Companies 'Get' IoT But Struggle to Implement

Manufacturers understand the importance of deploying IoT, yet most companies are just at the beginning stages of deploying IoT.
April 21, 2017

According to a study by Business Performance Innovation (BPI) Network, many companies are unprepared for the Industrial Internet of Things (IIoT). Yet the study results also indicate that most executives at those companies realize that the future of their business depends on it.

BPI NetworIoT, IoT, connectedness, networks

The study suggests that large-scale integrators and other channel partners will be among the biggest IIoT beneficiaries over the next several years. They will likely play a significant role in planning and implementation at many companies due to major internal gaps in the technical skills and management know-how needed to deploy and integrate IoT into operations and new products.

The study was promoted by responses BPI received when discussing emerging technology issues with major companies. “We conducted a number of studies on innovation, and IoT came up again and again, so we decided to do a deeper dive into the business value of the IoT,” Dave Murray, director of thought leadership at BPI Network told Design News. “We looked at where companies are in terms of adoption and planning IoT.”

The report, The Impact of Connectedness on Competitiveness, was developed by the BPI Network in partnership with the CMO Council, the IoT Institute, and The Nerdery. The study was based on a global survey of 350 global executives and interviews with innovation leaders at large global enterprises, including Airbus, Balfour Beatty, Embraer, Philips Lighting, Whirlpool, LafargeHolcim, TVH, and Hitachi, among others.

Executives See IoT as a Major Impact on Industry

The results make it clear that a majority of corporate executives are beginning to understand the importance of IoT connectedness. A hearty 52% of executives at large enterprises—and 41% of executives at all companies—expect IIoT to have a significant or major impact on their industry within three years. Some 55% of all executives say IIoT is gaining adoption within their industries, including both pilots and larger-scale adoption.

BPI NetworIoT, IoT, connectedness, networks

While executives clearly understand the importance of IoT and IIoT, they are not necessarily jumping quickly to implement. “The top line is that expectations for the IoT are quite high, but most companies are not ready to compete in this area even if they believe the future of their business depends on getting smart in IoT,” said Murray. “We found gaps in the technical skills to take advantage of IoT. This sets up a classic situation of leaders versus laggards, where competitive forces rise up between those who get ahead of the phenomenon and those who lag behind.”

Just 1.5% of executives at large companies say they have a clear vision with implementation well underway. Another 57% are either beginning implementation, have pilots underway, or are committed and in the planning stages. Murray believes the gap between the recognition of the importance of IoT and the implementation will soon close. “We are experiencing the lull before the storm of IoT transformation. This is an opportunity for real competitive differentiation and advancement.” said Murray.

Focusing First on New Products

New products and services lead as the area most companies say they will focus their IoT investments (35%), followed by customer touchpoints (29%), and manufacturing (23%). More cost-efficient operations (47%), product and service differentiation (36%), and improved customer engagement and satisfaction (34%) are seen as the top benefits of IoT.



The first step in moving to connectedness seems to be with a company’s own products. Connecting the company’s production looks like it will come later. “Companies are investing most of their IoT dollars into their own products rather than in the more complex business and manufacturing processes,” said Murray. “Airbus is doing a whole lot by getting sensor technology into their aircraft for the maintenance and uptime of their jets, but they are also looking at a future where they’re going to build smart factories where they build IIoT into the robots. That’s further out.”

Security Trumps Cost

Security and data privacy are seen as top concerns by executives, followed by the cost and complexity of IoT adoption and the need for new management and workforce skills and training. “Security and privacy are the two biggest issues. Cybersecurity is the number one issue executives are concerned about,” said Murray. “After security and privacy, the biggest concern is competitive issues. They’re concerned about falling behind.”

Part of the reason executives are concerned about security is they’re not convinced they have the expertise to solve the problem effectively. “The reason they’re so concerned about it is they’re not sure they have that issue solved,” said Murray. “They are not sure they have all the talent they need to be successful, and security is one area of technology that is a major concern.”


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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.

Charts courtesy of BPI Networks

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