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  • By Maciej Kranz
  • The Final Say

By Maciej Kranz

During the past few years, you may have heard a lot of hype about the Internet of Things (IoT)-billions of sensors, cameras, and machines connecting to produce trillions of dollars in potential value. And perhaps you have wondered how much of it is real, how much is a futuristic pipe dream, and what it all has to do with you and your business.

I have met with dozens of companies around the world and in every industry over the past decade to help them implement IoT. Many are curious about IoT, but are confused about how they can implement IoT solutions for business impact. As an automation professional, you may already have some of the building blocks of IoT in place. However, to make IoT solutions scalable and sustainable, you will have to build a foundation based on two important enablers:

  • Migrate to open, standards-based solutions. Early automation efforts were built on proprietary technologies, but today most vendors have begun to integrate standard Ethernet and Internet Protocol (IP) technologies into their offerings. Converging all your devices on one open, unified, standards-based network is a cost-effective and scalable way to connect them-and the key to unlocking the revenue potential of IoT.
  • Remove organizational silos, and open up communication and collaboration between information technology (IT) and operational technology (OT). Today, any organization that begins an IoT deployment will likely bump up against a fundamental disconnect between IT and OT. Increasingly, however, leaders in both camps are recognizing the need to share responsibility for IoT solutions and work together to align the technology and business agendas across the enterprise.

As you begin addressing these issues, you will soon be ready to start your IoT journey. But how? I have learned from the many customers I have worked with that it is usually best to begin with a small, well-defined project that improves efficiency and productivity around existing processes. I have seen countless organizations, large and small, enjoy early success in their IoT journeys by taking one of the following "fast paths" to IoT payback:

Connected operations

Begin by connecting existing devices to your unified IP network and adjusting your business process to take advantage of these newly connected things. When all the devices in a plant or oil rig-or any facility-are networked, you suddenly have a window into every part of the operation. For example, by connecting assembly lines in 20 plants, and then connecting those plants to its enterprise network, a major manufacturer was able to:

  • reduce its inventory cycle from 120 days to 82 days
  • reduce rejected parts by 50 percent
  • increase on-time delivery from about 80 percent to 98 percent
  • reduce capital expenses 30 percent

Remote operations

Once you have connected devices on one IP network, adding remote monitoring or asset management capabilities is a logical next step. This is by far the most popular use case. Here is one example: A dairy company in India was plagued by frequent power outages and began remotely monitoring the freezers in its 150 ice cream stores. The system sends alerts when the temperature in a freezer goes up. It even suggests actions to take, such as closing the freezer door or turning on the generator. The company began realizing a payback within a month and saw a fivefold return on its investment within 13 months.

Predictive analytics

According to Vernon Turner of IDC, less than 1 percent of data generated today is being analyzed. That is a lot of data going to waste! Predictive analytics can help you sort and understand what is coming in, so you can take intelligent actions. For example, my own employer, Cisco, has deployed sensors coupled with energy analytics software in manufacturing plants, reducing energy consumption by 15 to 20 percent.

Predictive maintenance

You can also use sensors and analytics capabilities to predict when a part is about to fail, so you can fix it proactively. Global mining company Rio Tinto uses sensors to monitor the condition of its vehicles, identifying maintenance needs before they become problems-and saves $2 million a day every time it avoids a breakdown.

These four well-proven scenarios are ideal candidates to help you get started on IoT projects. Armed with an early success, you can then build momentum and tackle even more transformative IoT solutions.

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About The Authors

Maciej Kranzvice president, Strategic Innovations Group at Cisco, is deeply involved in accelerating strategic innovation powered by IoT. He has written a definitive book on how to implement and capture the unprecedented value of IoT. The first of its kind, Building the Internet of Things, gets past the hype to guide organizations across industries through the IoT journey.