James Watt's double-acting steam engine in profile from the year 1769

For the UK, the IIoT is projected to add US$303 billion to GDP, under current conditions. However, by taking additional steps such as hiring people with skills related to the IIoT, this could grow to US$531 billion.
Technology innovations have always driven industrial revolutions. Steam powered the first, electric power - the second, and exponential increases in computing power the third. Combining this with the parallel evolution of communications technology, we see the development of smart connected devices which will drive the fourth industrial revolution. These devices create cyber-physical systems that offer profound opportunities for the future of industry across sectors, from manufacturing to automotive, energy to health.
Jet engines can alert their engineers when they need repairs. Sensors in food cartons can monitor conditions and issue alerts for potential spoilage. Systems can pull location and operational data from truck fleets to help reduce fuel consumption. At Marathon Oil refineries, employees wear a wireless device that tracks harmful gas exposure during a shift and allows managers to monitor where staff members are and their safety

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Technology creates an outcome economy

However, the IIoT offers much more than operational excellence. It will also lead to the creation of the “outcome economy”. This is where businesses undertake a fundamental strategic shift from delivering products – such as machinery or appliances – to becoming a service company. A recent Accenture survey of 1,400 executives from some of the world’s largest companies found that 84 percent of respondents believe the IIoT will generate new, service-based income streams for their organisations.
Take Michelin Solutions as an example. Connectivity and smart devices enabled the tire manufacturer to shift its business model from selling tires to offering tires-as-a-service. With sensors and intelligence embedded in the tires, their performance is monitored to ensure that problems can be addressed, fuel efficiency is maximised, and vehicle fleets are optimised.

The technology challenge: IIoT platforms

The switch from a focus on products to new models based on service poses a significant technology challenge. Organisations will need to design and implement integrated platforms that include a range of technologies such as cloud, embedded devices, mobile technology and analytics.
Platforms allow these different technologies to integrate and interact. As the complexity of those interactions increases, the design of the platform reaches a level of complexity above even major enterprise IT initiatives, such as ERP implementation.
Consider a piece of heavy machinery, such as a connected excavator. You need to push data through its sensors. You need to store that data and create algorithms that can assess the data that it is firing out. The resulting intelligence then needs to feed back to the driver through a wearable or other smart device. The good news is that the many platform requirements are the same for delivering the value of the connected car, industrial connected machinery, connected healthcare and the connected home. Platform elements used in one sector can be repurposed for another.

As technology leaders begin to consider these platforms, there are two important principles. First, they need to think about the usability of technology. Companies like Apple have set a new standard for usability and intuition. The industrial space needs to emulate that approach if its technology is to have any impact. Second, organisations need to consider technology risk and cyber security. The possible ramifications of an IIoT cyber attack are profound. Industrial plants could be damaged and life put at risk. Organisations need to dimension the threats and devise mitigation strategies. Some of the disciplines used in previous technology waves, such as mobile security, can be leveraged.

Accenture’s IIOT survey unearthed an interesting reality check in the midst of all the optimism. While it is encouraging that 84 percent of respondents see a future of new service-based income streams, it also found 73 percent who said their companies have yet to make any concrete progress in this area and only seven  percent that have developed a comprehensive strategy.

Now is the time to put that strategy in place and progress. While there are still uncertainties about how exactly the IIoT will impact many areas of business, the journey has begun, driven by very real and undeniable forces. The imperative is to begin to understand the opportunity and trial initiatives. In this way, once the promise of the IIoT bears out, organisations will have already built up momentum in their own situations, in their own organisations, and with their own people.  James Watt’s steam engine triggered off a seismic impact in the world economy. The IIoT will do the same.
Posted by Aidan Quilligan, head of Accenture’s Industrial Software Solutions Practice