Industrial companies are planning to commit approximately $907 million annually to their Industrial Internet of Things (IIoT) initiatives, according to a new PwC report launched in coincidence with the Global Manufacturing and Industrialisation Summit (GMIS) in Abu Dhabi.
The Chief Information Officer’s (CIO’s) role in defining a company’s strategy has become more important than ever, the report affirmed.
In its latest report, PwC said that managing the transition to the Industrial Internet of Things (IIoT) will be a highly complex task, which CIOs cannot afford to miss out on. It points to studies that show that by 2020, companies will likely spend $1.7 trillion a year on the combined industrial and consumer Internet of Things (IoT) . That transformation to IIoT is materialising fast, cited a recent PwC Industry 4.0 Survey which found that industrial companies are planning to commit approximately $907 million annually to their IIoT initiatives. Those companies expect $421 billion in cost reductions and $493 billion in increased revenues annually from the implementation of IIoT, with 55 percent expecting a payback within two years.
The sheer size of the Industrial IoT opportunity, which PwC says far outweighs all expectations of the consumer oriented IoT, means that CIOs will have to take centre stage in leading a digital transformation that aligns strategy and technology with the manufacturing environment and the manufactured product.
Dr. Anil Khurana, Partner, Strategy & Innovation at PwC Middle East and the report’s lead author, said:”The IIoT will place huge demands on the CIO. It is indeed an opportunity that few will want to miss. First-mover status is critical to gaining a competitive edge as companies begin moving en masse to reap the benefit of digitization. Our research into the IIoT domain suggests that CIOs take six important steps towards their companies’ future digital transformation, which has been outlined at length in the report. These steps include key elements such as the development of a digital strategy, building capabilities and eventually, initiating pilot programmes.”
“Supporting the GMIS vision to promote manufacturing and industrial innovation; driving towards sustainable development; and contributing to wealth generation and prosperity, PwC has facilitated connections between enterprises of all sizes that are now embracing the 4th Industrial Revolution, or 4IR, and embracing IIoT. PwC has facilitated the development of the pilot programmes being discussed and presented at GMIS,” Dr. Khurana added.
Commenting on the report, Badr Al-Olama, Chief Executive Officer, Strata Manufacturing, and Head of the Global Manufacturing and Industrialisation Summit Organising Committee, said: “For the manufacturing sector, the Industrial Internet of Things is at the heart of 4IR. As PwC points out in this report, the CIO is the key driver in helping organisations to adopt IIoT, aligning business strategy with technology transformation. Their role is to ‘normalise’ innovation in large, complex organisations, drawing on a new capacity to intelligently connect people, processes and data through devices and sensors” ” For manufacturers, this creates the prospect of the digital factory where ‘smart’ manufacturing technologies are controlling energy, productivity and costs through real-time monitoring and application of data insights. PwC’s report sets out a roadmap for IIoT transformation, prepping the experts – including CIOs from leading global manufacturers – to put together a vision for manufacturing that is based on the 4IR technologies” he explained.