Nearly half of all manufacturers are concerned about their ability to prevent a cyber attack on their business, according to a new poll of US factory owners.
The MPI Internet of Things Study — which was commissioned by BDO, a network of accounting firms — also found that only 8 percent of manufacturers were “very confident” in their current abilities to protect their business from online hackers.
Cyber-security concerns are increasing in many industries, but especially among those businesses investing heavily in research and development. The study found that 86 percent of factory owners cited risks to data security last year, an increase of 8 percent from the previous year.
Fear of Technology
John R. Brandt, CEO of The MPI Group, said the findings were alarming because using the “Internet of Things” — or the interconnectedness that the Internet provides to businesses, consumers and industry globally — is expected to be a key strategic initiative for manufacturers worldwide by 2020.
“Roughly two-thirds of manufacturing executives think that the IoT will increase their profitability over the next five years,” Brandt said in a news release announcing the survey’s results. “Unfortunately, only one in 10 of these leaders have actually implemented an IoT strategy.”
While most factory owners understand the benefits of interconnectivity, concerns about cyber-security are preventing many from taking action. That could limit growth opportunities for US businesses, even when overseas manufacturers are moving full steam ahead, according to Brandt.
Good News/Bad News
On the positive side, the survey found that 76 percent of manufacturers plan to increase the use of smart devices or embedded intelligence in production processes within the next two years. According to the survey, the best opportunities lie in shipping, warehousing, and document management.
Also, 66 percent of factory owners plan to increase the amount they invest in IoT-enabled products between now and 2018.
But on the negative side, about half of manufacturers said their businesses would require significant investment in new Information Technology upgrades or network overhauls in order to benefit from IoT efficiencies. And 44 percent said the biggest obstacle to leveraging IoT opportunities is their company’s limited understanding of how IoT can improve operations and products.
Across the ‘Digital Divide’
IoT technologies that can improve efficiencies and productivity include machine-to-machine communications such as sensors in one machine that trigger actions of another machine, or machine-to-enterprise communications, such as machine sensors that send data corporate business systems.
The problem, according to the survey, is that not enough businesses understand how these technologies can directly benefit them.
“The IoT offers unprecedented opportunities for manufacturers to boost productivity, customer satisfaction, and profitability,” Brandt said. “But many companies are already falling behind. There’s a ‘digital divide’ in manufacturing between IoT haves and have-nots — and it’s growing larger every day.”
Challenges Ahead
According to the survey, the top five challenges facing companies pursuing IoT technologies are:
- Identifying opportunities/benefits of IoT-enabled products (44 percent)
- Clear understanding of customer needs/value (36 percent)
- Technologies needed to embed smart devices into products (35 percent)
- Budget/resources to develop IoT-enabled products (32 percent)
- Where/how to get started with IoT-enabled products (29 percent)
Until manufacturers can gain a better understanding of how the Internet of Things can directly benefit their business, they will continue to be reluctant to invest in these technologies.