How did we ever get along without it?
Whether it’s the convenience of cell phones or industrial-scale Internet of Things, most transformative technologies make us wonder what life was like “before.”
Well, we did more guessing and worrying, we waited until equipment failed before making crucial repairs and we gave the first-generation of computing power to the office functions of accounting, sales and finance. Then mobile technologies migrated to the shop floor, delivery trucks and, most recently, INSIDE OF large-scale manufactured goods.
We’ve adjusted management tactics to trust data flows. Now, we expect data to find us – rather than having to go fetch it. And we use dashboards that capitalize on more data instead of hiring people to compile reports. Information gets delivered more quickly, shared more widely and at lower costs via the Internet of Things. A lot has changed but it’s primarily the pace of previously impossible speeds and accuracy – aided by new sensors and data analytics.
“Companies that implement IoT strategies properly will be able to assimilate physical products into their digital processes, treating them as workflow resources,” said Scott Johnson, CEO and co-founder of Devicify, which advises companies on IoT transformation.
“However, achieving this will require that we go beyond treating IoT as a discrete initiative or one that resides at the edge - that's only the tip of the iceberg. The more valuable opportunity, but much bigger challenge, is inside the business: how we adapt and IoT-enable our processes to fundamentally change our business models.”
At the corporate level, data about products, service and usage is a new currency for the IoT Economy. That data will power a lot more smart, integrated offerings as the models mature. Consider the sensor data Caterpillar receives on operating temperatures, oil pressure, fuel use of construction equipment from anywhere on the planet – data sets that would be obsolete by the time they were assembled by hand a few years ago, if it were even physically possible.
More data, more accurate, delivered faster in simpler devices.
Complex global supply chains and vendor networks make it harder for large, industrial companies to rapidly scale digital solutions, but massive savings and output gains are possible. Consider that videophones promised since the 1960s were delivered by wireless computer networks, for free, in the 2000s – not the telecom industry (or as we used to call it, the phone company). Fifteen years later, videochat is as common a business tool as a stapler or coffeepot.
Similarly, industry boundaries are shifting. GE is creating Brilliant Manufacturing software with its Predix platform integrating data into every step of a business process. Savvy companies augment information with human experience and judgment. Finance, HR, shop floor, logistics and other departments all see different aspects of the same work, said Paul Boris of GE Digital at LiveWorx 2016.
“The days of the RFP are over,” he said. “But there are different views of the same project needed to coordinate manufacturing and manage fluidity.”
Disrupting your own business with IoT technology, tapping your data and people is another necessary skill. In manufacturing, repeatable success and the flexibility to scale up new ventures may seem at odds. Yet, there are elements of the ‘lean’ or ‘agile’ start-up taking root in global mega-corporations.
Both scale and speed are necessary, noted Abbie Lundberg in a Harvard Business Review webinar. Like the old joke about the Boeing 747 as not an airplane but thousands of parts flying in tight formation, the ‘connected economy’ requires an interwoven ecosystem and an operating organization that can ‘exploit information at-speed’ she said.
Her research found that highly-connected business models support manufacturing success. Reliance on annuity or legacy business isn’t enough. Take nothing for granted. Leaders in the digital shift , 41 percent of respondents, reported 30 percent or more of their revenue from products introduced in the past three years. Digital silos and the absence of IT coordination are pitfalls to be avoided, she advised.
While a lot has changed, today’s business-as-usual will look quaint compared to what lies ahead.
A McKinsey Global Institute report estimated that U.S. companies are tapping less than 20 percent of their digital data potential. The gap between “haves” and “have mores” is widening, the consulting firm discovered, as data-driven and optimized companies gain a greater advantage over less able rivals. Connected talent, IoT and other new networks are remaking the landscape of daily business, creating billions of dollars in value.
Image by Fiat Chrysler Automobiles on Flickr (CC by 2.0)