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How IoT is helping companies take advantage of new revenue streams

In this Q&A, Gartner analyst Eric Goodness explains how manufacturers create impact with connected devices

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Connected products create new opportunities for manufacturing companies to bond themselves with their customers, says Gartner analyst, Eric Goodness.

In a recent interview with DXJournal.co, Goodness talked about how the combination of IoT and manufacturing is helping manufacturing companies transform their processes and take advantage of new revenue streams.

DXJ: What are three digital transformation trends you’ve seen in manufacturing?

EG: The three digital trends that we’re seeing in manufacturing [include]:

  • Looking at applying IoT to operations to drive out inefficiencies and to improve asset performance
  • Applying IoT to the supply chain, again, to drive out cost inefficiencies and to gain more visibility there
  • the biggest trend, without a doubt, and where most of the revenue that we’re seeing being spent — rather than languishing in cycles of indecision — is the creation of connected products.

If you look at how manufacturers are looking at bringing connected white goods, connected industrial infrastructure, connected commercial infrastructure, connected consumer products that is by far the biggest use of IoT as an extension of the digital business technology platform that’s happening out in the marketplace.

DX Journal: Is the use of connected products where IoT technologies are creating the most impact within larger manufacturing companies?

EG: Today, it is creating the largest impact as it provides [large manufacturing companies] a new way to bond themselves with their customers, to help those customers better monitor and manage those big industrial assets that they’re acquiring from the manufacturer.

Related: Stepping into Digital with IOT – 14 Cases

And it also helps the manufacturers create a premium revenue stream from their ability to remotely monitor, manage and create performance-based service-level agreement (SLAs) with their industrial customer base that are buying those assets.

Service-based revenue is going to be far more profitable than actually selling the capital asset. It’s the creation of these connected products where we’re seeing manufacturers actually sell some industrial assets at cost or at a slight loss in favour of these performance-based long term contracts, with the maintenance and support of those assets that they’re selling.  

DX Journal: Are there any areas within manufacturing companies that are easier than others to implement IoT?  

EG: The real bifurcation that we’ve seen in the marketplace is simply those environments behind the four walls of the factory that are security instrumented and where there is significant safety of life concerns, or where there is significant intellectual property at risk from external breaches. An environment where those concerns are less so, we are seeing IoT slowly make it to the factory floor.

[Download] Stepping into Digital with IOT – 14 Cases

There are initiatives such as analytics of production lines or plants where they analyze cold data in the cloud or within the corporate data lake to find inefficiencies in production or applying an optical-visual inspection on a production line to drive out errors. But in process manufacturing where there’s hazardous chemicals or other safety of life issues it’s going to take a long time before IoT makes it within the four walls of [those] factories.

DX Journal: What are some ways that large manufacturing companies have been keeping up with emerging technologies?

EG: We’re finally starting to have the conversations where the operational technology (OT) side and the IT side of the manufacturer are coming together. We’re seeing more investments in centres of excellence that have representatives from operations and engineering as well as the CIO part of organization, and sometimes even from the product side that reports within the CTO of a manufacturer.

Inside of organizations, we’re starting to see these multi-business unit, multi-stakeholder centres of excellence work to identify short lists of relevant vendors. It’s a slow slog for these organizations to come to agreement, but it’s very encouraging to see these organizations work together.

DX Journal: Is it possible to predict what the next five years will look like in the manufacturing industry?

EG: Over the next five years, we’re going to see a lot of IoT manufacturing convection currents. IoT is going to be subsumed into other recognizable services that vendors offer to their manufacturing clients. For example, vendors are going to be increasingly introducing their own platforms to provide manufacturers with fully-formed OT and IoT solutions. Traditional OT players, like GE, ABB, Honeywell, and Rockwell, are looking to present their own IoT platforms, alongside their legacy conjunction control and automation capabilities. While players like SAP, Microsoft, and Oracle are leveraging their IoT platforms with their manufacturing execution systems, asset performance management systems, or enterprise performance management applications.

[Download] Stepping into Digital with IOT – 14 Cases

We believe that IoT is going to become an embedded capability of all legacy platforms in platform-as-a-service and integration capabilities. There is going to still be a sector of the market where you see smaller niche IoT specific companies, but if you consider yourself an SAP, Microsoft or GE, why wouldn’t you at least consider participating in a closed ecosystem of value that has a natural and virtuous integration path to make it easier to deploy IoT to your business problem.

This interview has been edited for length and clarity.

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Manufacturing

IoT + PLM = Product Intelligence: An Equation that Delivers Monetization Opportunities

In the equation IoT + X = Intelligence, what role does product lifecycle management play as the X factor?

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Consumers are fickle. 

Today’s hot must-have can easily fade into obscurity tomorrow. Most products don’t even make it out to the playing field, and instead languish on the sidelines. The B2B world is not much different. Thanks to the Internet of Things (IoT) however, manufacturers are gaining a better peek at the product lifecycle beyond their distribution warehouse and leveraging that intelligence to their advantage.

Case Study: Advancing Smart Manufacturing Operations Value with Industry 4.0 Platform

PLM matters

More often than not, manufacturers make educated guesses at what consumers want. Sure they rely on surveys and calibrated focus groups but too often they’re still skating on thin ice with data snapshots. Product manufacturers rely on past sales records, future trend forecasts and hope design comes up with a nifty new gadget. They then execute strategic marketing and finally keep fingers crossed for best outcomes. 

The problem with such an iterative pattern is that the process is more or less opaque once the product leaves the manufacturer. Today’s product lifecycle management delivers much-needed transparency to the trail a product follows not just from concept and design and sales but on to how the consumer actually uses and disposes of it. 

And it does so through IoT. An IoT-embedded device relays product information to the mothership long after it has left the point of sale so manufacturers can gain insight into usage patterns and other data. While PLM has always followed the trail of breadcrumbs that products leave, IoT now allows for a longer and more useful trail. 

[Download]: A New Approach to PLM

IoT + PLM

“With IoT live product feedback has become possible. The [data] gap that existed between when we have sold a product and when someone discards that product…that gap has now been connected by IoT,” says Jagmeet Singh, Director, Connected Products, at Cognizant. 

Businesses use cloud technologies to analyze the data that IoT-embedded products spit out and reap a whole host of benefits. Manufacturers access instant feedback about feature design – in an age of user-centered design, this is a big deal – and price points. Product design now needs fewer reboots and manufacturers can produce with more confidence.

The introduction of IoT and associated data analytics expanded the use of Product Data as a Service (PDaaS), where larger sets of metadata about products are now available to be harvested, right from raw materials used, to manufacturing processes to quality control and beyond.

Simply by following the IoT trail (and obtaining all-important user permission), manufacturers can monetize information about product usage to secondary vendors who might benefit from related information. A computer manufacturer, for example, can sell valuable information about the heat exchanger, the battery, the Bluetooth connection to satellite providers who can use this as intelligence for their own sales and marketing promotions.

IoT breathes new life into PLM extending the line beyond the four walls of the warehouse to the real world where live data from every user shapes future product iterations.

IoT + PLM = Customer intelligence. With sharper data based on usage patterns, manufacturers can anticipate customer needs better and deliver they want. The result is more revenue and less waste. IoT lets PLM realize its full potential.

[Download]: Real Estate Manager Goes Digital

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Manufacturing

IoT + big data analytics = operations intelligence: An equation that draws a better picture

In the equation IoT + X = Operations Intelligence, what role does big data analytics play as the X factor?

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Global pressures to decrease energy consumption and the speed of business are accelerating the call for new ways of delivering efficiencies. 

What if a fridge could tell us that the food it stores was going to spoil in a day? What if buildings could cut down heating costs by selectively turning down the heat depending on occupancy? For a fridge to “talk” in this way, it would need a way of measuring the parameters that indicate data spoilage. The Internet of Things (IoT) delivers just that.

Case Study: Advancing Smart Manufacturing Operations Value with Industry 4.0 Platform

With IoT, everyday “things” such as refrigerators, machines, warehouses, televisions, washing machines, broadcast data about their health through outfitted chips and sensors. So large is this data deluge, that the IoT market is expected to grow at an astonishing 24.7% and reach $1111.3 billion by 2026.

Big data analytics

We need big data analytics to harvest this torrent of IoT information in useful ways. Simply spitting out data is not enough, big data analytics help companies make sense of the data and thereby deliver intelligence.

The classic definition of big data is that it presents in three “Vs”: large volumes, variety and high velocity. So the concept of big data is not new, even if this set of parameters has evolved since the early 2000s when it first took root. The introduction of IoT, however, has increased the number of sources which contribute to the data dialog. Whether or not these data points contribute to a symphony or merely create a cacophony depends on data analytics.

Case Study: Advancing Smart Manufacturing Operations Value with Industry 4.0 Platform

“Big data provides context to a world in which IoT is working,” says James Jeude, Vice-President and Practice Leader of Cognizant’s Digital AI & Analytics Strategic Initiatives Group. “As an industry we have solved the volume problem [of big data], where today’s big data really matters is that it delivers on variety. It is variety that really matters [for intelligence] at this point.” 

Take the example of a refrigerator in a grocery store. To know when the compressor is about to break, the store can measure both the refrigerator temperature and the current input. The higher the electric current flowing to a refrigerator to maintain the same temperature, the more likely it is to fail. These two indicators might be the canary in the coal mine but IoT and Big Data allow a variety of additional efficiencies. Measuring the gases emitted by the food can be a window into when the food might spoil; measuring outside temperature and humidity might tell us acceleration patterns of food spoilage. The number of times a grocery store refrigerator is opened and closed is also a useful parameter to measure.

Case Study: Advancing Smart Manufacturing Operations Value with Industry 4.0 Platform

The promise of big data analytics is that it allows a whole new range of IoT variables to participate in the conversation. 

IoT facilitates information gathering from more sources so everyone who contributes to a situation gets a hand at the table. Data analytics leverages this IoT data to deliver a more comprehensive picture of the situation. The net analysis is more nuanced and more valuable. Indeed IoT + Big Data Analytics = Valuable Intelligence. 

With IoT and big data analytics, you no longer  have to picture an elephant by merely touching its ears and tail. You can now access more touchpoints to visualize the whole animal.

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Manufacturing

What you need to know if you’re attending AVEVA World Summit

AVEVA World Summit is where the most innovative industrial executives from around the world gather for an exclusive opportunity to network with 400 global digital leaders across diverse sectors. 

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AVEVA World Summit is where the most innovative industrial executives from around the world gather for an exclusive opportunity to network with 400 global digital leaders across diverse sectors. 

The summit is an opportunity to discover how these leaders and Cognizant — a Platinum Sponsor — are transforming the entire asset and operational lifecycle.

To help you prepare, here is a selection of articles, case studies, ebooks, and clips from Cognizant, discussing digital transformation:

  • Learn Cognizant’s 4 key success factors to Industry 4.0 transformation. For starters, lead with strategy, not the technology. Watch the video here.
  • AI, Machine Learning, and IoT are ensuring the efficacy and efficiency of one of the most demanding engineering projects in the world. Learn how Cognizant helped Norwegian offshore engineering firm Kvaerner adopt these digital technologies.
  • The promise of Industry 4.0 is compelling, but for many traditional manufacturers, the reality is less than ideal. In this new Cognizant report, find examples of manufacturers that are navigating the shift.
  • It’s all about speed: Insight from Cognizant on how 5G will transform the business sector and create a leadership race for data intelligence.
  • Not all smart factories are created equal: Cognizant takes stock of the state of IoT intelligence, and what industrial organizations need to ensure both digital maturity and success. Read more here.
  • The many touchpoints of IoT connectivity allows AI to really shine, and prove its value to manufacturers in the form of proactive preventive maintenance, says James Jeude, VP in Cognizant’s Digital AI & Analytics Strategic Consulting Group, in this piece.
  • The human factor in IoT intelligence is key: Connected employees can “dynamically manage situations as they change,” explains Cognizant’s AVP of engineering and IOT solutions Phanibhushan Sistu.
  • The leap to IoT is a necessary one for your organization. This Cognizant ebook looks at 14 such businesses that jumped confidently into the digital future.
  • It took less than 12 weeks for Cognizant to implement an IIoT platform for a leading global industrial manufacturer. Get the case study here.
  • Without the duo of IoT and the Digital Twin, your organization is living in a black-and-white outlined world, in terms of operational intelligence. Color it in, get more accurate predictions, and fully realize potential.

Aveva World Summit takes place September 16-18, at Marina Bay Sands, Singapore.  

One session to highlight? “Digital Transformation in Hybrid Industries,” featuring Cognizant’s VP of IoT and Engineering services, Frank Antonysamy. This session will examine the benefits of digital transformation, and addressing challenges through a sustainable platform that can adopt best practices, continuous improvements, and grow with the business.

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1 download. 14 Case Studies.

Download this report to learn how 14 companies across industries are demonstrating the reality of IoT-at-scale and generating actionable intelligence.

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