How to Define an Industrial Internet of Things (IIoT) Strategy
Industrial Internet of Things (IIoT), the fascinating vision of a world in which all manner of devices, machines, and systems are connected to the internet, is everywhere in the business press these days. Hundreds of startups and hundreds of millions in venture capital have been pouring into this space since the end of the Great Recession. According to Morgan Stanley, the IIoT market is estimated to reach $110 billion by 2020. Corporations, large and small, across all sectors of the economy have formed initiatives to purse this prize.
Today, we find ourselves at a time where effective technology adoption, particularly digital technology, has become the new imperative. IIoT and related technologies promise to impact our products, processes, and services. The new leadership imperative is to guide an organization through this digital transformation to drive competitive differentiation and create customer value.
In our white paper, Understanding Your Place in the Industrial Internet of Things (IIoT) Supply Network, we help you cut through the technical clutter and commercial hype to provide meaningful direction to your organization. We explain key elements that are valuable in defining your IIoT strategy:
- The IIoT Supply Network: The traditional industrial equipment supply chain already has a variety of primary participants, such as device suppliers, original equipment manufacturers (OEMs), system integrators, channel partners, and industrial end users. With IIoT, this space is further crowded by information technology vendors, operational technology vendors, and IoT startups. To be successful, it is critical that your company understands its role as the traditional equipment supply chain morphs into an IIoT supply network.
- New Forms of Competition: In this environment, new forms of competition will emerge, including the ability to differentiate through IoT enhanced products, IoT enabled services, IoT platforms, industry standards, and partner ecosystems. As illustrated in Figure 1, each model builds upon the others making the new rules of competition very dynamic. Your company may choose to emphasize one or two strategies, but all of these forms of competition will likely be in play in any given market segment. Therefore, understanding these forms of competition and your role in every one of these dynamics is critical to long-term success.
Figure 1: Hierarchy of competitive models for a traditional product manufacturer to consider
- Thriving in the IIoT Supply Network: To achieve success with these new IIoT competitive dynamics, it takes more than just new technical competencies or an evolved service model. It requires a deep domain understanding, new relationships or partnerships to leverage technology from others, and new forms of monetization to name a few. We raise key questions in the white paper that once answered will prepare and guide your organization to embrace this new range of challenges.
While plenty of hype remains and significant challenges abound, IoT in the industrial space is too big of an opportunity to ignore. If you embrace the challenge, rethink your business model, and build the competencies to leverage an IIoT strategy, you will have the opportunity to dramatically change the way you compete and add value for your customers.