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Research Programme 2018: IIOT on Land and at Sea

Enterprise

Humans are consuming more. There are more of us than ever, and we have become accustomed to new technologies and the greater access to information they bring to our lives. For businesses in our major industries – agriculture, energy, maritime, mining and transport – this is having a significant impact. Producers need to optimise their cultivating and harvesting processes, manufacturers need to trace goods from initial extraction to their final destination, and suppliers need to provide more information about the goods that they deliver.

Data, generated by smart technologies like the Industrial Internet of Things (IIoT), is enabling these changes, and for businesses engaged in these industries, it has become the key differentiator to their competitors. Every business needs to collect data effectively in order to create new efficiencies to pass onto customers, before others beat them to it.

This 2018 research is focused on understanding the ways that IIoT is affecting the global supply chain and the way in which organisations from the agriculture, energy, maritime, mining and transport sectors operate.

It is clear from the findings that while some sectors, notably maritime and transport, are steadily forging a path to a more connected and digitally-enabled future, others are lagging behind.

Emerging trends

Our key barometers for IIoT success consider organisational approaches to adoption, skills, security, data usage, connectivity and IIoT technologies, and investment and ROI. Later in this report we will unpick the trends by sector, but viewing the supply chain as a whole enables us to understand its current status and where constituents need to collectively work together to improve its efficiency.

53%

of businesses are deploying or trialling IIOT to monitor energy and fuel consumption

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Adoption

IIoT adoption is accelerating rapidly. With over a fifth of businesses surveyed reporting full adoption and a further quarter reporting that they were in the trial stage of IIoT deployment, it is clear that the technology is a major focus for businesses across the global supply chain. There are a number of drivers for IIoT adoption, the most significant being improving resource efficiency, monitoring environmental changes and improving health and safety.

These drivers will enable organisations to create leaner business models and operate with greater sustainability and less impact on the environment, as well as improving working conditions for their staff. However, adoption levels are inconsistent across the sectors surveyed, with energy and mining showing much lower levels of adoption than transport and maritime. Supply chains must be connected from end-to-end to operate with maximum efficiency, and if certain areas are not gathering the necessary data to identify these efficiencies, businesses will struggle to use IIoT to optimise the supply chain.

21%

of respondents have fully deployed IIoT-based solutions

46%

of businesses cited improving resource efficiency as a key driver for IIOT adoption

Skills

The skills gap has emerged as one of the key barriers to successful IIoT deployment. A lack of in-house skills was cited as the top barrier to IIoT deployment, higher than other issues such as cyber-security risks and high costs.

The organisations surveyed reported requiring additional staff with expertise in security, data science and analytics and technical support, as well as staff to drive the strategic development, management and deployment of IIoT. Without these skills in place, organisations will struggle to make best use of the data they gather, which will ultimately hinder the transformative role that IIoT can play in the global supply chain, limiting the flow of data across multiple businesses and industries.

To plug these skills gaps and ensure successful IIoT solutions, organisations must look to external partners with the specialist skills and expertise to provide the core competencies necessary for IIoT.

74%

of businesses report using external partners to bridge the skills gap and assist with IIoT development

Security

With almost all organisations facing security challenges in the deployment of IIoT solutions, it is critical that businesses take comprehensive action to bolster their defences. External cyber-attacks are causing most concern to businesses, followed by poor network security and data mishandling or misuse by employees.

To protect against these threats, organisations are training their employees on IIoT security best practices, upgrading existing security technologies and investing in new security measures. However, some sectors are adapting its challenges better than others. Energy and transport are the most confident in their approach to dealing with the IIoT security, while more challenged agriculture is looking to third-parties for help.

65%

recognise that their cyber security should be stronger

45%

of businesses are focusing on training employees on IIoT to address security concerns

Data Usage

It is clear that while there is now plenty of appetite for the various benefits of IIoT-produced data, the reality is organisations are some way off where they want to be. Better decision making, increased internal visibility of data and greater supply chain insight are some of the potential data-enabled benefits with large disparities between what has been achieved so far, versus what organisations hope to achieve in the future. All three will be critical to an organisation’s ability to thrive in the supply chain of the future.

Our research found that generally the closer a business was to the consumer, the stronger its data strategy was. Organisations need to focus on developing data strategies to foster effective sharing, analysis and security, to ensure that they achieve these goals.

Connectivity and IIOT Technologies

Robust, reliable connectivity is critical to the success of IIoT solutions. Without the constant transmission of data gathered by connected sensors for analysis in real-time, organisations will not gain full value from their IIoT deployments. Satellite networks are forming a core part of the connectivity mix that most organisations are adopting to transfer their IIoT data, alongside radio, cellular and fibre networks, providing complex, multi-national supply chains with reliable coverage to enable the constant transfer of data.

Investment and ROI

With the acceleration in IIoT deployment, businesses are investing more and more of their resources into the development of IIoT solutions. With 8 per cent of IT budgets earmarked for IIoT over the next three years, businesses are expecting significant returns on their investment with a 10 per cent reduction in costs and a 5 per cent lift in turnovers expected at the end of this period, and more by 2023.

However, the varying levels of investment seen across the sector puts the potential for IIoT to revolutionise the global supply chain under threat. If one link in the chain does not have sufficient capacity to gather and transfer data, that can interrupt the flow of information and dramatically reduce the efficiency of the supply chain. Energy is set to lead the way in net investment with agriculture investing the least, while generally larger enterprises plan to invest a higher proportion of their IT budgets demonstrating their commitment to the technology.

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Download the "Industrial IOT on land and at sea" White Paper.

 

About the research

The Inmarsat Research Programme is now in its second year. This 2018 research is focused on understanding the ways that the Industrial Internet of Things (IIoT) is being adopted by organisations from the agriculture, energy, maritime, mining and transport sectors and the role of satellite connectivity as an IIoT enabler.

In May 2018 Inmarsat commissioned Vanson Bourne, a specialist technology market research company, to interview 750 respondents about their use of, attitude to and predictions for IIoT within their organisation and industry.

Respondents worked for organisations with at least 500 employees and have either decision-making or influencing responsibilities for IIoT initiatives. However, the profile of maritime respondents is different, in that 46 per cent worked for organisations employing fewer than 500 people. 

Respondents were divided evenly between five target industries – agriculture, energy, maritime, mining, and transport – and a sixth category that included a collection of industries. This ‘other’ category was included so that we could draw conclusions about IIoT within the broader business community.

2018 Research Programme Respondents by Sector

The geographical mix of respondents, which were sourced from throughout EMEA, the Americas and Asia-Pacific, provided us with a global and representative picture of the market.

With a broad array of organisations canvassed – some firmly rooted in previous industrial revolutions and some very much responding to recent technological developments – the findings offer a barometer on the ways that these sectors are changing, thanks in no small part to IIoT.

2018 Research Programme Respondents by Region