Industrial IoT Primer: Revolutionizing Industries with Connected Technologies
Explore the basics of Industrial IoT, its converging technologies, data leverage, value extraction, and future potential in this comprehensive primer for executives.
This article was originally published in 2016, and has been updated in 2025.
In this article, we will explore the Industrial Internet of Things (IIoT): how it connects machines, leverages data, and drives efficiency, innovation, and new revenue opportunities. The Industrial Internet of Things (IIoT), a subset of the broader Internet of Things (IoT), is revolutionizing industries by connecting machines, sensors, and systems to collect and analyze data. This convergence of operational technology (OT) and information technology (IT) is enabling industries to optimize processes, reduce costs, and unlock new business models.
During my time at Accenture's professional development center in St. Charles last week, I had the opportunity to network with both new and experienced Accenture team members. While having conversations with both analysts and leadership, I noticed a trend when speaking about Internet of Things, many people have heard the term, but a large number of them were mostly unsure about what it means. So I’d like to take a step back from the technical details, and get in to some quick basics about Industrial Internet of Things.
What is the Industrial Internet of Things?
The IIoT refers to the use of IoT technologies—such as smart sensors, actuators, and connected devices—in industrial sectors like manufacturing, energy, transportation, and healthcare. Unlike consumer IoT applications (e.g., smart thermostats or wearable fitness trackers), IIoT focuses on improving operational efficiency, safety, and productivity in high-stakes environments. It enables real-time data collection and analysis, automates processes, and facilitates machine-to-machine (M2M) communication.
Converging technologies
The term Internet of Things actually spans multiple technical disciplines.
Smart Sensors & Devices: These capture data on variables like temperature, pressure, vibration, or humidity.
Connectivity Infrastructure: Networks such as Wi-Fi, 5G, or low-power wide-area networks (LPWANs) transmit data.
Edge & Cloud Computing: Edge computing processes data locally for real-time actions; cloud computing handles large-scale analytics.
Analytics & AI: Advanced algorithms extract actionable insights from raw data.
Human Interfaces: Dashboards or augmented reality tools allow operators to monitor systems and make informed decisions.
How IIoT Works
IIoT ecosystems consist of interconnected devices that monitor industrial processes. Data flows from sensors to gateways and then to centralized systems for processing. For example:
In a manufacturing plant, sensors on machines collect performance data. This information is analyzed to predict maintenance needs or optimize production schedules.
In energy management, IIoT systems monitor grid performance in real time to prevent outages or reduce energy waste.
The Business Value of IIoT
1. Enhanced Operational Efficiency
IIoT reduces downtime by enabling predictive maintenance. For instance, Airbus uses IIoT in its "smart factories" to monitor equipment health and streamline assembly lines—cutting costs while boosting productivity.
2. Data-Driven Decision Making
Real-time insights allow businesses to identify inefficiencies quickly. For example, Schneider Electric leverages its EcoStruxure platform to optimize energy distribution across facilities.
3. New Revenue Models
IIoT supports "Product-as-a-Service" models where companies sell outcomes rather than products. For example:
Instead of selling machinery outright, manufacturers can offer equipment on a subscription basis with performance guarantees.
Caterpillar integrates IoT into its heavy equipment to offer predictive maintenance services as part of its value proposition.
4. Improved Safety & Compliance
IIoT enhances workplace safety by monitoring hazardous conditions in real time. In industries like oil and gas or mining, this can prevent accidents and ensure regulatory compliance.
Real-World Applications
Manufacturing
Factories are becoming "smart" with IIoT-enabled automation and robotics. Companies like Siemens use digital twins—virtual replicas of physical assets—to simulate operations and optimize workflows.
Energy & Utilities
IIoT helps manage renewable energy sources efficiently. For example, wind turbines equipped with IoT sensors can adjust their orientation based on wind patterns for maximum output.
Healthcare
Philips Healthcare employs IIoT in remote patient monitoring systems that integrate wearable devices with electronic health records for personalized care.
Challenges to Consider
While the benefits are substantial, deploying IIoT comes with challenges:
Cybersecurity Risks: The integration of IT and OT systems increases vulnerability to cyberattacks.
Interoperability Issues: Ensuring compatibility between legacy systems and modern IoT platforms can be complex.
Skill Gaps: Successful implementation requires expertise across multiple disciplines—data science, network engineering, and industrial operations.
Looking Forward
The future of IIoT is promising as advancements in 5G connectivity, edge computing, and artificial intelligence drive further innovation:
5G Networks will enhance real-time data transmission capabilities.
AI Integration will enable more sophisticated predictive analytics.
Sustainability Initiatives will leverage IIoT for efficient resource management.
As industries continue their digital transformation journeys, the adoption of IIoT will be pivotal in shaping smarter factories, resilient supply chains, and innovative business models.
Conclusion
The Industrial Internet of Things represents a paradigm shift in how industries operate—moving from reactive decision-making to proactive optimization powered by data insights. Whether it’s improving efficiency on the factory floor or enabling new revenue streams through service-based models, IIoT offers immense potential for businesses willing to embrace it.
For executives exploring IIoT initiatives, it’s crucial to align technology investments with strategic goals while addressing challenges like cybersecurity and workforce readiness. The journey may be complex but promises significant rewards in operational excellence and competitive advantage.