Realizing the Opportunity Arising From the Internet of Things

Aug. 2, 2018
Building out the value chain to realize the promise of IoT-enabled innovation is the difference between an Internet of Things and an Innovation of Things strategy.

Though the Internet of Things (IoT) might be built with innovative technologies, real innovation is found in how it allows organizations to become more intelligent, agile and adaptive. Organizations must look past the hype of the IoT to see the real opportunity to enable the “Innovation of Things,” notes Benson Chan, senior partner at research and consulting firm Strategy of Things.

The IoT refers to a network of connected devices collecting and exchanging data over the Internet autonomously. Business process management (BPM) software analyzes, discovers, designs, implements, executes, monitors and evolves collaborative processes across organizations. Until recently, however, teams and resources dedicated to deploying and managing IoT and BPM have operated in silos. Organizations must bring these two disciplines together to fully realize the potential for change and innovation.

While the IoT is a building block for the factory of the future, it’s also dictating change on the factory floor.“Unless it is made actionable, and connected to a responsive loop, the petabytes of data generated by the IoT are merely a burden, not a benefit or a source of competitive advantage,” comment analysts at “Resolving this challenge is what will drive a rapidly growing volume of IT investments in the era of the fourth industrial revolution. While there will be investments in data generating devices, there must be connected business rules and processes for this data to be actionable.”

Historically, processes have been run, measured and evaluated—in that order—with improvements then implemented to optimize performance. Today, with the IoT, all these critical phases may take place simultaneously and near instantaneously. The opportunity for continual operational optimization is exciting, but systematic processes must be in place to support this innovation.

In its report Predictions 2018: IoT Moves From Experimentation to Business Scale, Forrester Research emphasizes the need to build out capabilities around IoT-enabled products and experiences, such as remote product management, monitoring and control, and the ability to integrate IoT-enabled business assets into cohesive business processes.

BPM capabilities with manufacturing execution systems (MESs), enterprise resource planning (ERP) systems and enterprise content management (ECM) systems all play roles in the orchestration of data consumption, analysis and action—creating seamless handoffs between systems, people, processes and machines to revamp processes in the IoT age.

However, having the right technologies and systems in place is just the beginning—manufacturers also need new thinking and leadership strategies. Following are three strategies to evaluate for your business:

  • Process mappingunderstanding the impact on existing operations. Equipping machines with sensors is a foundational IoT strategy that offers significant value. If a sensor sends out an alert when a machine goes down, it will likely have implications for the shop floor schedule, customers, raw material requirements, etc. Process mapping exposes the waterfall effect of data and events across the manufacturing organization and how existing business applications can be optimized with connected factory-floor data streams.
  • Enlisting a tiger team. Completed process mapping identifies specific areas where an IoT-enabled approach can add significant value—an excellent starting point to enlist a “tiger team” to move forward. Accessing the right talent to integrate your connected factory initiative might involve pulling in resources from outside your organization, such as local university academics and students, as many undergrad- and grad-level programs seek to partner with manufacturers to offer students real-world experience. Your business software vendors can also provide a consultative role. 
  • Closed-loop actions and compliance in the connected factory. The advent of the IoT does not reduce governance and compliance for manufacturers. The need to document corrective actions and other reporting to meet safety, compliance and environmental compliance requirements is constant. ECM can help digitize this documentation and streamline associated processes, ensure they are routed and reviewed by the right human stewards, and secure and manage information according to disposition schedules.

Though the connected factory demands new and emerging technologies to be overlaid and interwoven into the manufacturing environment, it’s important to recognize that existing systems, such as MES, ERP and ECM, are also at the forefront of IoT enablement. Together, with new thinking and new approaches around IoT, manufacturers now have the framework for the Innovation of Things.

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