With an influx of investment in digital factories, the playing field is changing and the ROI for digitizing production is becoming ever more apparent. However, restraints, such as company size and a disconnect between IT and OT, means the road to a successful digital transformation is one very few will be able to do alone. Partnerships are going to be key.
Cisco reported in 2017 that only 26% of companies had an IoT initiative they consider a complete success. This is an intimidating figure if you’re a small company that cannot spare the time and the resources to undertake an IoT initiative with the risk of failure.
As IoT tech matures, leading solution providers are developing connected applications that can be implemented to achieve specific outcomes in manufacturing and supply chain operations without major business transformation. In fact, the term “IoT” might not appear in the application name; the point is it’s connected. With the rise in cloud-based solutions, smaller companies that do not have IT departments can quickly implement connected solutions.
While a lack of IT capability might deter smaller companies from undertaking digital transformation, there are certainly major benefits to be gained by larger companies that have the capacity. However, the benefits that come with scale are often accompanied by their own set of problems, such as a disconnect between IT and OT.
The IT department may be looking to the future for enterprise-wide digital transformation using advanced (IoT and other) technology, while the OT side of the business wants reliable technology that can be implemented with minimal disruption. Each has its own favorite OT and IT suppliers with which they wish to engage.
Some examples of OT companies that have invested significantly in IoT and/or connected applications are: Rockwell Automation, Mitsubishi Electric and Honeywell. While these companies are often as big as or bigger than their IT counterparts, they tend to work at factory level rather than enterprise level, for security and technological reasons.
Meanwhile, big players in IT/enterprise software have strong IoT offers that allow existing users to incrementally adopt IoT. Some of the key players here include PTC, Oracle and SAP, with offerings such as cloud networks and IoT platforms and applications. Microsoft (with Azure) and Amazon (with AWS) offer extensive open, cloud-based IoT capabilities and an ecosystem of partners.
Cambashi worked with PTC and RTI as customers to complete its IIoT landscape research. Instead of leading with the technology or a digital transformation initiative, these enterprise software providers are offering industry-focused, packaged software solutions, delivering clear business value. These connected applications will greatly improve manufacturing.
We are now seeing OT and IT firms forming strategic partnerships to deliver on smart manufacturing and Industry 4.0 objectives. Microsoft’s initiative with BMW offers an “open manufacturing platform.” SAP is working with six other founder members to enable OT capability to be deployed across and between enterprises through the Open Industry 4.0 Alliance. While these initiatives are making it easier to bridge the IT/OT gap, an alternative route is through proprietary collaborations, such as between PTC (ThingWorx) and Rockwell Automation, Siemens and Volkswagen, and Oracle and Mitsubishi Electric. The partnership between PTC and Rockwell is a good example of the benefits of combining IT and OT, through the creation of the FactoryTalk Innovation Suite. This partnership delivers unprecedented visibility and control.
IoT is breaking down the walls between IT and OT, allowing for actual data to be fed back from the real world to the virtual world of IT. This convergence of IT and OT underlies why we now see so many manufacturers investing in digital factories, and many software providers competing to provide connected applications.