Building the Internet of Things. Kranz Maciej

      ■ The lines of business, as represented by the line of business (LOB) manager, are emerging as a major buying center for technology. LOB managers are concerned with business outcomes and look for business solutions, especially those that reduce cost, increase productivity, and – most importantly – increase profitability. They look for the ways to improve overall equipment effectiveness, production delivery times and throughput, asset uptime and increasingly target specific sustainability metrics. Line of business managers weren't among the primary beneficiaries of the first stage of the Internet, which focused on IT, service providers, and consumers. Today, however, LOB leaders are starting to harness technology to drive business outcomes. As a consequence, unlike the Internet's first stage, IoT promises not to be a technology-led transition; rather, it's a business-driven transition where technology is a tool to achieve specific business goals. Yes, LOB managers can create and spend budgets, but they're looking to increase both top-line and bottom-line results. For example, some manufacturing operations are reporting a 160 percent return on investment (ROI), a 20 percent reduction in cost, and a 75 percent reduction in network downtime from IoT. To LOB managers, such outcomes demonstrate a value proposition so compelling that they're willing to open up their wallets to fund such efforts.

      ■ The convergence of information technology and operational technology improving communication and efficiency. Remember when millions of people read John Gray's book Men Are from Mars, Women Are from Venus? This best-seller suggested that the frequent misunderstandings between genders make it seem as though men and women are from different, alien worlds. But it's not just men and women who appear to be from different planets. Today, every organization that has begun an IoT deployment is bumping up against a fundamental disconnect between IT and OT. In many cases, these two groups are “alien” to one another – they have separate technology stacks, network architectures, protocols, standards, governance models, and organizations. IT/OT convergence is the solution, yet it didn't begin to happen until recently. Perhaps it takes a prolonged downturn, followed by a lackluster recovery, to make this happen. Alternatively, maybe the emergence of IoT multiplies the networked connections among people, processes, data, and things to the extent that it compels the worlds of IT and OT to converge out of necessity. The key driver, however (as shown in powerful use cases we will discuss later in this book), is the need for the data to flow between plants, enterprise infrastructure, and the cloud.

      Such a need forces IT/OT convergence at the technological, architectural, and organizational levels. Of course, with this convergence comes a culture clash. Each organization has a long litany of complaints against the other. And each has completely valid concerns, all of which have to be resolved quickly. (As we mentioned, Harley-Davidson's solution to this challenge was to put representatives from both teams together in a room and not let them leave until all of their issues were resolved.) Despite the potential for a culture clash, over the past decade or so, OT and LOB functions have increasingly adopted IT-like technologies, such as Ethernet/IP and even cloud services. A 2014 Cisco study by Andy Noronha, Robert Moriarty, Kathy O'Connell, and Nicola Villa titled “Attaining IoT Value: How to Move from Connecting Things to Capturing Insights” found that both IT and OT leaders now recognize the need to share responsibility for IoT solutions, although they may still need to negotiate decision-making authority over each stage in the adoption process.7 It also helps that increasingly IT organizations report to the LOBs, further aligning the technology and business agendas across the enterprise.

      ■ The proprietary/specialized technologies moving to open standards. In the last two decades of the 20th century, the manufacturing industry went through the so called fieldbus wars, where several camps of vendors fought to establish their proprietary technologies as de facto communication or security standards for the industry. In the aftermath, a bunch of overlapping semi-standard technologies (including proprietary extension to open standards) was embedded into products locking customers into specific sets of vendors. Thus, despite the initial good intentions, the industry further diverged from common standards. Add to that a large number of existing single-purpose specialized or proprietary legacy protocols and the result was chaos, higher costs, little innovation, and Balkanized market. Since then, however, an increased number of vendors started to embrace standard and unmodified Ethernet and IP technologies and integrate them into their offerings. Today, most of the end-devices have Ethernet interfaces and the momentum is mounting to establish common truly open standards in the industry. We see the same transition starting to happen in other markets too, from transportation to healthcare to retail. The customers are increasingly demanding open standards and interoperability. In addition, the IT and OT vendors are joining forces to evolve existing horizontal standards to address the OT needs and are adopting open standards in vertical standards bodies and consortia. According to the Cisco report cited earlier, by year 2020, there will be as many as 50 billion connected devices.8 Whether the actual number ends up being 50 billion, 30 billion, or even 7 billion, these are still staggering figures. Not long ago, on a typical manufacturing floor, there were just a few connected devices for every engineer; now there are dozens of these devices and soon there may be hundreds of them per every person working there. Converging all of these devices on one open unified standards-based network is not only a cost-effective and scalable way to get them connected but also a key to unlocking the revenue potential of IoT.