A “discovery” programme suggests there is more talk about IoT than actual implementation. What do you think is holding back uptake?
IoT is an immensely exciting technology and industrial adopters are becoming more and more familiar with the use cases that sit behind it, but uptake is still slow in certain sectors. There are a few issues here; adopters aren’t sure how to build technology business cases for long-term return on investment. In addition, education, awareness and confidence around IoT within an organisation might be low, and dedicated innovation budgets might be reduced in the wake of the pandemic. This means that ultimately, small-scale proof of concepts often don’t make it to full-scale deployment, and larger-scale uptake of IoT within the organisation doesn’t get off the ground.
How is the IoT Discovery Programme making a difference to the participating companies so far?
This is the first cohort of the IoT Discovery Programme, involving organisations including Northern Gas Networks (NGN), Celsa Steel UK, Siemens and Yusen Logistics – but we are already seeing a huge amount of growth and upskilling from the organisations on the programme. We have spent time discussing the technology, use cases and business cases that sit behind sustainable deployment of IoT technology within the utility sector and beyond – with other cohort attendees from logistics, manufacturing and steel production.
Following successful completion of the programme, we will be looking to work with all of these companies on the deployment of scalable proof-of-concept projects to test and iterate the relevant IoT solutions – with a view to scale sustainably.
We will be working closely with NGN to help develop technical and financial funding strategies, business cases and support supply chain and innovator engagement. NGN is hoping the programme will help drive clarity of longer-term strategic requirements for their business, and also further support the potential innovation work areas in the IoT space – particularly relating to the Energy Systems Transition and digital transformation activity.
Can you describe some IoT applications for utility businesses that are working well?
Certainly. The adoption and implementation of IoT has been very successful in utility businesses, across a number of sub-sectors including water and gas, and even within the home through the use of smart meters. Ultimately, the use of IoT means that utility companies have access to a plethora of live data at their fingertips, enabling real-time decision making – and even more excitingly, predictive decision making, ie using sensor data to determine whether something is about to break down or go wrong before it actually does.
Exciting use cases in the utility industry include syphons with remote monitoring capabilities. Historically, syphons were installed to collect water transported in the gas network when manufactured gas was used in the UK. As the gas network transitioned to natural gas and mains replacement programmes, syphons were not considered necessary and as such syphons compatible with the polyethylene (PE) network were not available. However, in some locations water ingress can still occur and syphons are required to capture water in the network.
[Technology company] Rosen Group collaborated with NGN to design a syphon compatible with the PE network – including a remote monitoring system to explore the potential benefits of IoT. This type of system reduces the likelihood of NGN customers losing gas supply due to water ingress, while the remote monitoring allows NGN to perform reactive maintenance to empty the syphon – increasing operational efficiency.
For gas, electricity and water companies, it’s often difficult to quantity the impact of investing in IoT, and therefore to build a business case. How would you advise a utility company in that situation?
Many industry reports point towards two things: the importance extracting as much value as possible from digital investment, and the lack of creating these highly valuable analyses. A solid example is Capgemini’s Annual Report that showed that among digital leaders, only 56% of organisations make business cases. Meanwhile, EY’s 2021 Digital Investment Index illustrated that only 15% of executive teams had realised the full benefits and value from their cloud investments – and only 7% in AI and IoT.
In utility companies, sometimes building the business case and defining the Return on Digital Investment (RODI) is not as straightforward as other instances, as some of the KPIs are hard to measure. Indeed, achieving carbon zero impact and minimising the operational costs and social disruptions when a pipe bursts in the middle of a town, and calculating the ‘true cost’ of supply chains, are hard KPIs to define. In addition, CFOs and other budget holders within organisations are hardwired to divert organisational funding to projects that can be clearly measured.
Through our work with leaders in the utility sector, we see that those who extract the maximum impact from IoT technologies tend to be companies with a clearly defined strategy and vision. The right mix of talent and technical capabilities to deliver on their aspirations is crucial, while willingness to invest in data analytics is also fundamental.
How does the UK compare to other countries in terms of uptake of IoT technology?
The UK as a whole is a little behind the likes of Germany, the Netherlands and other central European countries when it comes to IoT adoption, but is catching up fast. This is largely due to two factors: innovation budgets in these countries tend to be larger, and they are really good at spinning out innovative technology and start-ups from industrial companies themselves.
Excitingly, the UK is making great strides in IoT adoption across a number of industries, including traditional manufacturing, utilities and agriculture. This was driven in part by the pandemic; with large numbers of the workforce needing to work from home, the need for live data and remote operations grew rapidly. IoT came to the fore as a result.
Once businesses make the decision to invest, do they find it difficult to navigate the different suppliers – for hardware, sensors, software, communication protocols?
This can certainly be a challenge for organisations after they have made the decision to invest in IoT. There are so many suppliers, technology types and sensors out there that it can be difficult to choose the correct components for your desired solution and outcome.
This is where organisations like Digital Catapult can support: teams of technologists, product managers and innovation specialists can work collaboratively with organisations’ internal stakeholders to understand the challenge, requirements and technical landscape to advise on the best solution. Part of our offering involves supporting roll-out and pilots to monitor effectiveness of trials and advise on how to deploy at scale in a sustainable way.
What is the number one change or reform or mindset shift that would help boost adoption of IoT in industry do you think?
Understanding that new business models are enabled by data. In order to drive innovation within your business and for your end customers, live, actionable data is essential. This will help your organisation to create new programmes, services and offerings that address customer needs. And that’s where IoT comes in.
To find out more about IoT Discovery, contact Rukmini Prasad: firstname.lastname@example.org.