Three trends inside a trend – where is industrial internet heading next?
Industrial internet has gained widespread attention as a global megatrend. Now it is time to analyze the prospects more closely, as there is no consensual point of view on how to convert the benefits of the new wireless technology into profitable business. At the moment, three sub-trends can be detected. In addition, the strategy of the most successful companies seems to be simple: it is all about trial and error, writes Sampsa Mattheiszen, Product Manager, Digital Services at Konecranes.
Over the past few years, the industrial internet has claimed its place in many companies’ research and development agenda. The possible benefits of the new technological revolution are generally well understood and the quest for increased productivity, automatized processes and enhanced security, for instance, is going on.
However, when an emerging trend becomes a buzzword, an analytical mindset is indispensable. In other words, in order to take advantage of the ongoing technological progress one must look inside the trend. What kind of sub-trends, mechanisms, success stories and developments are taking place within the big picture? What do different actors and stakeholders think about the phenomenon and how do they respond to the changes in their business environment?
In the following paragraphs, I will examine three recent trends of the megatrend. There is already a significant business going on, but future prospects are also being formed. Who will gain – and how?
1. The divide in three – where is the business?
Step by step, key players in the field of the industrial internet are taking shape. Basically, the actors can be divided into three groups: tech-oriented solution providers, service producers and process developers and, finally, end users. They all see the future possibilities and challenges from a different perspective.
For the moment, the flourishing business takes place mainly among the first group. It consists of the developers of digital solutions, which provide the solid technological foundation for the industrial internet. In this category coding and software development, in the form of a mobile application, for instance, is of the essence.
There is a growing market for technological solutions and the providers are becoming more and more professional. Their clients are in focus: the second group of companies take advantage of recent digital solutions, and they are aiming for boosting their own performance or providing more rationalized services to their customers.
For the time being, the enterprises in the second category are few, but the emerging front runners have adopted a functional strategy in convincing the end users of the benefits of data collection, analysis and automated actions. However, this third group of actors in the field is far from being homogeneous, as the second sub-trend shows.
2. The increasing polarization of customers – what is the solution?
The polarization of the end users is a recent, yet gathering tendency and the dividing line between the parties is clear. One part seems to be enthusiastic about the future possibilities of the industrial internet, while the other part is more reserved and risk-averse.
The enthusiasm is easily understandable since the wireless connectivity enables many advantages in productivity. The core question is, why some customers feel reserved on the threshold of a new era? It is not unusual that agreements between companies in some industries forbid data collection, remote controlling and internet-based solutions. This is the case in car manufacturing, for instance. In other words, in some industries there is a thick firewall, which prevents the spread of new intelligent solutions.
“The collaborative partners must build a mutual trust and respect by sharing as much collected information as possible, since it is the only way for future development.”
According to our analysis, openness and transparency are crucial in overcoming these reservations. The aim and significance of the available technical and digital solutions must be articulated openly to the customer. In addition, one of the most important notions is that the collected data must be easily usable and simultaneously accessible for the service provider and the end user. The collaborative partners must build a mutual trust and respect by sharing as much collected information as possible, since it is the only way for future development.
3. The front runners of industrial internet are named now – how to be among them?
The early winners of the industrial internet were software producers, who enabled the whole phenomenon. However, the second step of the trend is just around the corner: the front runners of the industrial internet are named now. How to make the most of the new technological revolution?
Two common denominators define the most successful companies in the field. Firstly, their business model includes, for instance, both services and devices, manufacturing and maintenance. Secondly, the companies have injected a totally new attitude in their DNA of doing business.
The secret is that success equals a simple strategy of trial and error. Granted, the emerging front runners have made courageous investments considering the technological advancements. Nevertheless, if the direction has gone awry, they have plainly changed course. If one wants to capitalize on the new way of doing things, one must accept the success as well as flops as part of the process.
In practice, new solutions are making more and more data visible and discoverable. However, the benefits remain limited, if there is a lack of sound strategy how the increased amount of data changes one’s behavior or action. If a company is able to notice and solve the puzzle, the probability of success grows significantly. Another example could be a new platform, which unintentionally overlaps with an old one, for instance. Firstly, the loss in efficiency must be realized. Then it is time to take one step back and integrate the platforms in order to find a perfect synergy and effectiveness.
Trial and error is the only way to learn how the industrial internet really works. To put it differently, it is about constant experimenting, monitoring, fine-tuning and, most importantly, learning. Of course reflection and analysis are crucial ingredients in building know-how, too. Still, the future of the industrial internet belongs to those who are courageous enough to challenge themselves.
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