The Industrial Internet Of Things Opportunity In The GTHA
The Greater Toronto and Hamilton Area (GTHA) is full of industries — manufacturing, transportation and logistics are three of many — that could reap huge benefits from the new wave of sensor-enabled, Internet-connected technologies that are transforming traditional industries across the globe. But are the decision-makers here aware of the disruptive change that is coming and the compelling opportunities that are opening up? And do they know how to take advantage of the new era of embedded intelligence, sophisticated sensors, and seas of data?
You’re probably coming across phrases like “Internet of things”, “big data”, and “machine learning” so frequently that they’re blurring together. This phenomenon has a name: buzzword fatigue, and you probably recall it from the days when “cloud computing” and all of its associated buzzwords were all you heard about.
Just like “cloud computing” could be dubbed “outsourced IT infrastructure”, IoT and its related technologies aren’t really as new as their proponents make them out to be. Internet-connected devices have been around for as long as there’s been an Internet, and storing piles of data and performing statistical analysis on it (“big data”) isn’t new either.
As such, in the constant flurry that defines life as a modern executive, it’s easy to chalk this stuff up as hype, or to add it to the list of things to discuss at your next management retreat (again).
However, that would be a mistake, because the risk of disruption is real and the opportunities are myriad. As with so many technologies, the advancements that have been made in the field of IoT (decreases in size and power consumption, improvements in reliability and durability, etc.), and improvements in associated services (such as cheap cellular data plans to support wireless IoT) are having a major impact.
In the same way that the breadth and depth of Amazon Web Services’ interconnected services means that cloud computing has transcended “outsourced IT infrastructure” to become something unique and incredibly powerful, IoT is coming into its own.
The encouraging part? It’s easier to get started than you think. I speak from experience, because in the last few months, our company has been designing and developing a suite of digital products (web and mobile) for an industrial manufacturer.
I can’t tell you who our client is, due to NDAs, but I’ll tell you about a few of the things that I learned from the experience.
The First Mover Advantage Is Still Within Reach
Our client demonstrated the technology we built at the leading conference in his industry and reported that “no one else had anything like it”. “Our competitors were coming to our booth and telling us how impressed they were.”
According to the Dresner Advisory Services’ 2016 The Internet of Things and Business Intelligence Market Study, the majority of industries do not see IoT as important today. The same study found that this perspective varied according to business function, with people in sales and strategic planning placing the highest level of importance on it. This says two really important things: first, the people who think hardest about what customers want and about the future of their industry understand how important IoT is. Second, that a lot of other decision makers still don’t get it, which means the window of opportunity to gain the first mover advantage on this is still very much open.
Major industrial innovations don’t come along all that often. In 1954, Hamilton-based Dofasco (now owned by Arcelor-Mittal) became the first company in North America to introduce the “basic oxygen furnace” into its steel-making process. Competitor Stelco (now U.S. Steel) didn’t introduce that innovation until the late 1960s. Stelco’s failure to innovate has been a huge factor in the economic struggles it has experienced for decades, while rival Dofasco has enjoyed prosperity.
I think this is especially relevant for the GTHA area because we have such a large base of mid-sized commercial and industrial companies that are not investing in the technological innovation that would help them compete more effectively nationally and globally. Perhaps that’s because the ROI is not always apparent, which takes me to my next couple of points.
IoT Is Gold For Sales And Marketing
It can be hard to talk to customers about industrial technology. Improvements in energy efficiency and durability, reductions in cost, and updates to features can be significant, but they don’t make for sexy marketing copy or memorable tradeshow experiences.
Being able to put a smartphone in someone’s hand that shows them how a piece of machinery on the other side of the globe is performing, right in that moment? Now that’s something people get excited to talk about. Now tell them that not only can you see how it’s performing, but you can also change its settings, letting you perform the kind of maintenance on it that you previously needed to send someone around the planet to do, and the revolutionary nature of the technology starts to sink in.
It’s also interesting how excited people get when you can leverage other, mature technologies in new ways. For example, sending SMS (text) messages to someone’s mobile phone when there’s a problem with a production line or a piece of equipment — or even better, sending these kinds of alerts before there’s a problem, so it can be proactively managed.
On the sales side, the data generated by IoT can give your salespeople a powerful advantage. A common use for IoT is monitoring and managing energy consumption. The data from this type of monitoring can be very persuasive: showing a prospective client the energy savings they can expect if they install your technology using actual comparables generated by a similar facility owned by an existing client is extremely compelling!
The Data It Generates Is Gold, Too (But You Have To Mine It)
Sure, the data generated by these IoT devices is big, but so what? What’s the value? What’s the ROI on the hosting bills you’re getting for that infinitely scaleable database?
The truth is, data has no inherent value. It’s only value is in what you can do, learn, and understand as a result of it. Data from industrial internet of things (IIoT) devices is a veritable gold mine, because with it, you can:
- Monitor performance, and performance changes over time, in your equipment, production lines, and vehicles.
- Optimize production lines, transportation routes and operational processes by finding inefficiencies, eliminating downtime, and maximizing utilization.
- Maintain equipment before it breaks down. For instance, accelerometers can detect vibrations that exceed a particular threshold, which trigger alerts.
- Engage in forecasting activities, allowing you to better plan your investments of money, time and energy.
- Identify and track trends related to market ups and downs, seasonal variations, and other cycles.
- Generate comparables that help you sell your products and services to new clients.
- Find opportunities to reduce energy consumption and track the results of efforts in that regard.
This isn’t hype. These are real, substantial benefits that have a direct impact to your bottom line, and they’re directly connected to IoT technology. If you’re not doing this stuff, you should feel excited, because you’ve got some great opportunities sitting in front of you — but you should also feel worried, because your competitors are doing this, and they’re gaining a real edge.
IoT Implementation Is Doable, Even For Midsize Companies
If you’re an executive at a mid-size company, it may not be apparent that implementing a strategy that involves IoT is doable. However, the technologies are maturing and costs are coming down. Cloud platforms like AWS have dedicated infrastructure for IoT that is both robust and secure enough for mission-critical requirements, and flexible enough to support an unlimited variety of custom applications.
There are numerous off-the-shelf components available for both IoT and IIoT requirements, and for more specialized needs, it’s never been easier for even small electronics labs to design and fabricate specialized sensors and controllers.
I believe that when it comes to meeting the unique needs of mid-sized companies, smaller outfits like our company are ideally positioned to provide best-in-class solutions.
Many of the technology providers in the space are larger companies, like Rogers and Siemens, and the experience for midsize companies working with these larger vendors is often less than ideal. You’re not important to them and they’re eager to sell you off-the-shelf software — software that initially seems like a good deal, until the bills for the time and materials spent customizing them start rolling in (expenses for “customization” often outpace initial purchase costs by a factor of four or more).
These companies also lack the nimble, iterative approach that characterizes a small, multidisciplinary team approach to designing and developing digital products. You get locked into a Scope of Work (SOW) that doesn’t provide you with any options for course correcting during the design and build process and all too frequently you end up in Change Order hell.
And, of course, if you want to create something truly unique, you can’t use something out of a box by definition.
So if you’re unsure on how to proceed, or you’re seeing the opportunity and want to get started, get in touch with a small firm like ours. We can help you gain the first mover advantage, put some wind in the sails of your sales and marketing efforts, and generate a goldmine of data you’ll be using for years to come.