Ensuring the Value of Your Investment
by Adam Chose
The ability to connect smart devices seamlessly across networks to improve manufacturing processes and increase productivity has become big business. Multiple industries are seeing explosive growth in the ROI of IoT as research reveals it will reach $91 billion by 2023. That’s proof enough that major organizations view this fascinating and relatively new technology as an important strategic investment for the future of their business.
While it’s quite clear that IoT is here to stay, and that the ROI of IoT is strong, it’s still somewhat uncertain exactly how manufacturers will prove its return on investment and problem-solving capabilities. Beyond having a wow factor, research from McKinsey says as a new technology, understanding the implications of IoT’s bottom line impact has yet to be fully vetted and its benefits aren’t as understood as other, more established technologies like data analytics. But business leaders are abuzz with all the ways they envision it improving everything from operations and manufacturing processes to research and development.
Whether you are cautious about this growing technology trend or are diving into it head first, there are a few steps to help ensure you are investing properly and able to better measure IoT’s benefits.
Build a business case. The first step is creating a business case for the ROI of IoT that includes a full assessment of objectives. It’s critical to determine how an investment in IoT can help in areas like customer experience, new business models and incremental growth. Because the truth of the matter is no company should invest in anything that doesn’t show some sort of return on investment. Determining how exactly your new technology can help generate revenue or save costs, whether that’s in preventative maintenance or increased output, only benefits you in the long run. This type of exercise will eliminate hesitation and connect the dots for companies looking to expand and create new opportunities.
Utilize manufacturing intelligence. As many companies implement larger Industrial IoT projects outside of initial pilot programs, they’ll gain access to a high level of manufacturing intelligence. Along with the use of specialized algorithms, this raw information can be used to uncover valuable insights. These insights enable companies to implement positive change that results in a competitive advantage. For instance, improving quality benchmarking or cutting speed to market.
Identify your costs. This requires a deep review of initial costs, coupled with both direct costs and indirect savings. If your company has to spend $100,000 on an initial investment as well as has a new monthly expense of $10,000, but is able to save a specified amount in salaries and equipment annually, viewing it holistically like this enables you to better understand the long-term value that your IoT efforts brings to your business.
One thing is certain – IoT will enable continued innovation and improvements so do your due diligence upfront but be patient as the benefits are fully realized.
Adam Chose is Director of Sales for Corvex. Connect with him on LinkedIn here.