Manufacturers in U.K. aren't realizing IoT benefits

A survey by SAP indicates that almost a fifth of British manufacturers have no plans to investment in the Internet of Things (IoT) in 2016 even though the general belief on the technology is positive and that it can benefit companies.


A survey by SAP indicates that almost a fifth of British manufacturers have no plans to investment in the Internet of Things (IoT) in 2016 even though the general belief on the technology is positive. Courtesy: Internet of BusinessU.K. manufacturers aren't actively investing in Internet of Things (IoT) technologies, according to a report published by SAP. The SAP study polled 100 senior executives working in the British manufacturing sector and found that almost a fifth expected no investment in the IoT this year. The average investment is only 8% of most information technology (IT) budgets.

Major doubt and challenges

This lack of investment casts a major doubt on the uptake of IoT, even though most of the respondents believed that the technologies can help. More than half of deploying companies saw cost reductions, and 38% saw improvements in product development.

The study revealed that there are clear challenges when it comes to adopting IoT. Nearly half (47%) cited a lack of awareness and understanding as a barrier, while 43% said legacy technology was an issue. 42% were concerned about data protection. Another study from the EEF suggested that Internet speeds are also an issue.

Light at the end of the tunnel

Surprisingly, only one in five have actually experienced an IoT application or product working. A respectable proportion of the executives saw IoT as a career booster, with 48% stating that IoT will result in higher value jobs in future.

The IoT is accepted as a source of growth and benefit for a variety of businesses and industries, which include manufacturing. 

Gartner claims there will be 25 billion objects connected to the Internet by 2020, with the IoT creating nearly $2m (£1.4m) in global economic benefit.

Staying positive with IoT

Nayaki Nayyar, GM & head of IoT at Go to Market for SAP, said the IoT offers many potential benefits for manufacturers. "IoT is set to have a major impact on the manufacturing sector and it's encouraging that businesses see the potential benefits technology can bring to provide better insights, proactive actions and improved outcomes," he said.

"Industrie 4.0 and the Internet of Things can enable end-to-end transformation for manufacturing companies and connect the shop floor to the top floor, optimizing supply chains and manufacturing operations and ultimately helping them stay competitive."

Separately, a report from BDO LLP has found that while 59% of UK manufacturers think Industrie 4.0 will have a positive impact on the sector, only 8% have a "significant understanding" of the processes involved.

One-fifth of companies surveyed had some Industrie 4.0 strategy in place, with 19% saying they do not need a strategy. 43% plan some level of investment in automation over the next 24 months.

Nicholas Fearn is editor at Internet of Business, which is hosting the Internet of Manufacturing Conference November 1-2, 2016, in ChicagoInternet of Business is a CFE Media content partner. This article originally appeared here. Edited by Chris Vavra, production editor, CFE Media,

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