Disruptive Technologies Make or Break Your Business

June 222015
Disruptive Technologies Make or Break Your Business

Bill Lydon’s Automation Perspective

By Bill Lydon, Editor

The adoption of disruptive technologies can make or break your business. The effects can be positive or negative. Adopting what appears to be a disruptive technology that does not go mainstream or adopting it too early can break or significantly hurt a business.

Many “experts” and vendors are loudly proclaiming that manufacturers that do not implementing disruptive technologies will be run out of business by competitors. The Internet of Things (IoT) with the idea that everyday devices will be connected to one another is one of the hottest topics in technology today. It is true that shifts in technology can bring about big changes in industry, and automation professionals should help guide their employers and the industry.

Manufacturing executives are left wondering what to with the warnings that their business is in jeopardy if they do not make investments in the Internet of Things (IoT), cloud computing, big data analytics, Industry 4.0 and/or the Industrial Internet of Things. Vendors and market research firms are promoting sales of new technology with aggressive IoT market forecasts. For example, Cisco estimates that the number of connected devices worldwide will double from 25 billion in 2015 to 50 billion in 2020, and research firm IDC forecasts that the entire IoT market will grow from $1.9 trillion in 2013 to $7.1 trillion by 2020. More alarming to executives are presentations and articles proclaiming many business models are going to be changed and companies that don’t keep up will become irrelevant. Uber and Airbnb are examples of changing business models that use Internet technology to disrupt competitors.

There are definitely interesting and exciting new technologies that have potential for improving manufacturing and process automation. I think it is important for automation professionals to take the initiative to understand, evaluate, and make recommendations to management about the adoption of new technology.

Timing

Applying new technology when it is stable and before competitors is the smart move and will yield the most value out of technology investments. If the technology is adopted too early it is very expensive and yields a low return on investment for a number of reasons, including labor intensive implementation, poor or unrefined features, and reliability problems. Today, many of the fundamentals building blocks for the Internet of Things (IoT) are still in the process of being created by standards groups and suppliers. Larger companies are just establishing dedicated IoT divisions and initiatives, including Intel, IBM, GE, and CISCO and it will take time for them to become solid IoT suppliers. In addition, startup companies are just emerging that may become the future vendors of choice with new innovative solutions that will dominate the markets.

Think about the early days of Ethernet, before plug ‘n play, when it required large and difficult-to-configure interface cards and installation of special software drivers. Having Ethernet on every controller then would have been a costly nightmare and some early-adopter companies paid a high price to try this. Venture capital people refer to the first adopter of a new technology as the “lunatic fringe” since they are willing to put up with all kinds of problems, including application challenges and poor reliability. In contrast, industrial automation usually leverages established and refined Commercial Off The Shelf (COTS) technology developed for other larger markets and applications. For example, when Ethernet TCP/IP was totally integrated into a single integrated semiconductor chip, it became universally added to industrial controllers.

Picking the right technology and applying it when stable is where automation people can help management get the most for their investments. The big question is when to invest. The Gartner, Inc. Hype Cycle curve is a helpful tool when thinking about the application of new technology. It defines five key phases of a technology's life cycle over time. .

Technology Trigger

A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.

Peak of Inflated Expectations

Early publicity produces a number of success stories — often accompanied by scores of failures. Some companies take action; many do not.

Trough of Disillusionment

Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.

Slope of Enlightenment

More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.

Plateau of Productivity

Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology's broad market applicability and relevance are clearly paying off.

The Hype Cycle curve illustrates what happens to successful technologies over time but does not illustrate technologies that never make it into the mainstream. For example, in the history of industrial networks, there were many network protocols that never became mainstream long term technologies and they died with customers that applied them.

Automation Professionals Role

Automation professionals are uniquely positioned to understand, coach, and guide management in this sea of new, unfolding technology. This requires an open mind and knowledge of your manufacturing environment to select, evaluate, and make recommendations. This includes suggesting to management exploratory and pilot projects to try new technology that will help frame new automation initiatives.

Nils Bohr, the founder of Quantum physics, and Einstein's nemesis, famously said...

"Making predictions is very difficult, especially when it concerns the future".

Don't listen to prophets, stick to the facts and the profits will follow.

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