become easier to resolve and organizational barriers that can complicate IoT deployments become easier to navigate.

Discrete IoT value chain - Defining the value of IoT in a connected world

 

Enabling value

With many IoT solutions, equipment distributors will play a key role in selling, integrating and supporting IoT technology. The Voice of the Machine cloud platform and data visualization tools simplify the task of implementing IoT solutions, allowing Parker’s distribution partners to better meet their customers’ demand for connectivity and intelligence.

In 2017 PwC surveyed U.S. manufacturers regarding their current and planned activities related to IoT and found that while 38 percent were offering IoT-driven products and services, only 14 percent had created IoT go-to-market strategies. As PwC states in their report on the survey, Monetizing the Internet of Things, “this suggests that some companies are offering IoT products and services without a clear strategy to market those products.” The potential result of this gap between product development and marketing is that companies will fail to see the expected return on their IoT investments. 

Defining the Value of IoT in a Connected WorldRather than focusing on the technology, the marketing strategy must present a clear and quantifiable value proposition that speaks to core business problems that OT and IT professionals can rally around. In addition, manufacturers can streamline IoT development by working with partners, such as Parker, that have deep experience in sensor and motion technology and an established platform for converting raw data into actionable intelligence.  

By taking the steps to focus IoT on applications with bottom-line business benefits, end users, distributors and manufacturers all benefit. As users get comfortable with the technology, and realize a measurable return, pockets of resistance diminish and additional applications will be more likely to proceed. Distributors with IoT capabilities will be positioned to elevate and strengthen their relationship with their customers while manufacturers can create a competitive advantage for their offerings.

At Parker, we’re helping make this possible by delivering discrete condition monitoring solutions for equipment in production operations and telematics solutions for mobile assets—and by providing our partners and their customers with the tools to support IoT applications. 


Learn more about Voice of the Machine on our website.  

Jeff Smith - Defining the value of IoT in a connected world

 

 

   Article contributed by Jeff Smith, business development manager, Internet of Things

 

 

 

 

 

Related and helpful content:

Taking IoT to the Last Mile by Listening to the “Voice of the Machine”

Building an IoT Offering to Maximize Value

Parker Teams Deploying IoT to Help Customers Improve Operations

IIoT: Uptime and Efficiency Drive Predictive Maintenance Trends

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