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Though the age of enterprise IoT is reportedly upon us, organizations must shift their mindsets before living the IoT dream.
This theme echoed at this week's LiveWorx conference in Boston, where 5,000 professionals engaged in IoT gathered to discuss the potentials -- and pitfalls -- of a connected world.
"It's a slippery slope of transformation," said Jim Heppelmann, president and CEO of PTC. "Things will never be the same. The way we work, the way we live, the way we interact with everything ... it's a time of great change."
Seeing is believing: Bring on enterprise IoT
Ready or not, here it is: enterprise IoT. LiveWorx presentations and show floor demonstrations highlighted IoT successes, as well as measurable results.
Eric Schaeffer, senior managing director at Accenture, based in Dublin, Ireland, discussed a water utility company in the U.K. that, using sensors, analytics and real-time data to anticipate failures and respond to critical events, was able to reduce both Opex 6% to 8% and Capex 6% to 12% in less than six weeks, as well as achieve an ROI in less than a year.
Jim Heppelmannpresident and CEO, PTC
An aerospace manufacturer, Schaeffer continued, rolled out a proof of concept to reduce the complexity and time of installing cabin seats in an airplane. After trials at one plant, the company achieved a 100% quality rate, with 0% error rate, and cut installation time to one-sixth the time it took pre-IoT, and is subsequently rolling out the program further.
Schaeffer also explored how a European telco achieved 20% to 40% productivity gains by having its engineers and field technicians use Google-like glasses and mobile technologies, and how sensors in tires helped a pay-per-use vehicle company reduce fuel consumption by a half gallon per 62 miles -- up to $3,300 savings per truck, per year -- which equated to a 2% reduction in total cost of ownership.
PTC, which hosted the four-day event at the Boston Convention and Exhibition Center, showcased how IoT, virtual reality (VR), augmented reality (AR) and analytics will revolutionize the enterprise and the human experience both in Heppelmann's keynote and on the floor where attendees could experience them hands-on.
Heppelmann invited Terri Lewis, digital and technology director at Caterpillar Inc., to the stage to demonstrate how VR/AR on a XQ35 generator set helps clients and technicians diagnose and remediate issues quickly and easily. Caterpillar also uses AR/VR in marketing and sales; instead of bringing equipment to its clients -- which can be costly, if not impossible -- prospective Caterpillar customers can use VR/AR to see the product in full size and interact with it.
Heppelmann then invited up Eric van Gemeren, vice president of research and development at Flowserve Corp., based in Irving, Texas, to explain how VR/AR has helped his company give its clients actionable advice -- and prevent plant downtime that can cost upward of $1 million an hour -- thanks to data-gathering, machine learning technology on machines in plants.
Enterprise IoT hesitation
Despite the success stories and increase in adoption -- Jay Wright, president and director of Vuforia at PTC, noted the company's Vuforia AR platform saw an increase of 86% in projects in 2015 over the previous year -- enterprise IoT certainly isn't ubiquitous. Schaeffer noted in his presentation that while 84% of the 500 business leaders interviewed in a recent World Economic Forum survey believe IoT will disrupt the marketplace over the next five years, only 7% admitted to having a comprehensive strategy in place.
Even some of the attendees only have IoT on the distant radar, not in motion. For an engineer at the show, LiveWorx was just training. But at least it's helping, he said, "It's bringing me up to speed with what I will need to know."
Another attendee complained his company was still in the process of implementing computer-aided design (CAD), something he saw very little of at the show. This sentiment echoed when another attendee said Creo, PTC's CAD application, was largely underrepresented.
However, others, including William Hester, GIS business relationship manager, GPO at Whirlpool Corp., based in Benton Harbor, Mich., said the show has "validated that we're doing the right thing." While Whirlpool offers consumer IoT devices -- from washers and dryers to refrigerators and multicookers -- it is in the process of rolling out IoT to the company's plants.
"Just when you think you have the cloud figured out, you move to the next thing: IoT," Hester said. He said it took the 100-year-old manufacturing company four years to get to the cloud, but expects the IoT move to be a lot quicker, noting the importance of getting factories to be able to communicate and learn from each other.
Overcome the hurdles, or be left behind
Amid the success stories, the challenges of enterprise IoT were discussed at length. During a panel discussion, Harvard Business School professor Michael Porter, Colin Angle, chairman, CEO and co-founder at iRobot Corp., based in Bedford, Mass., and Heppelmann discussed the disruptions of enterprise IoT.
"[IoT] changes everything about marketing, sales, manufacturing, after-sale service procurement ... virtually everything," Porter said, explaining the lines dividing departments are blurring. And companies are having a tough time with it, he said, as "it's the first time we've had a major organizational change in the last 30 or 40 years."
Speaking with IoT Agenda after the session, Whirlpool's Hester underscored the scope of the change, noting that he is being met with resistance from plant managers hesitant to add new "IoT maverick renegade technology" in plants which are already "extremely efficient at producing products."
Another hurdle is the onslaught of IoT data. When Heppelmann noted the oft-cited statistic that only 1% of IoT data is actually used, Porter retorted the emerging role of the chief data officer will only continue to grow.
Porter also commented IoT is creating many enterprise strategy questions -- one of the most important of which is deciding whether IoT should be implemented in the first place.
"Just because you can do something doesn't mean it creates value for the customer, that they're going to pay for it," Porter said. "And if it doesn't, it's just going to raise the cost."
While PTC demonstrated VR/AR can transform the user engagement, the importance of consumer experience popped up multiple times across LiveWorx presentations. During a keynote, Adam Savage of Mythbusters fame, admitted he has a love/hate relationship with IoT, explaining while "the promise is amazing, so are the risks," especially those of security and, as an end user, being made to "feel like a product instead of a consumer."
Savage's co-host, Jamie Hyneman, added, "The stuff that is out there doesn't work. If something works, I'm all for it; there are a lot of really intriguing possibilities out there. But I'm such that I don't want to see something new come out that doesn't work," adding that half-finished products were unacceptable.
One additional change enterprise IoT adopters must prepare for is how it affects employees; Angle said employee characteristics will be changing.
"[IoT] affects the type of people an organization hires, where more than ever an employee's willingness to work in teams and collaborate is crucial," Angle said. "The silo rate of the individual performer has gone down in value related to the collaborative contributor."
Keynote speaker Joseph Gordon-Levitt emphasized this point during his keynote presentation, explaining while the technology behind his hitRECord platform was crucial, it was the building of community of collaborators that really made the company successful.
Enterprise IoT is now
IoT has the potential to be world-changing -- and if it isn't on your company's radar, it could be missing out on something huge.
Eric Schaeffersenior managing director, Accenture
"The shift is not tomorrow," Schaeffer said. "The shift is happening today. It will lead to significant change. It affects both demand and supply. And there is not one industry that will not be impacted by this change. Strategies which are focused on decreasing costs -- which many manufacturing companies have been focusing on up to now -- will be less effective than those focusing on putting out on the market new products and services ... To remain competitive, both companies and countries will have to be at the frontier of innovation in all its forms."
Hester told me, while there's no roadmap for enterprise IoT, "you can't keep your head in the sand on this thing ... IoT is the next ERP." He said he is excited for next year's show; so many presenters kept talking about the promises of IoT what's going to happen, he can't wait to hear what is actually happening a year from now.
Heppelmann summed it up, saying, "We're at a really interesting transitional moment in the industry. We're working on something big and really important. It's scary, it's exciting, it's difficult -- but it's something we have to do."