Study predicts smart embrace of operational connectedness will drive competitive advantage and category disruption
Nearly one third of executives at large enterprises are facing a “major skill gap” in their Industrial Internet of Things (IIoT) readiness despite acknowledging that the future of their business depends on it, a new report finds.
The study, The Impact of Connectedness on Competitiveness was developed by the BPI Network in partnership with the CMO Council, Penton’s IoT Institute and The Nerdery a digital strategy, software engineering and design firm.
Some 350 executives were quizzed for the study in addition to interviews with innovation leaders at large global enterprises including Airbus, Balfour Beatty, Philips Lighting, Whirlpool and Hitachi.
One fifth of respondents believe their IIoT skills are quickly improving, while only 7 per cent believe they have most of the skills in place.
Making the transformation to IIoT-enabled businesses will clearly require new skills and mindsets. Chief among those requirements, according to executives, are new technical skills (51 per cent), better data integration and analytics capabilities (41 per cent), and rethinking the business model (33 per cent). Most executives, however, reckon their companies have significant gaps in these areas.
“Executives are telling us that IIoT technologies are about to play a significant role in business and industrial performance, delivering significant improvements in operational efficiency and uptime, as well as growth from new business models, products, services and customer experiences,” said Dave Murray, head of thought leadership for the BPI Network.
“Nevertheless, less than 2 per cent of large companies say they have a clear vision for how to move forward or have large-scale implementations underway. That dichotomy suggests we are experiencing the lull before the storm of IIoT transformation. This is an opportunity for real competitive differentiation and advancement.”
The study indicates that large-scale integrators and other channel partners will be among the biggest IIoT beneficiaries over the next several years. They will likely play a significant role in planning and implementation at many companies due to major internal gaps in the technical skills and management know-how needed to deploy and integrate IoT into operations and new products.
Among the key findings of the IIoT survey are:
More than half (52 per cent) of executives at large enterprises expect IIoT to have a significant or major impact on their industry within three years;
Just 1.5 per cent of executives say they have a clear vision with implementation well underway, while another 57 per cent are either beginning implementation, have pilots underway or are committed and in the planning stages;
New products and services lead as the area most companies say they will focus their IoT investments (35 per cent), followed by customer touchpoints (29 per cent), and manufacturing (23 per cent);
More cost-efficient operations (47 per cent), product and service differentiation (36 per cent), and improved customer engagement and satisfaction (34 per cent) are seen as the top benefits of IIoT.
“The tidal wave that is connectedness and IIoT is building rapidly and it is unavoidable,” added Chris Locher, vice president of software development at The Nerdery.
“Companies see massive opportunities to increase efficiency, gather data in new ways and pivot into new business models. The challenge of the IIoT revolution is that it is accompanied by a great deal of white noise and confusion. How will companies capture those opportunities? How do companies avoid the risk of a failing at an IIoT initiative? How do you find employees with the skill to do it? The sheer scale and implications of IIoT can lead to information overload, create analysis paralysis, and confusion for business leaders.
“The key to moving confidently into this new space is starting with small, focused efforts or bringing experts to start to build the required skills, behaviors, and business models.”
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