Industrial IoT Trends in 2021
Published on : Tuesday 09-03-2021
Shyam Ravindranathan on why IIoT is going to drive a lot of IoT adoption in 2021 and further.
Internet of Things (IoT) as a term and technology has been around since some time but acquired prevalence in the last two decades. It was a lot of ‘hype’ initially like it is for new technologies and opportunities. In the last few years though, enterprises have now started to see beyond the hype, as they start adopting and implementing IoT with clear business cases highlighting tangible benefits and business outcomes. Since 2020, the pandemic has also spurred on the urgency for companies to digitise and automate.
IoT has an important role to play in digitisation of manufacturing companies and global supply chain. It offers tangible benefits in their digital evolution in areas such as Retail, Procurement, Manufacturing and Supply Chain to name a few. I have always worked in the intersection of technology and applications meeting enterprise business needs, so I can be accused of a slight bias (and maybe rightly so) when I say that manufacturing and supply chain use cases are where we will see the biggest returns on investment in IoT.
Companies today are increasingly being pushed to deliver more with less, increase margins and to take products to market faster than ever to keep up with global competition. Getting products to the market faster and cheaper is the new reality, but at the same time, the market does not afford you the luxury to experiment and make mistakes in this process. Add to that, global issues ranging from trade wars, managing global supply chains to skill shortages are pushing companies to adapt to changes faster, optimise, and automate operations to meet customer needs. Also last year we noticed how the global supply chain groaned under the weight of the pandemic, as it was optimised only for cost efficiency and failed to anticipate and react to the growing need of specific products. Today’s connected world requires companies to be in ship shape, and they must be on top of all areas such as planning, procurement, inventory, production and quality operations along with a responsive supply chain which is able to meet ever changing customer demand and still meet goals of higher revenue growth and providing an overall positive customer experience.
The future of IoT is Industrial IoT
Not taking away anything from consumer IoT offerings, but for the reasons mentioned above, I believe that Industrial IoT (IIoT) is going to drive a lot of IoT adoption in 2021 and further. Industrial IoT is not very dissimilar from what I call ‘consumer IoT’, because it consists of a lot of the same principles such as — connecting devices, collecting data, ensuring security, and analysing data. More importantly IIoT is about optimising business operations and the ability to react to fluctuating customer demands and market signals. IoT and Edge play a key role in connecting industry value chains and enabling companies to automate their business processes — by connecting and bringing machines, people and business processes together.
Why is business context so important for IoT?
Raw telemetry data collected from machines can only be made sense of when business context information is correlated with it. Augmenting sensor data with operational data stored in systems of records (such as product information, inventory or bin level, asset, or material characteristics) gives meaning to raw telemetry data, building insights. This enhanced information can then be leveraged in business applications and services, enabling end users to take better decisions, increasing their productivity — which in turn leads to better business outcomes.
Now let me try illustrating business context in IoT with an example. Imagine a manufacturing company, storing their raw materials in huge silos at their plants. These silos are enabled with sensors which give them accurate readings of the inventory levels for all the silos so that they have real-time visibility which is vital for their production process and output.
Normally an IoT platform will collect the sensor data and dump it to a data lake with some metadata embedded in the sensor. Then they hook it up to a dashboard or analytics tool to slice and dice or to send real-time alerts based on rules and configured thresholds. This is great and the company now has visibility into their inventory levels and gets real-time alerts and can view things on a dashboard. But is that the complete process? Does it mean that the specific business process is now automated and that the employee who oversees the inventory knows what to do? In most cases, the answer is no.
Now imagine the same sensor data correlated with business context and integrated with business process systems. The IoT data in your application will tell you that the alert for a specific silo is coming from Silo ‘xyz’ which contains the material ‘abc’ with material id ‘123’. The suppliers for this material are ‘supplier 1’, ‘supplier 2’. Supplier 1 has a better overall delivery track record. It can also tell you the planned consumption of the specific material in the production process, forecast inventory levels in the future and find the reserve or excess inventory of the material available in other plants belonging to the same company. This gives the employee in charge of the inventory an end to end perspective in terms of the business outcome of the specific IoT data. Armed with this information, the employee can start a replenishment process just in time so that the company doesn’t have to wait forever to get inventory and the supplier doesn’t have to run delivery runs as they were not able to unload their entire inventory due to problems with manual planning. In this example, IoT is so much more than a red blip on a chart.
What’s in store for IoT in 2021 and ahead?
The demand for Industrial IoT as I see it today, is a mixed bag with specialised cloud applications catering to a specific business outcome and platform offerings enabling customers to build their own IoT applications (on top) for their unique business needs. Enterprise customers want the best of both worlds with managed IoT offerings, out-of-the-box IoT functionality integrated with their existing business applications as well as the ability to build and extend their existing application portfolio with IoT capabilities.
The following points are my two cents on some of the trends and challenges that will be key to the widespread adoption of Industrial IoT.
General disclaimer: These are trends that I observed based on numerous conversations that I have had with people in my ecosystem, who are IoT experts, involved in IIoT implementations or planning for it — and not based on any extensive surveys or interviews. In short, they are subjective and my opinions!
1) Business Integration: Is key to Industrial IoT, as projects focused on achieving business outcomes for enterprise use cases in manufacturing, supply chain, inventory, etc., require IoT data to semantically interoperate with business data. Business-to-business applications will derive more value from IoT, and data integration is critical for these businesses.
2) IoT Edge Computing: Increasingly enterprise-generated data will be created and processed at the edge and outside a traditional centralised data centre or cloud. Companies will need to bring data, applications and business processes to the edge but always integrated with the cloud. The role of traditional business applications in enterprises as the central point for all decisions in line of businesses such as manufacturing, planning, and maintenance will start to be now optimised at micro-sites such as an individual plant or factory, integrated with the cloud — driving IoT adoption.
3) Lower Cost of Data Storage: In the last few years, enterprises have really warmed up to the idea of adoption of cloud data lakes. This has been driven almost exclusively by the big cloud providers operating in this space. Data lake offerings have proven to be cost effective, scalable and companies are capitalising on it by monetising vast amounts of data accumulated over years. Data lake as an offering has become commoditised and companies are shopping the multi-cloud way to avoid vendor lock-in. IoT generates a lot of data and big data management is a prerequisite. Adoption of cloud data lakes will further lower the IoT adoption barriers in enterprises.
4) Hyper-Connectivity: Connectivity is growing with the number of devices getting added every day and will explode with new technologies such as 5G. We saw how availability of connectivity with 4G technologies gave a big boost to new business models such as ride hailing. Once it becomes prevalent and affordable, I expect 5G to spawn new use cases and business models with hyper-connectivity. Manufacturing shop floors struggling with wired and unreliable connectivity, can now run micro-services and applications at the edge — faster and cheaper and integrate with central planning and execution systems when needed. It will also bring the edge closer to the cloud, with the cloud being an aggregator of data.
5) Interoperable IoT offerings: Companies realise that no one IoT provider can do all and be all. Some IoT vendors have superior IoT security offerings embedded into sensors and others have better PaaS components and yet others might use IoT SaaS applications and value-added services. Some firms might take a best-of-breed approach that will enable them to maximise value from their investment in IoT. Ideally, they don’t want to be stuck integrating these best of breed technologies in a heterogeneous IT landscape. In today's, multi-cloud world, customers will push IoT providers to build technology which will be more interoperable with similar offerings from multiple platforms and software stacks. So, significant partnerships in the IIoT space might become more and more common, to cater to this customer need.
Despite our best beliefs, technology always manages to throw in surprises and disrupt our grand plans. What do you think about the future of Industrial IoT? DM me @LinkedIn. I am always happy to learn something new and share what I know.
Disclaimer: Opinions expressed are solely my own and do not express the views or opinions of my employer.
Shyam Ravindranathan is a Director of Product Management in IoT at SAP Labs LLC in Palo Alto, California. He is focused on product strategy, definition, and roll out, in addition to engaging with customers on the IoT product portfolio. Shyam is a technology enthusiast and has worked in different roles in development, consulting in technologies such as SAP Cloud Platform, cloud-native applications, SAP HANA, and SAP Mobile Platform. Shyam also worked as the Chief of Staff of an Executive Vice President at SAP.
Shyam regularly represents SAP at various customer events and forums as an evangelist on enterprise and technology topics, and he has experience working in multiple geographies, including the United States, Europe, India, the Middle East, and Southeast Asia.
You can find him at www.linkedin.com/in/shyamrnair/or https://twitter.com/ShyamRNair