Are Manufacturers Suffering From Digital Distortion?

The digital economy is real. People understand what is possible with today's technology, and that understanding is driving expectations. As a result, people are purchasing the experiences they crave rather than just buying products...
Aug 31, 2020

Deeper analysis of IndustryWeek Technology survey results demonstrate growing fatigue rather than looming death.

The digital economy is real. People understand what is possible with today's technology, and that understanding is driving expectations. As a result, people are purchasing the experiences they crave rather than just buying products.

Fortunately, within most manufacturing environments, even operational equipment (OT) regardless of age now leverages connectivity to provide mountains of data. Data capable of enabling valuable insights into every aspect of operations, empowering leaders to make timely decisions to optimize productivity as well as capitalize on new opportunities.

Not only is OT heavily connected, a growing number of products sport connectivity as well, enabling companies to truly understand the entire product lifecycle, influence design evolution as well as provide aftermarket services that ultimately strengthen customer relationships.

The picture is clear: manufacturers understand the importance of today's manufacturing technology, and the digital transformation is well underway. 

But, where is the support for IIoT?

When held true to its core definition, IIoT enables manufacturers to collect, analyze and leverage all the data that fuels the digital economy. While in the simplest terms IIoT is the conduit, in reality it serves as the engine seamlessly connecting and optimizing the various digital technologies today's manufacturers depend on. 

However, according to the results of this year’s IndustryWeek Technology Survey, even though digital transformation continues to permeate manufacturing environments, the numbers show very little support for IIoT. Specifically, when asked about where they are at with a strategy or implementation 58% are either waiting for the right use case or have no plans to implement IIoT.

The apparent lack of love could have a very different explanation according to Brendan Mislin, managing director and global lead for IoT at Accenture Industry X.0. Mislin tells IndustryWeek, what the numbers show has more to do with IIoT fatigue than a fundamental lack of support. “The fact that it's so quick and easy to run proof of concepts (PoC) is a double-edged sword.

There are very low entry barriers – low cost, low technical complexity and a variety of available sensor kits,” he says. “So, companies sometimes dive right in without giving sufficient attention to defining specific, measurable business goals. The result is a world full of technically successful PoCs that have little to no business value, and therefore quickly fizzle out. Over time, this can lead to fatigue about the subject.” 

IIoT is fundamental to realizing impactful optimizations and transformations that manufacturers are undergoing, explains Mislin. “Rather than putting all of the planning attention on just one of the parts, for example, IoT hardware and software, analytics, security, value realization and change management, the companies that are most successful build holistic plans that acknowledge and focus on each of the necessary components,” he says.

Time for a new perspective?

According to Mislin, it's time to move past the PoC mindset and replace it with a PoV – proof of value – mindset. “Doing a short five to 10-week test before committing to a full rollout is a good approach – if the focus is on proving value rather than proving that the technology works,” he says. “This requires selecting an advanced, stable and secure IoT platform so that the technology helps deliver true business value rather than distracts from that primary objective.”

For years many manufacturers have rolled out individual technologies, explains Mislin. “Now there is a great opportunity to bring these projects together into more unified solutions that provide a more holistic picture, from which companies can derive important manufacturing insights and optimizations,” he says.

Many of the successful early adopters of connected technologies and use cases have progressed past the IIoT moniker, explains BTV Advisors Managing Principal Jeffery Miller.  BTV Advisors enables manufacturers and their supply chain partners to achieve impactful value from their investments in digital technologies.

“While manufacturers deploy digital technologies and solutions that deliver capabilities falling under the banner of IIoT, the term no longer properly describes the scope or highest value propositions of associated technologies,” says Miller. “It has more to do with matching the sources of pressure on industrial productivity and efficiency, with which technologies deliver value by addressing those pressures.”

Fortunately, manufacturers are noticeably smarter when it comes to digital technologies, explains Miller. “They know to seek specific, measurable, rapid value from targeted investments in technologies – technologies that are imprecisely tossed into the IIoT bucket,” says Miller. “Ask a company if it has an IIoT strategy, and only 46% will say yes. However, ask how many are deploying digital technology with enabled capabilities (supply chain connectivity, digital twins, digital threads, continuity, IT/OT integrations and ML/AI), and you'll hear a number closer to 90%.”

For a clearer picture, Miller suggests using four terms as a rubric for defining and evaluating investments in digital technologies: connectivity, continuity, collaboration and convergence. “Digital technologies need to deliver value through these four dimensions,” he says. 

THIS ARTICLE WAS ORIGINALLY PUBLISHED ON INDUSTRY WEEK BY PEPTER FRETTY ON AUGUST 31, 2020.

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