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Huge Digital Divide Between IIoT Promise and Practice

GE Digital, IIoT, digital divide, advanced manufacturing, digital twin
There’s a digital gap between those who tout the IIoT and those who engage in it.

GE Digital has released research that highlights a gap between the executive outlook for digital transformation and the actual initiatives companies are putting in place. GE’s survey of IT and OT leaders found that while companies see the Industrial IoT as presenting significant opportunities for growth and competitiveness, the vast majority of companies are not yet taking actions to implement this technology.

According to the study, optimism for the potential of the Industrial Internet runs high. More than 80% believe the IIoT will or could transform their companies and industries. Even more consider digital industrial transformation to be important to their competitiveness. At the same time, only 8% say digital transformation is ingrained in their businesses, and 10% do not have a digital transformation plan in place at all.

The Divide Between Promise and Practice

GE researchers were surprised by the results of their survey. They expected a gap, but not this size of a gap. “The contrast between outlook and action is striking. The 8% number is incredible, meaning more than 90% are not ready, or are not taking the steps to take advantage of the opportunities they see,” Eddie Amos, VP of industrial applications and CTO at GE Digital, told Design News. “That number represents both a challenge and an opportunity for companies seeking to benefit from the IIoT.”

When asked whether digital transformation is critical to growth and competitiveness, 86% said yes, with 76% rating the ability to provide higher quality services as the foremost outcome of digital industrial transformation. IT and OT leaders cited connectivity (63%) and industrial applications (58%) as the primary technologies required for digital transformation.

Respondents agree that digital technology can positively tranform their industries, but they are slow to invest in the technology and deploy it. Image courtecy of GE Digital.

Respondents clearly saw the correlation between digital technology and positive business outcomes. “This is absolutely true and something we hear from our customers often – once your machines are connected and feed data into analysis, it’s much easier to realize the potential of the Industrial Internet,” said Amos. “We believe that the combination of these industrial apps, underpinned by an industrial platform, are what will ultimately drive outcomes for customers.”

Cost, Security, and Privacy Are the Hitches

As for the reasons companies are holding back from deploying IIoT, respondents pleaded expense, cybersecurity, and privacy as their concerns. Many cited investment costs (42%) as the leading barrier to digital transformation, while others pointed to system security (32%) and data privacy (32%).

Watching the list of cyber hacks in the news certainly doesn’t encourage confidence in the safety of Internet connectivity in industrial settings. “In the wake of Equifax's hack, companies operating in every industry have cybersecurity, and to a lesser extent, data privacy top of mind,” said Amos. “You’re talking about assets that span areas like energy, aviation, and healthcare that impact lives and operate in highly regulated environments, so we are not surprised that system security is a top concern.”

Workforce Skills Become A Barrier

Change management was another issue. IT and OT leaders believe their organizations need to transform to enable digital transformation. Many cited the need for new skills as an issue. Two thirds believe data analysts will need to be integrated into all departments or units. Others see the need for IT to gain in clout: 61% believe IT functions will need to become part of the central operating function of their company. Many are waiting for management to prepare the ground for IIoT deployment: 55% believe their companies are responsible for ensuring the workforce is ready for the IIoT.

Digital systems change industrial settings, so for companies that have run pretty much the same for decades, the first step is a big one. “The Industrial IoT is still truly new and unchartered territory. The industrial world is complex and creates a unique set of technology challenges,” said Amos. “IIoT requires multiple technologies – connectivity, control systems, cloud computing, data ingestion and management, analytics and machine learning, security, data governance – across a variety of different users and scenarios.”

Even while adoption is lagging, Amos remains optimistic about the eventual widescale deployment of industrial digital technology. He believes the promise is too great to ignore for long.  “The Industrial IoT is already transforming industry. Digital industrial leaders like Exelon, Hess, and Qantas that got on board early have been rewarded with improvements to their top and bottom lines,” said Amos. “Estimates show productivity gains from the Industrial IoT adding a sizable $10 trillion to $15 trillion to global GDP – in coming years.”

Rob Spiegel has covered automation and control for 17 years, 15 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years, he was owner and publisher of the food magazine Chile Pepper.

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