September 13, 2019 Manufacturers Overconfident with Industrial IoT

Survey Reveals that Manufacturers Are Not Scaling IIoT; Need to Invest in More Innovation

September 10, 2019

By Sean T. Riley, Global Industry Director, Manufacturing and Transportation, Software AG.

A new survey of over 125 North American manufacturers primarily in the heavy industry and automotive sectors revealed they have ambitious objectives that span both products and production but are unable to capture the value from their production and production ambitions because of facing known and unknown complexities.

The survey, from Software AG, also revealed that the vast majority of manufacturers report that their IIoT investments are limited – locked in one small department or sector of their company – preventing these organizations from sharing the power of IIoT across their enterprises. This has caused these manufacturers to lose millions of dollars in potential profits as they fall behind more forward-thinking competitors that have invested in predictive analytics and innovative integration strategies that scale IIoT across the enterprise.

Other key findings include:

• 80% of all survey respondents agree that processes around IIoT platforms need to be optimized or they will face a competitive disadvantage but very few are doing this
• IT-OT (Information Technology and Operations Technology) integration is considered one of the most difficult tasks – with 57% of automotive manufacturers stating that this has prevented them from realizing full ROI from their IIoT investments
• 84% of automotive and heavy industry manufacturers agree that the most important area of IIoT is “monetization of product-as-a-service-revenue.” However, optimizing production is still important with 58% of heavy industry and 50% of automotive manufacturers agreeing with that statement
• Curiously, defining threshold-based rules is considered almost as difficult as leveraging predictive analytics to scale IIoT. More than 60% of respondents stated that defining threshold-based rules was as difficult as integrating IT systems and IoT sensors into existing control systems.

Manufacturers place a high value on IIoT, but they are encountering serious difficulties in unlocking the complete intended value to unleash their innovation across their organizations. Yet, there is a way for them to quickly and easily resolve this problem. By investing in the right IT-OT integration strategy that leverages sensors, predictive analytics, machine learning, control applications and product quality control, manufacturers can fix this problem in less than 6-12 months while realizing other key benefits, namely extended equipment lifetime, reduced equipment maintenance costs and accessing more accurate data for production-quality improvements.

Manufacturers should follow five best practices for manufacturers to scale their IIoT investments across their enterprises and realize immediate profits and competitive advantage. Those best practices are:

1. Ensure clear collaboration between IT and the business by leveraging a step by step approach that starts focused and has clear near term and long- term objectives to scale
2. Create a transparent roll out process and don’t let other plants or departments move ahead outside of it
3. Give IT the ability to connect at speed with a digital production platform that is proven to be successful
4. Leverage a GUI driven, consistent platform to enable an ecosystem of IT associates, business users and partners around the platform
5. Enable the plant or field service workers to work autonomously without continual support from IT through GUI driven analytics, centralized management and easy, batch device connectivity and management

It is critically important for manufacturers to select the best possible IIoT integration platform supported by key enabling technologies like streaming analytics, machine learning, predictive analytics and a larger ecosystem. Software AG’s Cumulocity IoT platform recently received the highest use case scores from Gartner Group in the brand new “Critical Capabilities for Industrial IoT Platforms” report which included Monitoring Use Case, Predictive Analytics for Equipment Use and Connected Industrial Assets Use Case for its IoT

Cumulocity IoT is Software AG’s cloud-first and fully extensible IoT platform that lets customers start quickly and scale rapidly. Being device and protocol agnostic allows to connect, manage and control any “thing” over any network. Cumulocity IoT is an industry leading IoT solution, which is open and independent, letting customers connect to millions of devices without being locked into one single vendor.

The Software AG IIoT Implementation survey was completed in Q2 2019 by Software AG and an independent third-party research house. The survey queried respondents at large manufacturing companies across automotive, heavy industry, high-technology, electronics, pharmaceutical and medical device industries. The respondents were primarily senior executives leading Manufacturing or Information Technology with the breakdown of 50% Managers, 38% Directors and 13% Vice Presidents or higher.

Sean Riley

About the Author
Sean Riley is the Global Industry Director, Manufacturing & Transportation, at Software AG. He has more than a decade of experience in supply chain related fields with a specific focus on logistics operations. In addition to his work experience, he holds a BA in Business Administration from Hanover College and a MBA with Distinction in Managerial Finance from DePaul University and is a certified Six Sigma Greenbelt. After receipt of his MBA, he has served as a guest lecturer for DePaul focusing on new value proposition development within a set growth strategy.  He can be reached at sean.riley@softwareag.com.

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