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2017 will be about data ownership and security

Whether it’s the sensors or it’s the platforms people are using, the Industrial Internet market has become much more mature overall in 2016. Good examples of monetization have emerged, demonstrating that organizations have begun leveraging capabilities and competencies and turning these opportunities into something that could positively affect their bottom line. Juha Pankakoski, Chief Digital Officer at Konecranes, assesses the key developments of the past twelve months and looks ahead to the themes and possible breakthroughs of 2017.

Companies that have been in this area for quite some time are now starting to leverage value from the data that has been collected. It’s one of the things we assumed to happen already a couple of years ago, but are only now seeing to realize. Once you have proper quality data to mine for information, you notice that there are several additional layers of value that you can start generating by aggregating information from multiple sources.

Connectivity and intelligent machines are somewhat breaking the boundaries of traditional industries. On a number of fronts where automation has already been set up, for example, the speed at which it is possible to gain insight from machines is increasing at a significant pace. Some of the very successful cases have come from industries where assets are quite remote and not that easily accessible, such as the vessels or oil rigs. New solutions now allow remote support teams to better understand what is happening in the field and help local teams using different augmented reality and virtual reality (VR) devices. This is definitely something that is proving to be exciting.

The industry that is really providing excellent opportunities for others is the automotive industry, with connected vehicles and automated driving becoming more and more commonplace. Companies with billions of dollars in revenue are developing all these capabilities and putting them in place, making them more cost efficient at the same time. These solutions are then deployed in many other areas and industries where automation or “sensing” is required.

Lessons from hackathons

From our perspective, all the hacks we have organized have taught us something. In the case of the recent Maritime Hack, we encountered practical challenges associated in combining open and closed data. We found out that it is still much more challenging today than perhaps expected to get all the parties inside the port to share data with each other, despite sharing the same customer and the same objective. There are practical restrictions – legislative, contractual, but also artificial – and still quite a number of concerns in the open data sphere. This isn’t entirely unexpected, but it’s still somewhat disappointing because it’s by combining those different data streams and different actors which is required to arrive at additional value. There’s still some way to go before net openness can be achieved.

Remember that hackathons aren’t hacks as such. They deliver varying results based on the input, expectations and preparation that companies have put into those sessions. Some companies we know have had very limited success and varying results from the event. You take a risk when going into an event like this that doesn’t have a definite, specific outcome in mind. When you go in to meet new companies and new people with new capabilities, you can either be pleasantly surprised or find out that a company’s capabilities may not be exactly what you are looking for at that point in time.

As for possible breakthroughs in 2017, one of the things we will see is VR or enhanced reality-devices being used in field service operatives’ day-to-day industrial work.

Themes of 2017

2016 was the year of analytics. Data ownership and security will be very appropriate themes for 2017. Security is an underlying topic that can’t be avoided. We are already seeing connected devices that are being used for unintended purposes, such as DDoS attacks. We are also seeing several other areas where connected cars have been manipulated from a distance. It’s an unfortunate fact that every new machine or item that is connected or “smart” in one way or another is subject to hackers coming in, breaching security restrictions, and using them for unintended purposes. In an industrial environment, such situations can be hazardous.

Preparedness for this is not a straightforward or easy thing to do as it requires that you have security built into your architecture from the very beginning. Companies should either redesign their solutions or build additional layers of security into their solutions, so if something does happen, the machines can be safely ramped down to avoid an adverse effect.

In terms of business opportunities, the big potential is in data and the sharing of data. Going back to the hack itself, it is expected that we’ll see more and more collaboration between parties in terms of sharing data and information across customers and customer premises. The sharing of data and of knowledge – be it between the machines themselves or between the databases that contains the information – will then be used to generate new business cases. Interoperability and communication between machines and processes is something that will greatly profile 2017.

Further progress

As for possible breakthroughs in 2017, one of the things we will see is VR or enhanced reality-devices being used in field service operatives’ day-to-day industrial work. These devices will allow the user to get support from the back office and from the applications that can deliver additional data, information or material related to the job in hand. In this area, we will see many interesting developments. There are many solutions in the pipeline, and I would be a bit disappointed if we didn’t see several viable applications that can truly be used in an industrial environment.

We may also see some interesting announcements from large software companies on how they plan to develop and combine their IoT offering with more traditional software packages or cloud services as bundles. Whether its software or machinery, I see companies building on what they already have in their portfolio to provide a platform to develop their capabilities to the next level.

Juha Pankakoski works as Chief Digital Officer at Konecranes

Image credit: yavuzunlu / Shutterstock.com

Juha Pankakoski

Juha Pankakoski works as CDO at Konecranes

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Pressing global challenges and disruptive technology will radically reshape manufacturing

The Global Manufacturing and Industrialisation Summit (GMIS), a world-first gathering of global governments, manufacturing businesses and civil society, will be held in Abu Dhabi next year, according to an article on Mubasher. Innovations in the manufacturing sector are set to have a transformational impact on the global economy and GE predicts that the industrial internet market will grow and lead the way in improving competitiveness and creating new jobs.

As the digital and physical sides of manufacturing converge, advanced technologies are becoming more essential to competitiveness. According to Anil Khurana, PwC Partner, capital-intensive heavy manufacturing, like oil and steel production, is getting a boost from new manufacturing and information technologies emerging from the hi-tech sector.

Read more at http://english.mubasher.info/news/3002826/Pressing-global-challenges-and-disruptive-technology-will-radically-reshape-manufacturing

Via Mubasher.Info

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How manufacturing and logistics could work with smart cities

For decades factories, warehouses and power plants have used automation to huge levels of success, and yet there will still be disruption that promises to drive efficiency, increase safety and change manufacturing and logistics forever.

Although manufacturing and logistics are further along their automation journey than many others, “M2M (machine to machine) communication and device connectivity could be more accurately described as operating via an INTRANET of Things as opposed to an Internet of Things,” writes Jon Kennard in the IoT Tech Expo Blog.

Kennard continues to say that smart manufacturing gives power and insight to the business at every link in the supply chain. “Once manufacturing and logistics work together with the smart cities around them, we will see total upheaval in the way we make, sell, buy and transport goods all over the world.”

Read more about how the manufacturing and logistics sectors are driving technological change and IoT spend here: http://www.iottechexpo.com/2016/09/exhibition/manufacturing-logistics-work-smart-cities/

Image credit: Scanrail1 / Shutterstock.com

Via IoT Tech Expo

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As supply chains change, so must the companies

How will the proliferation of 3D printers change manufacturing? What must manufacturers consider when building their Industrial Internet ecosystems? Is there even a need to build one strictly for the company in question? Mikko Aro, Head of Industrial Internet Business at Solita, believes that the proper path in building the right solutions for companies can be found through collaboration and a bit of encouragement for all the parties involved.

Supply chains are changing due to the abundance of technology and the ability to localize production from large production plants to small workshops. According to Aro, the industrial sector might follow the example set in the consumer markets, where a company takes hold of one part of the manufacturers’ traditional business models by building a new digital service platform.

“We might see a shift, where the connection of suppliers and buyers in these settings becomes centralized. Data could be collected on a production plant’s excess capacity, for example. This data can then be provided for other companies in the market, thus reducing the need for middlemen in the transactions”, Aro says.

This development in the market place could also lead to a situation, where various stages in the production process disappear completely.

“Traditionally products have been produced in large facilities, where they have been both fabricated and assembled. Through the rapid developments in 3D printing technology, the companies’ core competencies might be in knowing how certain materials are produced. This will change the companies’ roles in supply chains.”

Companies could offer this knowledge as a digital asset. In the best-case scenario, the customers would pay for a service instead.

“What this could mean, for example, is offering certain schematics for various products, and then mixing ingredients, such as metal alloys for the customers. They can then print the final product themselves as they see fit”, Aro says.

The choice between building ecosystems and becoming a part of one

Aro has consulted several clients in taking the first steps towards the Industrial Internet. According to him, there are several topics to be tackled before the companies can start thinking about the implementation of these intelligent systems.

The challenge for the companies is that the value of the solution is not necessarily seen in the beginning, but comes evident through experiments, measurements and learning. The companies might even need to offer incentives for the partners involved in their operations, so that they will too adopt this new way of thinking. This is especially true, when a company wants to lure other players in the ecosystem to start experimenting with solutions.

“Many companies think that the right decision is to build a solution, into which others in their business process will join. But the problem is that if everyone builds their own ecosystems, everyone also remains isolated.”

The companies must also consider if they want to build their own ecosystem for services, or if they should adapt their products to be compliant with other systems. For some, the best model might be to “join” multiple different ecosystems, especially if their own area of expertise is narrow.

“Many companies think that the right decision is to build a solution, into which others in their business process will join. But the problem is that if everyone builds their own ecosystems, everyone also remains isolated. Therefore, companies should first think about their key competencies in producing value in the future”, Aro says.

Another thing worth considering, according to Aro, is the variety of questions regarding how this business intelligence is achieved.

“Who are to be included? What will their roles be? What will the user experience be like? How will each of the partners create and gather value from the ecosystem? A lot of these things are often not taken into sufficient consideration before organizations start to build the platform for the ecosystem.”

Nanomaterials connect production chain components and reduce downtime

On top of the existing sensor technology and the tools for analyzing big data, the production facilities are also facing changes due to other technological advances. Among the emergent technologies are, for example, the different types of wearables and advanced optical material scanners.

For Aro, a good example of one of the ways through which performance can be boosted is utilizing nanomaterials.

“Combining nanomaterials and electronics to various products and thus improving machine-to-machine communication will make work more efficient. When each part of the production process can communicate with all the other parts, the downtime and waiting in processes will decrease”.

Due to the proliferation of cheap sensors and components, everything in the factories will become connected. When they are adapted into the system, the position or condition of equipment, temperature, or any of the desired values can be monitored, and this provides large opportunities in the whole logistical chain.

One of the recently discussed advancements in technology is augmented reality. Although Aro believes it has a place in the consumer markets, he remains a bit skeptical of its utilization in an industrial environment.

“I haven’t yet encountered a proper case with quantitative business benefits in which augmented reality is utilized in an industrial context. Manufacturers weigh costs to benefits very strictly in their operations. The value in the new technologies is found more in the way we change our thinking about production processes and our roles in them”.

According to Aro, getting started with Industrial Internet ecosystems can very well be fast and experimental, but this requires a lot of will, co-operation and stamina. Both internal discussions and brainwork, as well as collaborating with other companies in the production process are required for the ecosystems to flourish.

“Typically the best way to start is solving one selected use case, nothing more. That way you can control the costs and keep all the players focused on the common goal. If you start too big, the focus will disappear”.

Mikko Aro is the Head of Industrial Internet Business at Solita.

Image credit: RomboStudio / Shutterstock.com

Interview w/ Mikko Aro

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Managing change in the connected workplace

The move to the digital world has allowed us to create new value inside the workplace, but adopting the IoT on a wider scale poses a few challenges. Alexander Reay, Chief Digital Officer at Sodash and President of the Nordic IT Association, explores the role an organization’s structure and culture play in maximizing IoT’s potential for businesses. He also talks about the leadership issues that need to be addressed during this transformation.

The Internet of Things (IoT) is very transformative and is reshaping business models. This disruption entails a huge amount of internal change that needs to be addressed in an organization. Alexander Reay, Chief Digital Officer at Sodash and President of the Nordic IT Association, believes that the issue is connected to neither technology nor technology maturity. “It’s a leadership one. It’s about understanding the digital economy – or if you prefer, the platform economy – we’re moving into.”

This transformation through technology, he adds, is a cultural matter. “It’s the impact of how the business and the people in it work. When you’re moving systems into the cloud, the major issue is to actually lead or inspire people who are very much used to the traditional way of doing things to adopt this new method.”

Since digital transformation is something that effects every single part of a business, a leader can’t be expected to do this on his or her own and needs to invest into change agents.

Culture of change

“An organization needs to have a culture of proactive change and the individual spearheading it needs to have a completely systematic and holistic view,” continues Reay. “Leadership in larger enterprises, however, isn’t as agile and usually can’t cope with quick, radical change. By far, that is the biggest barrier in adopting new and better ways of doing things along with rigid old hat organizational structures and governance”

As companies are recast as digital enterprises, and organizations continue to adapt to the IoT and the new demands of managing the physical and the digital, this convergence mandates not only new skills but also different ways of working.

The role of chief digital officer (CDO) involves looking for business opportunities that have been enabled by the digital revolution. It also entails focusing on customers and how their needs might change because of technological developments. It is quite different to that of the chief information officer, whose job — though similarly complex — is more about following procedures and keeping a company’s IT systems running. By contrast, the digital role is to head the transformation.

“This is really a leadership understanding of the technology – how to use it, how to drive new value as result – not the technology itself. So forget thinking of IoT and digitalization as just new technologies.”

As Reay stresses, “This is really a leadership understanding of the technology – how to use it, how to drive new value as result – not the technology itself. So forget thinking of IoT and digitalization as just new technologies. For those companies that get it, digital represents an entirely new way of doing business, moving from using technology as a catalyst for efficiency or effectiveness into driving new value or even changes to entire business models, but most important, they are in the process of changing their corporate culture”.

Difference between network and community

To begin the work of digital delivery, the companies recruiting chief digital officers must break down the walls between the independent vertical structures in their organizations. Reay notes that since we’re used to really siloed innovation, “we’re just about starting to realize the potential of open innovation techniques. What we’re talking about is a completely seamless network.”

It’s one thing to have the infrastructure to create a network and fluidity – those are the technical aspects, according to Reay.

“The real value lies in using that network to create and foster a community or to look at it another way expedite a digital culture, and for that people need to be empowered. Being connected to somebody doesn’t mean that that individual is empowered to be able to add value or even inspired to do so, and that’s the difference between a network and a community, it’s about adoption rate – a network informs, where as a community acts. In a community, people are actively contributing and they’re empowered to do so. That’s why change right now is such a headache for large businesses: they are simply too siloed, lacking the ability to adopt new ways of working quickly enough.”

Security and privacy issues

Another barrier, not just in terms of operability or interoperability, involves security issues. Reay brings up privacy, which to him is an area that is very disruptive in itself. “We’ve got the EU coming out with changes and directives very frequently and cyber-attacks increasing in frequency. The move into IoT requires a completely new set of skills that are needed rather urgently, if you fulfill some of the data regulations,” he adds.

These directives, as well as the cyber security issues that result from having these systems over the internet, have yet to be fully understood because IoT is such a new area.

“Since the EU is putting in these directives, when these new things emerge, they do so within the context of a rigid government system that’s been used for eternity. The key in trying to find new ways of mitigating some of these risks is understanding what leadership roles are really needed.”

Reay observes that large organizations are now rolling out compliance managers across their business units. “This is simply not going to do,” he counters. “There needs to be a Chief Privacy Officer, someone who can run the show at a very single level inside the organization on a strategic level, we are not just talking about technology here. These individuals should be rising through the ranks from a legal perspective, and with heavy sanctions and penalties for privacy breaches, this role should under no circumstances be left to the CISO, CSO, CIO, or CDO’s responsibility”.

Collaboration between machine and human

With the usage or the ability to analyze such massive volumes of data, machine learning starts to play a role. Humans can’t analyze that amount of data, and to Reay, what’s interesting is the new value creation made possible by massive volumes of data collected from connected products and devices. This goes beyond efficiency, smart sensors or the ability to use the IoT to create more efficient productive manufacturing lines.

“For example, artificial intelligence (AI) could be used to process that data to provide insight, resulting in better informed rapid decision making. Doing so could organize a lot of these areas, from efficiency and uptime to the utilization of assets. The maintenance and management aspects are, right now, the areas where we’re going to see machine learning really utilized.”

Ultimately, Reay believes that everything comes down to a human-centric approach.

“What really stands out with the use of AI is that it makes us essentially more human. It’s the same as with digital transformations: it’s not the data we’re interested in. It’s how the data influences our decisions. The collaboration between machine and human is where the real innovations are going to start. The utilization of the interface between AI and humans is going to be where we will see how it is utilized to its full potential.”

Again, when we roll out the IoT, machine learning can be used to improve efficiency and uptime. But, as Reay concludes, “the real utilization is understanding how can we use machine learning to create a positive impact for humanity, the workplace and our customers.”

Alexander Reay works as a Chief Digital Officer at Sodash and is President of the Nordic IT Association

Image credit: Wichy / Shutterstock.com

Interview W/ Alexander Reay

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