by Andrea Greene
- Marketing & Communications Officer
Manufacturing companies have slowly but surely become aware of the potential for process improvement and cost reduction that the Internet of Things (IoT), with its connected objects, is offering to them. Effectively introducing IoT solutions in the workplace, however, requires a considerable investment. This has led some manufacturers to set up their own IoT Factory, as an internal service provider or with a view to production for customers. Apart from boosting the success of their IoT projects, this bold but wise move also serves to increase the profitability of their IoT investments.
IoT solutions have demonstrated their virtues in terms of performance, productivity and attractiveness to businesses. So much so that, according to Gartner, by 2020 more than 65% of companies will have deployed their own connected objects. But despite impressive growth forecasts – approximately 20% between 2015 and 2020 – the IoT market is still in its infancy.
Significant hurdle: profitability.
One significant hurdle holding back the full-scale deployment of IoT solutions and keeping them from passing the experimental stage, is a perceived lack of profitability, at least in the short term. Adopting an IoT approach can indeed be quite an expensive process and must therefore be supported by a strong sponsor. Above all, it must be a clear part of the company’s strategy, fostering innovation and instilling a real culture of change within the company.
Between the projected potential of IoT solutions and their actual profitability, the gap can sometimes be wide. To begin with, there are high development costs to be considered. And although the connected objects themselves have recently been democratised and prices have dropped significantly, by the sheer complexity of their very nature they remain rather expensive. Last but not least, companies also need to take into account that other major expense of IoT projects: maintenance costs, which frequently exceed the cost of the device itself.
But even if IoT projects have to go through experimental phases within a limited scope, their main objective is to lead to large-scale projects. It is, therefore, necessary to be able to qualify the impact of a project very early on and to be able to move quickly from that experimental stage to a full-scale deployment. The IoT Factory facilitates this process in its entirety, from the initial launch of the project to driving it towards industrialization.
Managing a true IoT strategy.
As a real factory that can prototype and produce industrialized components, the IoT Factory is a separate entity within the business, pooling all resources that support and accelerate IoT projects. Its main objective is to facilitate the industrialized, cost-controlled production of connected solutions intended for clients or internal services within the company. These solutions allow businesses to reinvent their way of operating.
The IoT approach conveyed by the IoT Factory cannot be limited to a few isolated initiatives. On the contrary, it must be part of a global innovation strategy that is clearly decided upon and advocated by the company. Moreover, in order to have a real impact, setting up an IoT Factory also requires adequate funding.