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The quiet revolution of 2016

Fabio Vacirca, Senior Managing Director for Accenture Products, Asia Pacific | Dec. 22, 2015
As the excitement continues to build among consumers around the IoT, industrial companies are quietly reinventing and reorganising themselves.

If 2015 has been the year of the Internet of Things (IoT), 2016 will see its widespread industrial adoption creating the Industrial Internet of Things (IIoT), as connected technologies provide operational efficiency, automation and flexible production techniques.

IIoT can help manufacturing companies predict when machines will break down before it happens, eliminating 70 percent of failures in manufacturing. IIoT could also help increase productivity by up to 30 percent. Together with predictive maintenance, companies could achieve savings up to 12 percent while reducing maintenance costs by 30 percent.

Accenture estimates that IoT spending worldwide will reach US$15 trillion of global GDP by 2030 and the IIoT is quietly accelerating at an even faster rate. One simple illustration can be seen in the number of sensors shipped globally in the last three years, which has increased more than five-fold from 4.2 billion units in 2012 to 23.6 billion units in 2014.

A key area that is accelerating this trend, particularly for automotive and industrial equipment (IE) manufacturers, is a maturity in the adoption of embedded software. Smart industrial products and smart production in manufacturing, through connected vehicles all require embedded software to drive the connectivity of devices and sensors. This provides the intelligence and actionable insight that characterises the IIoT.

By adopting embedded software, companies will be able to improve operational efficiency from the connected and intelligent applications of machines, products and people, achieving productivity gains of up to 30 percent. In addition, embedded software provides the foundation for innovation and faster time to market.

In 2016, we will also see growth in what we call the "Outcome Economy," built on the IIoT. The shift is from selling products to selling measurable outcomes and this will redefine industry structures. A simple example is Accenture's participation in a cross-industry collaboration to explore the impact that technology could have. The result was the development of a wearable, digitally enabled device that puts muscular dystrophy sufferers in control of their environment by allowing them to use their brain waves to turn lights on and off or change room temperature thermostats.

For more advanced industrial companies, the adoption of IIoT will enable fully automated manufacturing allowing them to interact with a real-time supply chain and minimise talent shortages. With sensors and connectivity, further increasing the availability of data, industrial and automotive players will adopt the next wave of analytics to create agile and responsive business models that drive innovation and competitive advantage.

Accenture's research, Big Success with Big Data, also shows that 82 percent of organisations recognise that Big Data is a significant source of value and has the power to make their value chains more flexible and customer-centric. In 2016, we will see this gain momentum at an industrial scale. Accenture Technology Vision 2015's section on the Industrial Equipment Industry shows that 83 percent of automotive executives are planning to move toward 'real-time enterprise platforms and systems (including analytics platforms), while the personalised customer experience is a top three priority for 86 percent of industrial executives, and the most important priority of all for 33 percent of them.

 

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