10 May Relayr study: Digital transformation in german industry – decision makers look to industrial IOT
Three-quarters of the decision makers in German industrial firms agree that their market is undergoing digital transformation. Half of all companies are already employing industrial IoT solutions – and they are very happy with it. These were the conclusions of a study by IIoT provider relayr. 200 leaders from Germany’s manufacturing industry took part in the survey, which was conducted by the market research company forsa in the summer of 2020.
The study was titled “Industrial IoT in Germany: Transformation and technology usage in industrial companies from the decision maker’s perspective.” It surveyed the ongoing digital transformation with a focus on the current as well as long-term deployment of IIoT solutions in the manufacturing industry.
German industry is being digitally transformed
The findings show clearly: The majority of German industrial firms (77%) are observing a process of digital transformation within their markets. In relation to their companies, 94 percent of the decision makers felt they were in the process of digital transformation. Most companies claimed to be in a “Planning phase” (27%) or a “testing phase, trialing measures and analyzing efficacy” (34%).
IIoT as an important driver of transformation processes
Along with IIoT, artificial intelligence, blockchain and big data were named as three significant technologies for the industry. Sixty percent of the companies rated IIoT as “important” to “very important”, IIoT topped the list with big data (46%) and artificial intelligence (36%) coming second and third respectively. Blockchain technologies were rated as “important” or “very important” by only ten percent of the companies surveyed.
Half of German companies already using IIoT
At the time of the survey, 49 percent of the companies were using IIoT technologies. Most of the companies surveyed had been using IIoT for one to two years (35%) or three to five years (39%). Some of the main reasons given for deploying IIoT solutions included essential operations such as process optimization (24%), efficiency (18%), customer or market demands (17%) or modernization (15%). Goals such as process optimization and increased efficiency were mirrored in the most common way IIoT technologies were applied: eighty-four percent of the companies use IIoT to analyze sensor data from their machines or plants. Of those firms not yet using IIoT, 65 percent plan to employ IIoT in the future. The main motivation to implement IIoT was given as improved plant operations (87%) as well as increased quality (79%). From the companies who claimed they did not have plans to deploy IIoT technologies, 75 percent said they would change their minds and introduce IIoT if they could be assured the technology could improve their business results.
German Industry positive about IIoT
On the whole, attitudes towards IIoT solutions were very positive. 79 percent of the survey participants rate the usage of IIoT at their company as “positive”, while 16 percent see it as “neutral”. Not one of the companies surveyed had a negative opinion. Based on their experiences, 93 percent said they would even consider deploying IIoT again. Most of the companies (74%) are already planning further IIoT projects – a clear sign of the efficacy of the IIoT and a general willingness within German industry to innovate.
Digital transformation challenges: Skilled labor shortage remains a core issue.
Although the results of the study were positive, German industrial companies still face challenges in their digital transformation processes. “Lack of employees with digital expertise” (63%), “old/unsuitable data architecture” (60%), “necessary strategic investment” (59%) were among some of the challenges named by the decision makers. The issue of skilled labor shortage is the biggest obstacle for the execution of IIoT projects. “Lack of specialized knowledge about IIoT” and the “lack of qualified personnel” were issues for 55 percent of the respondents. Companies compensate for this by looking for external support. Three-quarters of the participants worked with external partners for the introduction and implementation of IIoT technologies.
IIoT’s potential to evolve business models rarely exploited
It’s common knowledge that the IIoT doesn’t just have the potential to optimize processes and reduce downtime. The technology can also be used to expand companies’ business models or even to develop new ones. The respondents were, however, divided on this matter. At the time of the survey, 17% of all participants had already changed their business model as part of their implementation of IIoT technology. 38% could imagine doing this at some point in the future. Forty-four percent felt this was not an option.
Josef Brunner, relayr CEO: “I found the results very pleasing in several areas. The responses clearly tell us that IIoT is the key technology for the German industry. Its deployment was consistently perceived as positive by companies. IIoT has quite rightly arrived at the center of German business and industry. However, there is a certain amount of hesitancy on behalf of the companies to comprehensively change how they develop traditional business models as part of their digital transformation. There remains a lot of untapped potential in this area. As a partner to the industry, we’re happy to make our contribution to realizing this potential in the future.”
About this study
The empirical study Industrial IoT in Germany: Transformation and technology usage in industrial companies from the decision maker’s perspective conducted by relayr and the market research institute forsa aimed at mapping the current state of the IIoT-related digital transformation. Due to the Covid-19 pandemic, the time frame under investigation moved from early 2020 to March 17 until July 3, 2020. The study took a representative sample of 200 companies with 1,000 or fewer employees with an annual turnover of over 50 million euros. The companies were all from the manufacturing industry. The semi-standardized telephone surveys targeted C-level decision makers as well as employees working in IT.
About relayr
Relayr is the Industrial Internet of Things (IIoT) powerhouse delivering the most complete solution for risk-free digital transformations.
We unleash data insights from existing equipment, machines and production lines to improve our customers’ business outcomes. We enable industrial companies to shift from CAPEX to OPEX-based offerings to their respective markets, providing a unique combination of first class IIoT technology and its delivery with powerful financial and insurance offerings — all from a single source trusted by hundreds of companies worldwide.
With relayr, manufacturers, operators, and service companies for industrial equipment are empowered to implement fully interoperable IIoT solutions guaranteed to achieve their target business outcomes.
