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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.

Image credit: Jezper / Shutterstock.com

Sampsa Mattheiszen

Sampsa Mattheiszen works as ‎Product Manager, Digital Services at Konecranes

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IoT represents the breaking down of silos – but not without open source thinking

“Open source’s influence extends far beyond sharing code,” writes Gordon Haff in his Open Source article. According to him, open source thinking is needed if we want to improve and fasten the adoption of IoT solutions. In addition to this, there are several other developing processes running to make IoT implementation easier than it is. “A number of technology trends are coming together to make IoT solutions more practical: low-power and inexpensive processors for pervasive sensors, wireless networks, and the ability to store and analyze large amounts of data, both at the edge and in centralized data centers,” he writes. Read more of how the open source culture could create a better IoT at: http://opensource.com/business/15/4/better-internet-things-open-source-culture

Image credit: Gustavo Frazao / Shutterstock.com

Via opensource.com

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Industrial Internet enables information of actual usage of machinery

In the past, when you had a fault in machinery, you had to troubleshoot and go in to them to determine what the problem was. Industrial internet gives access to a lot of the information right at your fingertips with regards to the overall condition and status of the machinery. Key benefits that are brought are real-time information, actual usage as well as working statistics, says Jim Skowron, Regional VP Sales, Service Americas Region, Konecranes.

Interview w/ Jim Skowron

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Sensors, software and breaking down barriers

Equipment, platforms and components in the manufacturing industry are going through a rapid change as companies are capitalizing and investing in IoT-related technologies. Jerry Sorrells, product manager at Parker Hannifin’s Automation Group tells in Manufacturing Business Technology interview that these technologies are driven because of their “ability to use instant information to decrease the cost of manufacturing and increase operational efficiency.” According to Sorrells, with the help of IoT, basic processes like maintenance scheduling can be automated. As a result, the need for manual processing is greatly reduced or even eliminated. This would, for instance, have positive effects in automotive company’s production line.

Read more about Jerry Sorrells’ suggestions for IoT implementation in 2015 at: http://www.mbtmag.com/articles/2015/03/industrial-iot-2015-sensors-software-and-breaking-down-barriers

Image credit: Vladimir Nenezic / Shutterstock.com

Via Manufacturing Business Technology

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When worlds collide, innovations are born

Jarkko Vesa, Founder & CEO of management consulting company Not Innovated Here, has had the opportunity to get thoroughly acquainted with the possibilities that the industrial internet brings in different industries. As the technology enabling the required connectivity and data gathering has become more common, the question on everyone’s minds is how to find new business models from these new opportunities. Vesa thinks that the solution for finding new innovations lies in bringing in experts from very different backgrounds to the planning table.

According to Vesa, one of the most prominent opportunities for finding new ways of utilizing the technological advancements comes from the cooperation of start-ups, hackers and industrial companies, coming together and trying out new things.

“I’ve attended various industrial hackathon events and found that we have a lot of analytics tools and start-ups that offer great visualizations. This world can be swiftly utilized when the Application Programming Interfaces (API’s) are opened in a controlled manner. This way the traditional industries are able utilize the know-how of start-ups, and this is where the real potential lies.”

Vesa points out that the main idea is to bring applications of the consumer world and the industrial environments closer to each other.

“Opening the interfaces in the industrial internet enables this culture. That’s how we get into the same kind of buzz that’s been happening in consumer services, enabled by Google, Apple and other operators alike. What we’ve witnessed in industrial hackathons is that these two worlds can be quickly combined together.”

One of the developments in the industrial internet is that it improves user experiences in industrial environments and new solutions are introduced at a rapid pace.

“There is a lot of utilization of motion detection features nowadays, where a crane can follow its operator or a welding machine can follow the movement of the welders arm. A lot of the solutions involve intuitive interfaces, such as smart glasses, speech recognition or other convenient ways of communicating with machines.”

The world can’t be built in a day

Vesa sees that one of the keys to unlocking new business benefits lies in utilizing a start-up mentality in finding new solutions. He argues that in the start-up world, large questions are not solved all at once, but rather with quick and dirty and good enough type of solutions.

“This sort of lean thinking enables solutions to be developed through new versions and it also provides the ability to make changes faster“.

In Vesa’s opinion, there are certain similarities in the current state of the industrial internet to where the telecoms industry was in the late nineties.

“I wrote my thesis on the development of mobile technology back in the turn of the millennium. Back then the tele operator business resembled the traditional industries a lot. Everything had to be 100 per cent tested and confirmed. And suddenly these internet geeks started showing up and doing things with a good enough attitude. This was the focal thinking of the new generation – it doesn’t hurt if everything is not tested thoroughly. The ethos was that the users will give feedback and the product will be developed based on it. This sort of thinking horrified the traditional telecoms industry. They said that they can’t build critical systems with that sort of mentality”.

Vesa points out that security, safety and quality issues need to be managed, but adding a certain open mindset and courage to research and development will lead to innovations.

“Of course there needs to be the right places where to experiment. But in suitable places and instances, where risks are managed, the development teams should be given more freedom to try things out. I think the industrial hackathons are a perfect place for that – a sandbox to experiment in, within safe boundaries”.

Industrial internet or industrial intranet?

A lot of the new innovations around industrial internet have, however, focused on improving productivity on a machine level, ranging from predicative maintenance to wearables in an industrial environment.

In Vesa’s opinion, there will be a lot of innovations on a machinery level in the near future, but getting the solutions to the next stage in the evolution will require more time.

“The development stages are in order: machinery, factory, supply chain and ecosystem. In the large scale of things, I believe that in the beginning the first big success stories will be the interfaces, which are relatively simple and fast to build”.

This leads to the question, whether we’re really in the age of an industrial internet or an industrial intranet?

“If we look at existing business cases, we are managing, monitoring and operating on a machine level, but we’re only just moving towards conducting these on a factory level. Managing a whole supply chain or an ecosystem is still far away. There are certain challenges of systemic innovation, where the whole chain needs to reach a certain level for it to spread”, Vesa says.

What would need to happen in order to reach the level where the machinery of different operators or even industries could communicate seamlessly with each other?

“Recognizing things is one of the challenges here. The machines, equipment and products need to be equipped with RFID’s or some other tags. When bar codes came along, it was a huge step forward at the time. In order for them to spread it required a few big operators in retail who decided to start using them and demanded the supplying industries to start using them as well. That was back then, but which operators these days would be powerful enough to start driving this kind of change? Of course many industrial companies are in a position where they have their supply chains well managed and can use their power to implement new solutions”.

First step: Just do it!

When all the right components are in place, Vesa gives three key things to consider when innovating new business models or solutions based on the industrial internet.

“The first one – Just do it. Here in Europe, we have a tradition of planning for a long time before moving to execution, where as in the United States it’s quite the opposite. This affects everything we do, from legislation to standardization. I think the most important thing is just to get going”, Vesa starts out.

“The second point is about agility and speed. There has been an increase in the Lean and Minimum Viable Product (MVP) thinking, where one does not aim for perfection right away, but for a good enough version, which can be developed further based on the user feedback. The important thing is not to get stuck on the planning for too long, but to bring the product out and test it with the clients”.

“The third point regards cyber safety. It is pretty common that this takes first place and then security issues become a top priority. When everything is done very cautiously and thoroughly, there is a risk that the information security starts to drive the business itself. I claim that an information system cannot be developed information security first. You have to create it business first and then make sure all of the security issues are in order”, Vesa states.

“This is an area where it is very easy to start seeing threats everywhere, raising concerns and portraying scenarios where cranes are being high-jacked in ports or something similar. In reality, everything is planned thoroughly and the risks are managed, for example, using data diodes, which transmit information only to one direction”.

“The industrial internet is too important a matter to be left solely in the hands of the cyber security experts. It has to stay on the business agenda”, Vesa concludes.

Jarkko Vesa is the Founder & CEO at Not Innovated Here – Laboratory of Creative Destruction

Image credit: loreanto / Shutterstock.com

Interview w/ Jarkko Vesa

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