5 Key Challenges Manufacturers Face with the IoT

Written By: Brant Henne
  • 9/3/2014

The transformation of manufacturing around smart, connected products and the IoT is not a question of if, but when, and manufacturers have hard-earned advice for newcomers considering a move towards building, operating, and supporting these new technologies.

Cisco sizes the IoT (Internet of Things) as a $19 trillion market opportunity, delivering new value to customers through an extended product life and better service and support. But a recent survey by IDG suggests that IT managers—the front line in smart-product development, have only just begun transitioning to business models that support smart, connected products (SCP).

IDG respondents who haven’t yet entered that market were asked what challenges they anticipated, while counterparts already in the market assessed their current challenges.

With prolific media coverage of security and privacy issues surrounding the IoT, most IT managers say they are aware of risks, and beyond security, some IT managers are experiencing or anticipating challenges in integrating smart products with existing solutions, as well as training/skills development.

But the IDG survey also reveals a gap between expectations and experiences.

Here are five IoT and SCP areas in which IDG identified potential challenges for manufacturers:

Meeting deadlines. The IDG survey shows that while IT managers with no experience in SCP manufacturing did not expect the trend toward smart, connected products to impact their deadlines, over half of those experienced with SCP said meeting deadlines is a challenge. Sound systems engineering practices and conservative timelines can help ease this challenge.

Storing and managing data. Less than a quarter of “pre” SCP companies reported being concerned about how they are going to store and manage data—but experienced respondents suggest they should. With an estimated 26 billion units online by 2020, Gartner has outlined the need for organizations to prepare now for data challenges, including plans for availability, privacy, storage management, effective data mining, and hardware.

Development of new business processes and software. This challenge concerned less than a third of pre-SCP respondents, but sensors that monitor and measure device status are only useful if there’s a speedy response is actuated. Organizations will need to expand their plans to accommodate tracking and automation software, and service processes.

Connectivity with remote assets. Only a small proportion of pre-SCP respondents said connectivity is a concern for them, but manufacturers who compete on a global scale will find their products being utilized in increasingly remote geographies. Consider smart machinery used in rural locales with an underdeveloped telecommunications infrastructure. Effective data exchange and actuation in remote locations should be regarded as a substantive challenge.

Expansion of partner ecosystem. Only a quarter of respondents to the IDG survey recognized challenges in building out partnerships despite a clear need to forge new relationships. From transmitter and software developers, to telecommunications and service fulfillment firms, the IoT revolution is challenging manufacturers to seek out new technology partners.

Manufacturers have already begun transitioning to building and support smart, connected products; many more will quickly follow. Despite others citing obstacles, IT managers are still failing to anticipate the number and scope of challenges.

The results of IDG’s survey indicate that IT managers who ignore these challenges do so at their peril. Companies who have already adopted their business models make an excellent resource for understanding what will be required.



  • CAD
  • Industrial Internet of Things
  • Industrial Equipment
  • Connected Devices
  • Digital Transformation
  • Industry 4.0

About the Author

Brant Henne

As a Content Strategy Manager, I thrive on engaging technology stories. There's no shortage of these stories at PTC; we're helping entire industries use the IoT and AR to transform their business.