A smart solution: why IoT is an essential catalyst for automation and AI innovations

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Companies make automation a strategic priority but often fail to see the bigger picture

Workplace automation is definitely going places. A recent report from McKinsey, a high-profile research company, clearly identifies the need of the most companies to optimize their labour-intensive workflows. Three-quarters of their respondents say their companies have already begun to automate business processes or plan to do so within the next year. Even excluding high-tech and telecom industries, it is indicated that every second company in all other industries has already started adopting automation.

That said, automation adoption does not always go off without a hitch. The McKinsey report suggests that organizations who view automation as a strategic priority or a competitive edge are more likely to succeed at its implementation than others. Some companies fail to identify its true value for their business, or carry it out in a structured manner. Some of strong barriers remain lack of financial capital and unattractive ROI - in 2018 Manufacturing Priorities Survey by LEK Consulting, over 30% of US manufacturers were estimated to have these two as key hurdles to adopting automation.

To overcome these challenges, companies need to move towards automation in a smarter, ROI-efficient way. And this is where IoT technology may be of great help.

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IoT-powered digital transformation is the horse for the automation cart

As organizations climb up the ladder of automation complexity it gets essentially more digital. Replacement of basic manual operations has been largely achieved by previous waves of industrial innovation whereas now is the time of digital transformation. It is the time of connected intelligent devices, robotic process automation powered by AI, and adaptive cloud computing. As the same McKinsey report illustrates, automation projects bear much higher risk if they focus on a limited paradigm of raw cost reduction or business process effectiveness and fail to see a giant potential of multi-faceted digital transformation.

IoT offers a different approach. It allows companies to increase the immediate value of their products as well as address strategic automation targets. Among the key benefits of IoT for successful enterprise transformation are the following:

  • IoT offers ROI-effective use cases - The value of IoT solutions comes primarily from new operational data that helps you streamline your workflows. By using highly affordable modern sensors and IoT data management tools, enabling that new data requires only moderate investment and can be scaled easily as your business grows. Rather than committing your resources to a major automation overhaul, you can start from lightweight, self-supporting IoT solutions and build on them for further transformation.

  • IoT is a major selling point - Another takeaway from LEK Consulting survey is that manufacturers, as much as they are willing to go for greater automation and implementing IoT in their facilities, make their strategic priority to develop and commercialize IoT-enabled products. Device and data management features enabled by IoT give a distinct competitive edge on the consumer market as well as allow device vendors optimize maintenance and run remote updates.

  • IoT addresses automation in an evolutionary way - IoT breaks down the roadmap of automation into four steps: monitoring, control, optimization, and autonomy. Each of these stages offers a variety of IoT use cases for cost reduction, new revenue generation, and building a stronger brand. In this context, automation becomes less of a vague, complex goal while gradual implementation of business-focused use cases takes the centre stage. Another advantage of this approach is considering automation as a chain of incremental enhancements that add realizable business value in short periods.

  • IoT boosts your all-round technical expertise - As IoT becomes a key enabler of numerous strategies for cost reduction and building stronger revenue flows, forward-looking companies start recognizing it as their core area of expertise. IoT adoption thus sets the foundation for developing a strategic skill set and knowledge base within the organization so that it could successfully compete in modern marketplace.

  • IoT expands your footprint in modern markets - IoT allows you to tap into completely different opportunities and add new momentum to your business development. Device vendors can connect their customers with cloud service providers for their products, or become the ones themselves. And vice versa, service companies, such as Telecoms or healthcare providers, can utilize IoT solutions to expand their services and develop new ones. You can also forge win-win partnerships to take upon large-scale IoT projects, such as smart city and energy. Since IoT is all about connectivity between different devices, applications, and facilities, proactive participation in these burgeoning ecosystems is a major success strategy.

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At the convergence of AI and an intelligent edge

Beside the impact of IoT, automation gets largely different due to recent AI advancements. Machine learning algorithms allow building devices that become smarter at what they do as they do it, with or without supervision. There are numerous applications for voice and image recognition, robotic process automation, and full-fledged autonomous robots - all powered by AI.

However, a one million dollar question is how to handle enormous data processing workloads that result from intensive use of AI in the industrial and other commercial settings. Running it all through a remote cloud would induce significant overhead and latency, not to mention the paramount problem of how mission-critical cloud-dependent AI systems should work when offline. Again, the IoT has a solution.

In an intelligent edge setup, which is widely used in enterprise IoT deployments, connected devices can process the data before sending results to the cloud. They can be programmed to do analytics, bundling, refinement, and encryption, which all dramatically reduce the strain on network resources and allow devices to function in an offline mode when necessary. Bringing a part of AI powers to the edge of IoT ecosystems will be a logical next and drive a new wave of innovations.

IoT platform as the middleware

Finally, AI is critical for the very evolution of IoT devices. The sheer problem of managing and programming of billions of devices might soon become a show stopper unless devices gain the capability to intelligently adapt their operation on their own. If we don’t want this catch 22 in which scarce engineering talent cannot fulfill all IoT development initiatives but also gets trapped on piling-up support tasks, we need to push for bringing AI smarts onto connected devices. To enable sustainable, safe growth of the IoT multiverse will be impossible without AI.

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The rise of the "intelligent digital mesh"

To conclude on the role of automation, IoT, and AI in a modern enterprise strategy, it is important to understand where we are headed in the not-so-long run. In their report on top technology trends for 2018, Gartner identified that major technology trends are those driving ubiquitous interconnectivity and digital intelligence, and coined for them an umbrella term “intelligent digital mesh”. Everything will be smarter and a part of an ever smarter whole - standalone automation will thus become a thing of the past.

Taking advantage of this digital expansion won’t happen without a well-structured approach. A good starting point could be outlining your company’s digital business strategy and IoT strategy. It should help you figure out your leverage for new revenue streams and cost reduction mechanisms. Most importantly, this new dynamic technology landscape calls for adaptive organizations that find opportunity in going more digital - gather user data to improve their value proposition, manage their assets as digital twins to optimize workloads, and embrace AI for greater autonomy of connected devices. There are many ways to approach automation, and all of them are set to go through IoT.

Want to know more about using IoT for your business?

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