A recent industry benchmark survey conducted jointly by Manufacturing Insights, an IDC Company, and M2M magazine, revealed that machine-to-machine (M2M) adoption is widespread across multiple industries. However, improvement is needed in measuring the success of M2M initiatives and using the application as a disruptive technology for innovation.
When asked ”What existing business processes were replaced by M2M automation?”, 46 percent of respondents said M2M automated an existing manual business process, 28 percent reported putting a new process in place and 26 percent said the application enhanced an existing business process.
“The survey results confirm that M2M is gaining recognition and traction, yet it is still implemented and managed as a technology rather than a mature business process,” says Peggy Smedley, editorial director and president, Specialty Publishing Company, publishers of M2M magazine. “To reap the full benefits of M2M technology, companies must use it to innovate business process, not just automate or enhance existing processes.”
What Are the KPIs and Who Selects Them?
When asked, “What key performance indicators (KPIs) were used to measure the success of the M2M implementation?”, 53 percent of respondents cited return on investment, 45 percent indicated cost reductions, while overall equipment effectiveness (OEE) and workforce utilization tied for the third KPI at 35 percent each.
When asked “Who selects these KPIs?”, less than half the respondents (42 percent) said upper management, 17 percent cited a committee of key stakeholders, and 14 percent cited an internal product champion. Only 20 percent said the KPIs flowed naturally from set business objectives and represented corporate goals.
“To be effective, M2M projects must define KPIs that are aligned with corporate strategy and garner the support of upper management,” says Joe Barkai, practice director of Manufacturing Insights’ Product Lifecycle Strategies advisory service. “Furthermore, there is risk when a project is measured by self-fulfilling KPIs. M2M should be used to improve operational visibility and business process agility, rather than as a medium for cost cutting.”
Other Survey Findings
The top three industries represented in the survey were manufacturing (37 percent), oil and gas (12 percent), and utilities (12 percent).
When asked, “Is your company currently using any M2M communications for device networking?”, 32 percent of respondents were using M2M in one area, while 49 percent were using it in multiple areas.
The top anticipated benefits of M2M initiatives (prior to implementation) were cost reductions (67 percent), improved asset monitoring (55 percent), and improved customer service (52 percent).