Manufacturing is undergoing a sea change. Product manufacturers across every sector are re-evaluating the very form, function, and business models of their products. The ability to connect objects to the Internet, monitor their existence, and leverage data and software to deepen insights and interactions with those products, is transforming the entire manufacturing sector.
According to a recent study we conducted with the Xively team 4 out of 5 product manufacturers are jumping into the IoT at some phase. And the impact of IoT knows no boundary and adheres to no single market. Just as the Internet has impacted businesses across every industry, vertical, size, and geography, so too is the Internet of Things. Of the companies researched, the respondents represented a wide range of industries and business types from industrial machinery and consumer products to building infrastructure and utilities and energy. There is no doubt that we are the precipice of a major shift in manufacturing.
S o why are Manufacturers Connecting Their Products Anyway?
The benefits manufacturers stand to gain by connecting their products are manifold. Our research asked product manufacturers what they anticipated as the single greatest benefit benefit resulting from connected products deployment.
Exhibit Title: Most Anticipated Benefits of IoT
The answer: ‘increased efficiencies.’ When connected product data is properly managed and analyzed, efficiencies occur across multiple business functions. Indeed, our data found that for those that had deployed connected products, 92% reported efficiency improvements across their business processes and services.
Manufacturers are also justifying IoT investment with a promise for greater customer and product insights, which theoretically inform better support for both, and happier, more loyal customers. With this context, tremendous activity in the manufacturing space is hardly a surprise; for ‘traditional’ manufacturers of analog products, product and customer visibility often end at the point of sale, or perhaps a focus group.
Interestingly, our research found that just 6% anticipate new revenues as the single greatest benefit of IoT yet over 90% saw improvement this in this area. Comparing anticipated benefits to those benefits product manufacturers that had already implemented reveals a compelling finding — approximately nine out of ten reported improvements across every single category!
Understanding the Benefits is Only the First Step
Product-centric companies must now think beyond the physical form of the product and consider how the data, function, and context of the product create new value through insight, services, and interactions. They must transform from product-oriented business models to service-oriented business models, enabled through product data. This is, understandably, a fundamental hurdle for traditionally product-centric organizations to overcome.
And even as more and more manufacturers are beginning to plan their connected product deployments, our research reveals a deeper finding— and IoT solution isn’t complete once a product is connected, rather it requires ongoing support and management across the entire lifecycle of the connected product, its data, and perhaps most importantly, how both can better support the customers who engage with them.
Check out the full report here.