IoTAA  & KPMG ‘State of Nation’ Briefing Report

IoT Alliance Australia urges enterprise to accelerate IoT or risk massive “Kodak event”

The Internet of Things (IoT) is at the heart of the latest wave of disruption and transformation rippling across the Australian economy – but the inertia in many end user organisations is placing them at risk.   Not least because they could miss out on the $116 billion of economic impact and 2 per cent productivity improvement that IoT promises to deliver to forward-facing Australian enterprise by 2025.  Significant advances have been made in the technology, security, standards and supporting infrastructure to aid the deployment of IoT solutions, but Australian business and government adoption remains patchy.

Speaking at the recent IoT Alliance Australia (IoTAA) State of the Nation event in Sydney, IoTAA chair and Bosch regional president, Gavin Smith warned that organisations which failed to embrace IoT and the next wave of digital transformation risked a “massive Kodak event in the next decade.”
Australian enterprise, he said, must accelerate its adoption of IoT, seize the opportunity to digitally transform and drive economic impact. “You have to think in a visionary way not an incremental way,” said Smith.

IoT Impact in Sydney this October will reveal that vision, with successful early adopters sharing their stories and insights, backed by local and international technology experts. IoT Impact provides an important opportunity to attend hands-on workshops and network with peers. Register here

The State of the Nation event stressed that the most successful IoT deployments align with an organisation’s strategic priorities and are commercially pragmatic.
While written business cases can be compelling, users remain sceptical about vendor-promised benefits but respond well to actual use cases with confirmed return on investment data.

In farming and agriculture IoT water monitoring, while fairly simple, had proven itself a “Trojan horse” leading to the rollout of more sophisticated IoT solutions once the technology had proven its value.

Piers Hogarth Scott, national practice leader IoT at KPMG and chairman of the executive council of IoTAA acknowledged the slow burn of IoT deployment, but was upbeat about its ultimate impact. “We are right in the midst of the 4th industrial revolution now with IoT at its heart.”

He encouraged delegates to also explore the intersection between artificial intelligence, machine learning and IoT because; “You can’t do IoT at scale without AI because humans don’t have the capability to measure the output from billions of sensors that are being instrumented across the environment.” Both AI and blockchain will be explored at IoT Impact in October. Hogarth Scott predicted that the combination of technologies would lead to profound change in the next decade in every business sector and aspect of modern life.

IoT State of the Nation – 2019

Interpolating McKinsey & Co research through to 2025, IoTAA CEO Frank Zeichner estimated that IoT could deliver an economic kicker to the local economy worth up to $116 billion and a 2 per cent hike in national productivity.

The technology is maturing and proliferating; while there were 10 billion IoT devices in operation globally at the end of 2018 – that will double to 20 billion by 2022 and explode to 64 billion by 2025 as business accelerates to IoT impact. Connectivity platforms are also expanding, offering greater choice to business and industry, and the arrival of 5G and Myriota’s low earth orbit satellites further expand user options.  Zeichner noted however that while Australia ranks 14th in the most recent World Economic Forum Report Global Competitive Index, it ranks lower in the WEF’s measure of enabling environment and innovation ecosystem.

The below graph give an overview of Australia’s position in the WEF Competitive Index.

Australia’s position in the WEF Competitive Index

There is work to do because organisations which fail to embrace IoT risk eroding their competitive edge and the threat of being overtaken by more forward-facing business.  Recent drivers and enablers for adoption of IoT include the passage of the Consumer Data Right legislation; the release of CSIRO Data 61’s AI Ethics Framework; and AEMO and ESB’s work on solutions and standards to address Distributed Energy Resources.  Zeichner revealed the results of its IoTAA’s Eco mapping survey conducted earlier this year which show energy and utilities along with smart cities and food and agriculture as early movers on IoT.

Respondents to the eco mapping survey called for IoTAA to focus its efforts developing practice guidelines and guides regarding: connectivity (Bluetooth, RFID, Wi-Fi, LoRaWan, etc.); solution/service provision; and intelligent enablement (AI, business intelligence, machine learning, blockchain).

Top 3 Barriers to IoT Adoption

Asked to select the top three barriers to IoT adoption, respondents cited; trust and security, unclear business case, and unclear business model.
According to Zeichner “The unclear business model indicates for me both an opportunity and potential threat for businesses and government as IoT opens new possibilities. That is where IoT Alliance can help.”

To that end IoTAA supports its 500 organisation and 1,000 individual members. Its 12 active workstreams focus on raising awareness of IoT (IoT Impact will be the flagship event for 2019); priming demand-side engagement (supporting this with the IoT Reference Framework); and acting as a trusted Government advisor (IoTAA recently delivered its safety report on consumer IoT safety).

Are Key Industry Sectors IoT Ready?

Key industries discussed at the briefing.

Water

With a rich history in operational technology and SCADA networks, this sector understands the inherent value of data. It is now grappling with the impact of IoT devices which can be deployed for a tenth or even a hundredth of the cost of more traditional sensor technology.  There is a clear use case for deployment of IoT in association with artificial intelligence or machine learning platforms to deliver insight from the massively growing data collections.

Food and Agriculture

A live poll at the State of the Nation event identified food and ag as the sector most rapidly transformed by IoT. The Victorian Government’s $27 million investment in digital agriculture has been a catalyst for IoT programs. KPMG has identified 300 agtech vendors in Australia and is launching an agtech finder to help farmers identify the right solution for them.
With 100 members – divided equally between IoT vendors and food and ag organisations – the food and ag special interest groups has identified the main challenges for this sector as connectivity and interoperability. The workstream has partnered with the National Farmers Federation to identify technologies of value to farmers.

Smart Cities

While there are multiple use cases for IoT in smart cities it is yet to become a government priority. There are also issues to be navigated as government as IoT user has different priorities and concerns than government as regulator.  The interest in creation of digital twins for physical assets as part of smart city ecosystems could lead to an increase in IoT deployments, and governments are alive to the opportunity to use street lampposts as backbone infrastructure for IoT.

Energy

Already a major use of SCADA systems with enterprises commonly reporting 50 TB data collections. Smart meters are increasingly being deployed in business and consumer premises. The challenge is not to deploy systems which simply mimic existing data collection – but identify new use case opportunities.
One promising area is Distributed Energy Resources (DER) and the need for systems that will provide instant insight to distributors and retailers. In April AEMO launched consultation into building a grid to support DER proliferation which is a fresh opportunity for IoT.

Transport

Market forecasts suggest that up to $16 billion will be invested in intelligent transport by 2025 as the nation seeks to address congestion problems and roll out new forms of mobility as a service solutions. Data collected through IoT can dramatically improve the efficiency of current road and transportation networks, and there seems to be appetite for reform.  In NSW for example the State government is working with Uber to integrate public transport ticketing and payment into the Uber app. IoTAA recognises that standards and connectivity will be challenging over the next two years, but the opportunity for IoT- led transformation is significant.

Manufacturing

Adoption, awareness and best practices are key to success in manufacturing. The challenge for manufacturers, most of which are SMEs is access to scarce resources and funds for innovation. Manufacturers in particular want to see proven case studies – and IoTAA is collecting international case studies to convince early adopters that IoT is impactful for manufacturing and to explore whether Germany’s approach of creating test labs shared by government, universities and manufacturers might work in Australia.  In mid-November IoTAA will welcome the Industrial Internet Consortium which will hold its quarterly membership meeting in Australia – and IoTAA is exploring how the organisations might work together. A special interest group is also working with a mining services company in Perth which is engaged with a university to develop a fully autonomous drill rig.

Health

Health practitioners are aware of the opportunity IoT affords. CSIRO trials from 2016 have already demonstrated the impact with pilots of home monitoring resulting in hospital stays being reduced by 35 per cent in some cases and delivering six times the return on investment.
While the technology has earned its stripes, widespread deployment of such systems is being stalled in part by funding challenges across Federal and State entities. At the same time there are challenges to address in terms of integrating IoT with legacy health care processes. To help address this an experience base co-design workshop will run at IoT Impact.

The IoT Impact conference will offer a two-day deep dive into how IoT can and will affect every industry, every individual. This is the key annual opportunity to network with peers and prospects. Pioneer users will detail how they have deployed IoT, the impact it is having and the lessons learned. International and local speakers along with renowned experts will provide updates on progress in technology, standards, regulation while a series of hands-on workshops will prime enterprise for IoT success.

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