In previous years, perceptions of IoT might have been that not only is it a complex venture, but also an expensive one.
Arguably, this viewpoint is somewhat outdated. The cost of computing, according to The Economist, is roughly a one hundred-millionth of what it was in the 1970s. The cost of sensors used for IoT, according to Goldman Sachs, have dropped from $1.30 to $0.60 between 2004 and 2014. And, of course, operational costs have dropped too. The technology has therefore never been more accessible and affordable, however the perception of financial barriers to IoT persists.
Many manufacturers consider themselves too small to invest in IoT, as demonstrated by anecdotal evidence in the 2019 PwC Annual Manufacturing Report. The same report said that over 50% of businesses have no plans to implement IoT technologies or are not sure why they should. The manufacturing sector is not alone in this issue, many SMEs that we meet don’t think they have the finance or resources to invest in digital technologies.
Interestingly, though, the PwC report also suggests that many manufacturers may already be engaged with technologies like ERP systems and CNC robotics – both of these being core elements in any IoT infrastructure for manufacturers. It seems therefore, that some small businesses in the UK may actually be deploying smart technologies without even realising it.
Based on this, it’s possible that a lack of awareness of what actually constitutes an IoT infrastructure – and what benefits it may bring – is the key barrier in businesses adopting IoT technologies. That’s not to say some businesses may indeed be struggling with the costs of IoT, but as an emerging and evolving technology, many businesses aren’t clear which use cases and practices make economic and business sense.
The impact that the fourth industrial revolution and IoT could have on the UK economy is huge but it can only be truly advantageous when coupled with an acute awareness of what IoT can offer. To do this, businesses need to understand not just what IoT can do, but what they must do to be ready to invest in it. This may be ensuring a business has the right tools and skills for implementation, but it may even be as early stage as learning what IoT is.
Adoption of IoT is more than just creating new offerings or a shift to providing services. Digital transformation is about combining traditional manufacturing processes with new technologies to create efficiencies. This could be using data to predict downtimes or using sensors and wearables to improve worker safety. It could be using digital twins to test new functionalities, optimising your supply chain using big data, or using smart devices to communicate with CNC machinery.
As IoT becomes more clearly understood within the engineering and manufacturing sectors, the barriers to infrastructure rollout are lessened
These examples form the basis of using IoT to advance manufacturing. Implementation of IoT is not just about technological change however, success relies heavily on cultural change too. Business leaders will need to create buy-in from their wider organisation, and education around the need to adapt and the subsequent ROI is key to convincing finance teams to invest in IoT.
According to the 2019 Microsoft IoT Signals report, IoT adopters are predicting a 30% ROI in two years and the 2019 PWC Annual Manufacturing Report reveals 38% of respondents agree that data will inform decision-making and reduce costs.
As IoT becomes more clearly understood within the engineering and manufacturing sectors, the barriers to IoT infrastructure rollout are lessened. IoT is a multi-faceted strategy however, so it is worth considering seeking additional input to support in areas where internal resources are not sufficient.
If an existing employee base has skills gaps, outsourcing IoT development will allow manufacturers to have more capacity and specialist skills on hand for a fraction of the cost of recruitment. It’s also likely they’ll get to market faster – a serious benefit in highly competitive global markets.
Finding the right means of support to help companies bring their IoT projects to life is something I am passionate about. Whether you’re looking for business advice, financial support, or just want to gain a greater understanding of what IoT can deliver, there are many regional and national organisations that can help you get started on your digital journey.
As a global hub for the development of sensor and IoT technology, Sensor City is one such solution provider, offering bespoke, hands-on support for early stage technical developments and rapid prototyping. We provide access to a wide network of experts, university researchers and student talent, as well as training opportunities to assist in the first steps towards IoT deployment.
Editor’s note: Find out more about investing in and adopting a successful IoT infrastructure with Sensor City’s 2020 Guide to IoT Adoption, available here (email required).
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