Building An IoT Foundation For The Future

Tanja Rueckert

Part 3 of the “Manufacturing Value from IoT” series

In my last blog, I talked about characteristics of manufacturing IoT innovators that help them outperform others in the industry. Here, I will talk about the short-term and long-term investments your company needs to bring your IoT transformation to fruition.

Interest in the Internet of Things (IoT) among manufacturers has reached a fever pitch. Executives in every sector recognize opportunities to improve quality, speed, security, and costs by applying smart devices to operations and plant processes.

Unfortunately, hoping for IoT benefits isn’t enough to achieve IoT success – especially when a company doesn’t have the network infrastructure and information technology (IT) to deploy IoT solutions. Yet many executives simply don’t realize how complicated and far-reaching an IoT transformation will be.

  • Vision, strategy, and leadership: An IoT deployment will link many functions and fiefdoms within an organization; to make sure that connection leads to collaboration, senior executives must offer strategic guidance and commitment. That’s a problem at most companies, because only 11% of manufacturers have implemented an IoT strategy for operations. Even worse, 10% of manufacturing executives “don’t know” who leads their company’s IoT strategy. It’s no wonder that the biggest IoT challenge in operations is “identifying opportunities/benefits of IoT” (44% of manufacturers).
  • Skills and experience: Industries as diverse as consumer goods, chemical processing, and textile milling can leverage the IoT – if they have the smarts to do so. The IoT requires new skillsets within plants and among suppliers. The ability to incorporate high-tech electronics into products – including commodities such as concrete, fabrics, rubber, etc. – will be new to most manufacturers. More than a third of manufacturers report that skills/talent to leverage data/intelligence is an IoT operations challenge.
  • Network capabilities and capacities: Antiquated technology is the biggest IoT headache that manufacturers encounter in capturing, communicating, and leveraging data from operations. Only 10% have network infrastructures capable of machine-to-machine communications, and just 13% have networks capable of machine-to-enterprise communications. A quarter of manufacturers report that network capacity is a problem, too. And even when technology and bandwidth are available, cooperation among operations technology (OT) staff in the plant and IT staff in the business is often limited, hindering transfer and optimization of IoT data.

Manufacturers can achieve game-changing competitive advantage with the IoT – but few are ready. Most still need to develop networks, systems, and applications that transform data into insights. That will require short-term upgrades (e.g., update antiquated equipment, sensors, and controls; apply IoT intelligence to pressing problems, such as safety and data security) and longer-term investments and change (e.g., connect enterprise and supply-chain data streams; combine IoT intelligence with business analytics for improved forecasting, planning, and decisions).

Can your IoT infrastructure deliver on the promise of the IoT?

Stay tuned for more on how your company can increase productivity and profitability with IoT, analytics, machine learning, and artificial intelligence. In the meantime, download the report “The IoT is Delivering the Future – Now” to learn more about the complexity of an IoT transformation.


Tanja Rueckert

About Tanja Rueckert

Tanja Rueckert is President of the Internet of Things and Digital Supply Chain Business Unit at SAP. This year she was voted by IoT Breakthrough as IoT CEO of the Year.