Industry is at an interesting point in history today with the convergence of Operational and Information Technology (IT/OT). Sometimes termed the “fourth industrial revolution” and enabled by the confluence of the Industrial Internet of Things (IIoT), Big Data Analytics, the Cloud, and Mobile, the pace of change and opportunity within industry is at the beginnings of an exponential phase. Within the realm of Asset Performance Management (APM), we’re beginning to see companies develop new levels of intelligence and visibility into operations, which in some cases are leading toward wholesale transformations—such as the development of new revenue streams and business models—created by this technology revolution in the form of Smart Connected Assets.
With the level of opportunity that Smart Connected Assets present within APM, the cost of inaction is extremely high. It is of critical importance that companies take part in IIoT education and investment now to begin building out Smart Connected Asset capabilities to avoid being left behind. You can be sure that your top competitors are.
How Smart Connected Assets Are Revolutionizing Industry
Smart Connected Assets allow companies unprecedented visibility and intelligence into the state of their production assets through the creation of a smart network of embedded sensors and associated software that automates operations, predicts issues before they arise, and presents information in realtime. Already manufacturers are moving away from the reactive maintenance of past years and toward predictive models, achieving new levels of uptime and the cost savings that go with it.
In certain cases, companies are now altering their business models by offering capacity instead of capital goods, such as flight hours rather than jet engines, or other guaranteed asset uptime scenarios. While this transformation is in its infancy, it represents a major coming differentiator in businesses outmaneuvering competition by offering customers what amounts to essentially a risk-free operational environment around their products.
Recent research confirms that the market is beginning to realize the importance of APM in improving Operational Excellence, but is still lagging in the smart technology investments that will be needed to make Smart Connected Assets a reality.
Some 70% of respondents to LNS Research’s Asset Performance Management survey responded that APM investment is on the increase within the year, 15% of which said it would increase significantly.
Early adopters have the additional advantage of a forgiving market as the rules of engagement between users and vendors is under much negotiation. A collaborative environment involving give-and-take will allow for experimentation in data ownership, service level establishment and other issues. Though companies are beginning to focus on APM more as a tool to improve operational performance, there has been slower activity in investment around the IoT technology necessary for smart connected assets.
According to the data, nearly half of respondents have yet to invest in smart technology to date and over 20% have completed some investment but are not leveraging data to full effect, but as the value of Smart Connected Assets is further demonstrated in the marketplace, we expect this balance to change over time.
Be at the Forefront of the Smart Connected Asset Revolution
The firms that are able to develop the real-time intelligence and capabilities of Smart Connected Advantage will be at a distinct advantage vs. those that do not, in improving operational performance, lowering costs, delivering products, and having input into nascent relationships facilitated by new products and business models/services. Conversely, organizations that fail to educate and invest appropriately around Smart Connected Assets in the near future run the risk of being left far behind those that do.