IIoT – or the industrial internet of things – is one of the biggest shifts in the way humans conduct busines. Connected devices have become ubiquitous – outnumbering the number of people on the planet and growing – offering unprecedented levels of data, which is fueling the Fourth Industrial Revolution.
This ability to store, analyse and implement learnings from big data is how IIoT will change the world. And it is set to completely change the way businesses operate.
With simple, affordable sensors and actuators, the most important aspects of any business can now record all the most important data. However, the real magic occurs at the processing end, as the data from various points are compared and contrasted to offer previously unimaginable levels of insight.
This will offer huge opportunities to streamline processes, vastly improving efficiency.
Perhaps the real reason why IIoT is needed is the changes that will be experienced by the consumer, with the possibility for what was once considered a one-off purchase to instead become an ongoing service.
Either way, changes are already afoot and businesses need to be ready for the impending digital shake-up.
- 1 What is IIoT?
- 2 IIoT Architecture: the pieces of the puzzle
- 3 IIoT applications – the reason for bothering
- 4 IIoT across major industries
- 5 Rethinking your business model with IIoT
- 6 The stages of IIoT adoption
- 7 IIoT challenges and complications
- 8 IIoT roadmap: questions to ask your workforce
- 9 Conclusion
What is IIoT?
The Industrial Internet of Things (IIoT) offers the ability to clearly see the various aspects of a manufacturing operation – from micro through to macro – as part of a whole.
By incorporating a broad suite of internet-enabled technology that is available today – from sensor-embedded devices, cloud computing, mobile technology, artificial intelligence and even robotics – IIoT is recreating manufacturing business model by streamlining efficiency across the entire business.
Take, for example, the production side of things. With sensor-embedded devices, software is able to predict far more accurately at what point a machines is set to experience a mechanical fault or failure. An alert can be sent to an engineer to service the machine before this problem arises, thus minimising downtime.
Part of the appeal, however, is that IIoT platform is not reliant on your workforce being IT wizards who can dissect reams of data or understand complex code. The reason IIoT is making such a big splash is because its insights are accessible to someone who may only have a cursory understanding of computers.
Thanks to advances in cloud computing, the big data collected by IIoT devices can be displayed on easy-to-understand interfaces, offering insights that are simple to comprehend and action.
The result is that the efficiencies that have created so many billion-dollar companies in Silicon Valley are now simple and affordable for the manufacturing industry to take advantage of.
And that means it’s an offering that’s seriously on the rise, with research by MarketsandMarkets indicating IIoT market size is set to grow from $US 64 billion in 2018 to $US 91.40 billion by 2023.
Industrial Internet of Things definition
The Industrial Internet of Things is the broad range of devices that connect to and offer insights into equipment and hardware, as well as the software and other analytics platforms used to glean and display insights into the data collected.
Not to be considered simply for ‘industrial’ use, IIoT offers advances in virtually all industries, and promises to improve efficiencies in supply chains, production and management.
The difference between IoT vs IIoT vs Industry 4.0
The Internet of Things is the broad umbrella term for connected devices – it includes devices that are specifically IIoT, but would includes consumer-focused aspects, such as smartcars, smartspeakers and fitness trackers.
IIoT is the interconnected machines, devices, software and platforms that are created and used specifically by businesses – of all descriptions – to improve their efficiency and thus profitability.
Industry 4.0 is the description of the current, global shift in manufacturing, also referred to as ‘the fourth industrial revolution’ (the first three being: mechanisation via water and steam power, mass production thanks to electricity and the assembly line, and automation as a result of computers).
While IIoT is part of Industry 4.0, it also includes implementing such principles as information transparency and decentralising decision-making.
In this regard, you might say that Industry 4.0 is the philosophy that will drive future manufacturing, whereas IIoT is the means by which it will be implemented.
Industrial IoT market size and economic impact
As stated above, there is expected to be massive growth in the IIoT sector in the coming years, with value approaching the $US 100 billion mark in the coming years.
Part of the market size will be informed by IIoT platforms – the ways the insights offered are recorded, stored and analysed – although Market Research Futures estimates this amount will make up a relatively small $US 650 million by the end of 2022.
Arguably the largest economic impact will be felt instead by the vast improvements in efficiency on offer.
As more and more businesses adopt IIoT models and practices, downtime created by malfunctioning equipment will be reduced, production lines will be more efficient as a result of hardware being able to self-report the need for an increase in stock availability, both of which will ultimately lead to lower costs and thus increased consumer demand.
IIoT Architecture: the pieces of the puzzle
While there are a number of ways that IIoT architecture can be set out, perhaps the most common and easily understood is a five-layer system.
1. Perception layer
The perception layer is where the action happens in the real world. It’s where, for example, a thermometer measures the temperature of a refrigeration unit to ensure it’s cold enough, an accelerometer measures the pace of a turbine, or a camera records footage.
This layer also involves actuators, which don’t just record data, they influence it – think a switch that can be flicked to turn a machine on or off, or a valve releasing more fuel into a system.
In essence, it’s where data is collected and influenced – and as batteries and computing power grow cheaper and smaller, it’s a layer that is expanding by the day.
2. Transport layer
The transport layer is all about transmitting data.
Using technology such as Bluetooth, 4G, NFC and the various other networks available, data is taken from the point at which it is collected and taken to the processing layer, where deeper insights can be taken from it.
The transport layer also allows for data to be communicated to the perception layer from the processing layer – thus allowing for actuators to influence their environment in real time.
3. Processing layer
The processing layer is where the huge levels of data are stored, analysed and go from being a series of ones and zeroes into actionable insights.
While an amount of processing can be done at the perception layer, to really make the most of the vast amounts of data from the multitude of points possible, cloud computing and processing power is required – for both storage and to provide depth of analysis from the data collected.
4. Application layer
This is the layer at which the aforementioned ones and zeroes that have become actionable insights are communicated to the user.
Three layers of data collection, transport and processing are basically useless unless said data can then be presented in a manner that is easily understood.
The application layer is where and how the data is communicated in a manner that takes into account the user – both by giving them information that they will find useful and doing so in a manner that they can follow.
5. Business layer
The business layer is the top of the system and while it is informed by the data that is fed through up the other layers, it overseas the other four, ensuring they are performing.
This is the layer at which, ultimately, the success or failure of a business will be determined, as all the data in the world is of no use unless it’s analysed and implemented successfully.
Privacy and security are also increasing concerns within IIoT and it’s at this layer such considerations are overseen.
IIoT applications – the reason for bothering
Arguably the most exciting aspet of IIoT is that it has virtually limitless potential, and the more integrated it becomes in your operation, the more benefits you will see.
Operational efficiency is one of the oldest functions of the IIoT, dating back to 1982, when students at Carnegie Mellon University installed software into a Coke vending machine that told them whether or not the machine was stocked with cold drinks.
Extrapolating this idea out, sensors can now take the guesswork out of restocking any good – as stock approaches zero, a digital notification can be sent to inform the supplier – in what is an entirely scalable concept.
It’s hardly confined to re-stocking either, with an company’s entire inventory able to be overseen and communicated using something as simple and transportable as a mobile dashboard.
When dealing with large-scale operations, overheads such as maintaining temperature and humidity, or simply keeping the lights on, can add up to huge expense.
But with IIoT devices, day-to-day costs can be minimised in real time.
Air conditioning and lighting can be rigged to run only when people are in the building – and confined to the areas they are actually required, based on sensors determining when and where human employees are. Meanwhile, a room full of servers, which needs to maintain certain atmospheric levels regardless of people present, can adjust its levels based on actual requirements – reducing costs based on seasonal and even daily weather elements.
IIoT and M2M also offers huge potential, as machines downstream can communicate to those further up the production line their exact needs. As a result, orders can be filled in a far more individualised fashion, minimising wasted product and reducing the need for storage space.
While automation is hardly a new concept, thanks to IIoT and artificial intelligence, it’s being taken to the next level.
Rather than simply pre-programming a device – say, a robot arm – to perform a single, simple task over and over again, IIoT and machine learning are combining to improve performance and therefore capability over time.
With censors, cameras and the myriad other ways an automated device can measure its surrounds, it can learn in real time how to fix a mistake – say, for example, how to pick up a component that may have fallen over.
Where previously a simple, common error such as this could destroy hours of work, IIoT automation will correct the issue as it happens and continue as if nothing happened in the first place.
While those who forget history are doomed to repeat it, IIoT’s applications in predictive maintenance can all but spell the end of unexpected and unnecessary downtime.
By installing sensors on the major components of vital machinery, it is easy to see when something is going awry and attend to it before it becomes a larger issue.
Even better is the ability to build your hardware a digital twin. Using the data your machines create as they go about their daily work, a digital replica can be built and run through the number of cycles required to find out at what point the physical machine will break down or cease to be efficient.
Using this digital ‘run to fail’ method of maintenance, you will still get the maximum use out of your hardware, but without suffering the issues associated with it actually failing on you.
After failing to achieve cut-through with consumers, Google pivoted Glass – their augmented reality eyewear – to industry, where it has become one of the best IIoT devices.
Replacing standard eye-protection goggles, AR glasses provide opportunities for on-the-job training that recognises and interacts with its environment in real time, and can alert the wearer to potential hazards in the vicinity.
Heartrate and air-quality monitors can ensure someone is aware of what affect their immediate surrounds are having on their health and safety.
And with many wearables now able to recognise their user based on physical traits – such as height, heartbeat, ocular recognition – wearables are also the future of maintaining security and privacy.
IIoT across major industries
Hindsight may be 20-20 and the future virtually impossible to predict, but the beauty of IIoT is that by using and learning from past and present data, our guesses about what is set to come next become far more educated.
And this logic can be applied to how IIoT is set to change the future of major industries – both in the short and long-term.
So, based on the knowledge we have at hand regarding IIoT’s impact, what can we expect to see in the coming years?
Oil and Gas, Energy
Few businesses in the world contrast as much as oil, gas and energy.
You could have wells in the middle of the sea, a vast field in the Middle East, or smack-bang in the middle of the city of Los Angeles.
Given the huge differences in the weather conditions, air quality and rate of production, there can’t be a single maintenance schedule.
Which is why IIoT is set to change the industry thanks to predictive maintenance.
Using the real-time data uploaded by the machinery at work, as well as analysing historical information, maintenance – and its associated costs and downtime – stops being the result of guesswork.
Rather than shutting down operations prematurely – or worse, waiting too long and being forced into expensive remedial works on legacy equipment, and potentially putting workers’ health and safety at risk – IIoT allows management to make informed decisions as to the best time to perform maintenance.
Perhaps best of all, thanks to machine learning, the need to perform maintenance works will be predicted more and more accurately as time goes on.
The wells themselves may become less predictable – but thanks to IIoT, you’ll be able to predict it!
While building information modelling (BIM) has been around for decades, the concept of creating a 3D model of a project that constantly updates its predicted completion time really comes alive thanks to IIoT.
Using RFID tags, the physical bricks and mortar being used in the project can be monitored to ensure there is no downtime as a result of simply running out of a required component. Similarly, these tags will help to keep costs down, as tracking them means the end of over-ordering.
Machinery can be tracked using GPS data, so that a piece of specialised equipment doesn’t simply sit idly on a site, while a different team that need to use it search for it in vain.
And by employing wearables, an entire workforce can be overseen from a central location. So if one project is running behind time while another is ahead of schedule, members of the latter team can be re-assigned.
The overall result is a BIM that isn’t updated at the end of each week by a project manager, but one which can show progress in real time – and therefore make recommendations to keep all projects on track.
Transport and logistics
It’s hard to overstate the differences we’re set to see in daily live over the coming years as a result of IoT and smart cities.
With predictions of autonomous cars completely owning the roads in the coming decade or two, transport and logistics are set to be turned on their head.
Faster-updating traffic lights aren’t the future: they will be abolished altogether. The cars and trucks transporting humans and goods will be able to communicate with one another, ensuring both greater safety, as well as the end of traffic jams. The efficiency of logistics will improve immeasurably.
Here in the present, we are already seeing warehouses run entirely by autonomous machines that improve their own efficiency thanks to artificial intelligence, reducing labour costs and allowing for depots that operate 24/7.
This also means real-time stock management, again reducing labour costs, and also meaning upstream systems know what they need to focus on creating as orders go out.
Infrastructure, project management
Large-scale project management will reap the benefits of predictive maintenance that oil, gas and energy will experience, be able to accurately predict project outcomes and completion dates a la the construction industry, along with having the logistical efficiency of autonomous vehicles and warehouses.
Perhaps most importantly, IIoT is going to completely change the game from a client’s perspective. We’re already living in an ‘on demand’ economy, where services such as Uber and Netflix mean consumers expect the ability to request what they want when they want it – well, that’s going to be the case with the future of project management.
With devices that capture and store data as and when it happens, as well as instantaneous access to historic information, there will simply cease to be any excuse not to keep a client in the loop.
Client expectations are going to rise, and the companies that can’t keep up – regardless of their size or history – are doomed to fail.
Rethinking your business model with IIoT
With the barriers of entry for IIoT lowering – both in terms of cost, as well as education and training required to understand and implement the systems – this new way of doing things is set to permeate across all industries.
And it’s not just going to be the big companies that get in on the act, with smaller players very much in a position to shake things up by improving their offering immensely – and fast.
As a result, now is the time to start re-thinking your business model because the present way of doing things is about to become out-dated.
Why traditional industrial business models will suffer without IIoT
One of the easiest and most obvious ways that business models are set to change as a result of IIoT is cost reduction.
While minimising cost is obviously one of the oldest methods for increasing profit, the means by which it is set to be done will be seriously shook up by IIoT.
Predictive maintenance, AI-led automation and a connected workforce will require investment, but such infrastructure will very much be the cost of doing business in the near future.
The influence IIoT is set to have on overall costs means that companies that don’t adopt these methods will produce goods and services that are simply too expensive to be competitive.
As for how IIoT will affect income, one factor would be in repositioning products from being seen as the one-off purchase of a good to an on-going revenue stream as a service.
Consider it from a construction perspective. Rather than using IIoT to build a structure and then remove all the infrastructure used to ensure the project came in on time, these sensors and associated hardware and software could be repurposed for maintenance outcomes.
The IIoT infrastructure could be used to ensure the building is energy efficient and has maintenance work performed on a predictive – rather than preventative or reactive – basis.
Given this would mean the building provides an ongoing income stream, the initial cost to build would be lowered, making the companies offering this service a far more attractive proposition – offering a lower price up-front, as well as on-going maintenance and efficiency updates to ensure the building has optimum, and therefore most affordable, performance.
Gaining a competitive advantage
The intriguing aspect about IIoT is that there is a competitive advantage ready to be seized by whoever is ready to take the leap.
It’s been globally recognised that IIoT will play a crucial role in the Fourth Industrial Revolution, and the major players in Silicon Valley – such as Amazon and eBay – have already embraced the concept, but it’s still a burgeoning concept.
But while it’s destined to be a major part of our future, many businesses are keeping their powder dry.
It’s somewhat understandable – there are obvious expenses associated with adopting these new methods, not least the costs of the required infrastructure and to re-train a workforce, and the inherent fear of change.
But this is an opportunity to gain a competitive advantage on two fronts: by reducing your costs, as well as by differentiating your offering from that of your competitors – for example, by creating an on-going service rather than a one-off purchase.
These are competitive advantages that almost any business can pounce upon, in most industries, it’s just a question of who is going to make the first move.
The stages of IIoT adoption
It would, however, be naïve to suggest an entire IIoT strategy can be adopted overnight.
Of course, it is a gradual process, one that can generally be broken up into three stages.
1. Install the hardware
If you’re going to have a connected business, the first thing you need to do is connect!
Getting sensors and actuators installed on your critical hardware and processes is the first step to collecting and storing data. And, in fact, plenty of sensors and actuators on the market already have the processing power to communicate with one another and start to offer insights and recommendations – although they’re not going to give you the depth of insight required to make company-wide changes.
2. Get the computing power
With the critical processes and hardware now creating and storing data, getting it all connected and analysed is key.
This may sound like an expensive hurdle, but the beauty of cloud computing is that it has relatively low cost barriers. You don’t need to purchase stacks of servers – simply find a cloud plan that’s cost-and-outcome-effective for you and pay the monthly subscription fee.
What’s more, the cloud is entirely scalable – as your company grows, you can increase your cloud computing power. Or, if yours is a seasonal business, you can scale down for the quieter months (which your IIoT business will be able to accurately predict).
3. Implement the changes
Ultimately, an IIoT-enabled business is only worthwhile if the people holding the reins can learn worthwhile outcomes from the data they are receiving, and then effectively put this learning into play.
This obviously means using apps that can translate big data into easily understandable, industry-appropriate language and insights, but it also requires that there be a willingness to change.
Spending the money to make a business IIoT ready is useless if you’re not prepared to shift your own processes – and if you don’t change the way you do things, logic suggests your outcomes are going to be the same.
IIoT challenges and complications
A completely new way of doing business is obviously going to come with some inherent issues, not least the fact that new equipment and processes are going to be required – neither of which is likely to be cheap.
And if these processes are implemented in a haphazard fashion, rather than according to a well-organised plan, they are more than likely going to fail.
Of course, with IIoT being reliant on the internet and inter-connectedness, security concerns will also come to the fore.
While the idea of ‘big data’ has become commonplace, it’s also led to the question of what to do with all these ones and zeroes.
And just how do you make sense of all this data – from sales leads, ad expense and employee hours worked, through to the seconds spent on logistics, warehouse temperatures, and even revolutions per minute on a turbine – as part of one big, inter-related business?
Ultimately, you’ll end up paying to store reams of data that don’t mean anything to you – making the implementation of IIoT a drain on, instead of a boon to, your bottom line.
Which is why you need a robust data-integration plan – the means by which you intend to store the data that you compile, and then sort the proverbial wheat from the chaff.
It’s more than likely not something you or someone within your organisation has the skills to do in the immediate future, but it’s also one of the most broadly catered for aspects of IIoT.
The key is to go in with a plan in place – because all the data in the world is just an expense unless you have the means to learn from it.
Legacy systems and no standardisation
Obviously, with the IIoT being a relatively new development, plenty of CEOs are nervous about how they are going to stay competitive when their business is built on legacy equipment.
And that’s reasonable – it’s hard to argue that a vital piece of machinery that was bought for hundreds of thousands of dollars only a few years ago and still lies at the heart of everyday operations needs to be thrown away because it’s not IIoT compatible.
What’s more, as is always the case with new technology, IIoT suppliers are scrambling for a share of this emerging market and that is leading to a lack of standardisation across offerings. So perhaps the sensors you have on certain hardware does not integrate with your software system.
With regards to legacy equipment, it would be foolhardy to simply toss it out if it still provides value. There are means by which information can be gleaned from such hardware by looking both up and downstream from it, then adjusting accordingly.
As for standardisation, it is an ongoing issue the world over when it comes to IIoT, which means while this is your problem, it’s also your competitors’ problem. Be aware of it and make sure your plan for implementing an IIoT strategy factors in the issue of standardisation.
Poor skills and no path to upskilling
Many a company will fear IIoT for the simple fact their workforce has zero experience with it.
So not only will there be significant expense installing new infrastructure and re-creating the business model, there is then the need to train all employees – otherwise what’s the point of having the new systems?
Of course, even if there is the desire to teach all these people an entirely new way of working, how many courses are available to upskill a workforce on systems that have only been around for such a short period of time?
But one of the most important things to remember is that IIoT – like any business model – isn’t reliant on everyone being able to do everything all the time. It requires specialisation.
Jobs change on a regular basis – it’s just the nature of employment – but the idea that you need to switch your entire workforce over to a completely new way of doing things overnight is completely unrealistic.
Change is inevitable and there will be some bumps along the way – but when has that not been the case?
While inter-connectedness is the greatest strength of IIoT – indeed, it’s at the very core of the concept – it also shapes as its chief weakness.
It’s been shown time and again that any connected device is at risk of being attacked, and hacking a single device often means an entire network is then infected.
The results range from mild inconvenience through to complete shutdown of service, from the stealing of precious data through to crucial hardware being physically destroyed.
If there is an upside to be found in the issue of cybersecurity, it’s that it’s an issue the world is aware of and systems and protocols are being created to make devices and networks stronger in the face of these attacks.
But it’s important to be aware of the gaps and weaknesses in any IIoT plan, to ensure proper training so as to minimise the risk of ‘leaving the door open’, and perform regular security updates.
IIoT roadmap: questions to ask your workforce
There are a few questions worth asking to implement a plan to make your business ready for this impending revolution – IIoT for dummies, if you will.
What’s your roadmap?
Having a plan for the rollout of IIoT in your business is paramount.
If it’s going to have a long-lasting, meaningful effect, you need to be thinking years down the track before you so much as start pricing up low-cost sensors.
That’s not to say that your plan will go off without a hitch – business blueprints require constant updates as circumstances change – but to just purchase a bunch of hardware and a cloud subscription does not mean you’ve got yourself an IIoT plan.
There are so many variables at play – the interconnectedness of your infrastructure, the re-training of your workforce, the long-term shift in business strategy – so you need to be aware of the impact they will have on one another and how they ultimately contribute to your end goal.
What hardware are you going to use?
Since installing sensors and actuators is the first step in getting your business connected to the IIoT, this is the first ‘nuts and bolts’ questions to ask.
This will be informed by your budget, but given the whole plan is long term, you need to be aware of what part of your strategy this hardware will be playing in, say, five years.
Do you have a lot of legacy equipment that needs to be retrofitted – if so, are you going to replace this legacy equipment soon with IIoT-enabled gear or has this equipment got a number of years of use left in it? These are questions that can inform a decision of whether to purchase or hire hardware.
You also need to think about the way the hardware you go with will work with existing equipment and the software you plan to use – it’s not to say you need to make a firm decision on one brand’s ‘ecosystem’, but you do need to know that your various new acquisitions are compatible.
Where are you going to do your processing?
In most cases, the quick answer to processing is the cloud.
With low costs to get started and virtually unlimited scalability, having your data stored and analysed in the cloud is the easiest solution for IIoT.
But that’s not to say it’s the only answer, with some businesses still opting to operate off their own servers.
Either way, compatibility and scalability need to be at the forefront of your mind when investigating processing power, because the plan is that this method will still serve you well a number of years down the track – when your business has hopefully grown and hardware will certainly have advanced.
How are you going to use this data?
Data is at the heart of IIoT, but simply collecting it doesn’t mean much.
You need to have a plan as to what data is worth collecting and then how you intend to use this information to further your business.
This means investigating software to extract the most worthwhile information from your stored data, as well as an app that will be able to display these learnings in a way that makes sense to you and your workforce.
It also means having a plan for the ways in which you mean to implement what you have learnt – and a willingness to perhaps fundamentally change the way you do business.
Privacy and security need to be part of the plan.
Adding more connected devices to your business sadly offers more fronts from which to be targeted for cyberattacks.
It’s one of the hazards of having an IIoT-enabled business, but it’s not a reason to avoid it – cyberattacks can occur to any business that’s got so much as a single internet-enabled device.
This merely means that, from the outset, you need to be aware of potential gaps in your system and overall security.
The world is in the throes of one of our greatest ever technological leaps forward.
The Fourth Industrial Revolution – as was the case with the three that preceded it – is going to fundamentally change the way we view industry and, as a result, business.
And one of the primary tools that will allow this shift is the Industrial Internet of Things.
We have already seen some of the ways the IIoT has changed the way businesses operate, but it’s early days.
Thanks to relatively low barriers for entry, both financially and in training, IIoT is set to be the standard for businesses of all shapes and sizes in the very, very near future.
It will change operations from the ground up, so it is a case of adapt or be left behind.