Industrial Internet of Things: Companies optimize processes

The Industrial Internet of Things (IIoT) is gaining momentum in Germany. 28% of companies have completed their first IoT projects. The proportion of companies that are currently in the pilot phase of a project is 15%. 47% of companies are planning and evaluating new IoT projects. These figures are part of a study of the market research company IDC. IT and business decision-makers from 258 organisations with more than 100 employees in discrete and process-oriented manufacturing, energy and water supply, waste disposal, trade, transport, logistics and transport were surveyed.

Manufacturing companies as pioneers

Looking at the individual industries, the discrete and process-oriented manufacturing proves to be a pioneer in IIoT. Many supply and disposal companies are in the pilot phase, whereas the trade industry seems to be a laggard. Every second trading company is still engaged in planning and evaluation. In terms of the number of IoT projects implemented, medium-sized companies are behind large companies. However, small and medium-sized enterprises are strongly involved in pilot projects and in planning new initiatives.

IIoT has cost and efficiency advantages

The main reasons for using the Industrial Internet of Things are cost reduction (40%) and increased internal efficiency and productivity (35%). For most companies, the IIoT is a matter of optimizing internal processes and thus securing their competitiveness. The goals of addressing new customers (27%) and improving the customer experience with data-based services (26%) are currently of secondary importance.

An IoT platform is required to collect and analyze data. Industrial companies in particular rely on such a platform to support as many devices, protocols and standards as possible. Some 23% of those surveyed named this aspect as an indispensable requirement. According to IDC forecasts, around 70% of companies worldwide that are actively involved in the Industrial Internet of Things will use IoT platforms by 2020. Approximately half of the users will operate multiple platforms simultaneously to cover different application scenarios.

More edge, less cloud

To reduce time-to-value, companies are striving to move data analysis to the point of data generation. Edge computing plays a particularly important role in Germany. Twice as many companies in Germany (24%) rely on edge computing as the global average. In addition to significantly faster transactions and processing in real time, another advantage is that the extensive amounts of data do not have to leave the company. This results in savings compared to data analysis in the cloud. At the same time, capacities in the company's own data center are saved. The goal must be to achieve a performance- and cost-optimized balance between the cloud, the company's own data center and edge computing.

Obstacles on the way to the Industrial Internet of Things

The biggest challenges in the implementation of IoT projects are safety issues and a shortage of skilled personnel. In the survey, 31% of the companies stated that they had security concerns. The increasing linkage of information technology (IT) and operational technology (OT) is broadening the attack surface for cyber attacks, as production data are now also the focus of attention. In addition, IT landscapes are becoming increasingly complicated, making complete security considerably more difficult. Large companies in particular are suffering from the IoT shortage of skilled workers, as their projects are generally larger in scope. Medium-sized companies are more likely to be confronted with the challenge of having the necessary budgets approved (33%).

Outlook

Companies have realized that they can use the IoT to drive digital transformation. In the future, it will be important not only to exploit the opportunities for cost reduction and efficiency improvement, but also to see the Industrial Internet of Things as an opportunity for new business models and innovation. According to IDC analysts, this is necessary if German companies are to maintain or further expand their position among the leading players in the global economy.