Automation IIoT

Selling the C-Suite on IIoT

Grant Gerke | December 19, 2018

According to ARC’s Ralph Rio, ‘Corporate- management metrics are about profit and loss (P&L) statements, and if you can tie your justification into that, you will get their attention.’

Taking a big-picture view of the Industrial Internet of Things (IIoT), it can be said the timing for the current manufacturing wave has been almost ideal. This era of disruptive manufacturing has coincided with one of the most prosperous economic runs for business in decades and a tremendous low-interest, capital-investment environment to help find plant efficiencies.

At Siemens’ recent “Manufacturing in America” conference in Detroit, Alan Beaulieu, CEO of ITR Economics, Manchester, NH (itreconomics.com), advised businesses to “spend money on capital investment now, as you will need it on the other side of 2019.” The keynote economic prediction is just that, a prediction, but Beaulieu’s firm has been a vocal proponent of capital and workforce investments since 2011.

The question many have asked is how are predictive pilot projects getting approved? As reliability, maintenance and operational personnel know, management can require excessive hand-holding to approve new predictive-maintenance projects and lost-in-translation operational metric arguments sometimes run aground.

Recently, Ralph Rio, vice-president of the ARC Advisory Group, Dedham, MA (arcweb.com), contributed critical insights regarding how to convince C-Suite management on new projects in a podcast titled, “Five Questions for a Field-Service Expert,” from Mobilereach.com.

The big takeaway from Rio is how to identify metrics germane to the C-suite executive. “Corporate management metrics are profit and loss (P&L) statements and are issued quarterly,” says Rio. “If you can tie your justification into that, you will get their attention.”

Rio identifies two approaches to selling IIoT projects to management. One is selling management on services and identifying increased margins with service contracts. Rio stresses the importance of moving executives away from a cost-center perception and to a profit and loss center.

The second path is adding services and running pilots on your own assets. Last year, Efficient Plant  revealed how Duke Energy Renewables, Charlotte, NC (duke-energy.com), owner and manager of more than 4,000 MW of wind assets, is now using Buffalo, NY-based Sentient Science’s (sentientscience.com) DigitalClone Live software to diagnose gearbox failures and provide corrective actions for wind turbines. The software helps identify and predict when cracks will appear in the microstructure of rotating mechanical components.

The Duke deployment is an example of a “real-option” approach, where the company leverages its assets to evaluate whether a fuller offering is a safe bet and can resonate with management. Joe Barkai, the author of The Outcome Economy and a recent blog post, titled, “Return on Investment of IoT,” emphasizes that companies should view IIoT “as radical technology and business innovation aimed at business disruption.”

Most of the time, management doesn’t like to hear the word “radical” when investing in new opportunities, but this is the era of disruptive manufacturing. EP

ggerke@efficientplantmag.com

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Grant Gerke

Grant Gerke

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