The Industrial Internet of Things (IIoT): Challenges, Requirements and Benefits

The idea of a smarter world where systems with sensors and local processing are connected to share information is taking hold in every single industry. These systems will be connected on a global scale with users and each other to help users make more informed decisions. Many labels have been given to this overarching idea, but the most ubiquitous is the Internet of Things (IoT). The IoT includes everything from smart homes, mobile fitness devices, and connected toys to the Industrial Internet of Things (IIoT) with smart agriculture, smart cities, smart factories, and the smart grid.

The Industrial Internet of Things (IIoT) is a network of physical objects, systems, platforms and applications that contain embedded technology to communicate and share intelligence with each other, the external environment and with people. The adoption of the IIoT is being enabled by the improved availability and affordability of sensors, processors and other technologies that have helped facilitate capture of and access to real-time information.

The IIoT can be characterized as a vast number of connected industrial systems that are communicating and coordinating their data analytics and actions to improve industrial performance and benefit society as a whole. Industrial systems that interface the digital world to the physical world through sensors and actuators that solve complex control problems are commonly known as cyber-physical systems. These systems are being combined with Big Data solutions to gain deeper insight through data and analytics.

Imagine industrial systems that can adjust to their own environments or even their own health. Instead of running to failure, machines schedule their own maintenance or, better yet, adjust their control algorithms dynamically to compensate for a worn part and then communicate that data to other machines and the people who rely on those machines. By making machines smarter through local processing and communication, the IIoT could solve problems in ways that were previously inconceivable. But, as the saying goes, “If it was easy, everyone would be doing it.” As innovation grows so does the complexity, which makes the IIoT a very large challenge that no company alone can meet.

At its root, the IIoT is a vast number of connected industrial systems that communicate and coordinate their data analytics and actions to improve performance and efficiency and reduce or eliminate downtime. A classic example is industrial equipment on a factory floor that can detect minute changes in its operations, determine the probability of a component failure and then schedule maintenance of that component before its failure can cause unplanned downtime that could cost millions of dollars.

The possibilities in the industrial space are nearly limitless: smarter and more efficient factories, greener energy generation, self-regulating buildings that optimize energy consumption, cities that adjust that can adjust traffic patterns to respond to congestion and more. But, of course, implementation will be a challenge.

IIoT, IoT and M2M

The main difference between IoT and IIoT is that where consumer IoT often focuses on convenience for individual consumers, while, Industrial IoT is strongly focused on improving the efficiency, safety, and productivity of operations with a focus on return on investment. M2M is a subset of IIoT, which tends to focus very specifically on machine-to-machine communications, where IoT expands that to include machines-to-objects/people/infrastructure. The IIoT is about making machines more efficient and easier to monitor

IIoT Challenges

  • Precision
  • Adaptability and Scalability
  • Security
  • Maintenance and Updates
  • Flexibility

IIoT Requirements

  • Cloud Computing
  • Access (anywhere, anytime)
  • Security
  • Big Data Analytics
  • UX (User Experience)
  • Assets Management
  • Smart Machines

IIoT Benefits

  • Vastly improved operational efficiency (e.g., improved uptime, asset utilization) through predictive maintenance and remote management
  • The emergence of an outcome economy, fuelled by software-driven services; innovations in hardware; and the increased visibility into products, processes, customers and partners
  • New connected ecosystems, coalescing around software platforms that blur traditional industry boundaries
  • Collaboration between humans and machines, which will result in unprecedented levels of productivity and more engaging work experiences

The Future of the Industrial Internet of Things

Accenture estimates that it could add more than $10 trillion to the global economy by 2030. And that number could be even higher if companies were to take bolder actions and make greater investments in innovation and technology than they are doing today.

The good news is the Industrial Internet of Things is already here, at least among the most forward-thinking companies. The challenge is that most businesses are not ready to take the plunge. According to an Accenture survey of more than 1,400 business leaders, only one-third (36 percent) claim they fully grasp the implications of the IIoT. Just seven percent have developed a comprehensive IIoT strategy with investments to match.

One of the reasons is the as-yet limited ability to leverage machine intelligence to do more than enhance efficiencies on the factory floor and evolve to create entirely new value-added services, business models and revenue streams.

So far, businesses have made progress in applying the Industrial Internet of Things to reduce operational expenses, boost productivity or improve worker safety. Drones, for example, are being used to monitor remote pipelines, and intelligent drilling equipment can improve productivity in mines. Although these applications are valuable, they are reminiscent of the early days of the Internet, when the new technology was limited primarily to speeding up work processes. As with the Internet, however, there is more growth, innovation and value that can be derived with smart IIoT applications.

Imagine a building management company charging fees based on the energy savings it delivers to building owners. Or an airline company rewarding its engine supplier for reduced passenger delays resulting from performance data that automatically schedules maintenance and orders spare parts while a plane is still in flight. With IIoT there will be no more missing planes , information is live and up-to-date about the plane and the need for the black box will diminish. These are the kinds of product-service hybrid models that can provide new value to customers.

This transformation in business will also have dramatic implications for the workforce. Clearly, the Industrial Internet of Things will digitize some jobs that have, until now, resisted automation. But the vast majority of executives we surveyed believe that the IIoT will be a net creator of jobs. Perhaps more importantly, routine tasks will be replaced by more engaging work, as technology allows workers to do more. As the focus shifts from products to customers, knowledge-intensive work will be required to handle exceptions and tailor solutions. Virtual teams will be able to collaborate, creating and experimenting in more spontaneous and responsive environments.

The transformation in business models draws a parallel with those sparked by the emergence of electricity. It took decades to move from lighting streets to creating the electric grid. The mass assembly line soon became commonplace, requiring an entirely new set of skills, management approaches and factory design. The U.S. was the first country to seize that opportunity and create an economy-wide impact with electricity. That helped the nation develop and lead subsequent innovations that became entirely new sectors: Domestic appliances, the semiconductor industry, software and the Internet itself.

Additional Reading


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