Business Made Smarter: Enhancing Competitive Advantage Through Connected Equipment

BUSINESS MADE SMARTER Enhancing competitive advantage through connected equipment

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CONTENTS

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Abstract

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Introduction

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Connected Equipment Strategy: More than Worth the Effort

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Bringing it All Together

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Making the Case for Improvements

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Roadmap to Success

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Calling in the Experts

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Improved ROI with Connected Equipment

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Best Practice: Define, Execute and Maintain

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About the Author

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About Cyient’s IoT Initiative

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Cyient Thought Board

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About Cyient

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Abstract In a competitive industrial marketplace, connected equipment powered by the Internet of Things (IoT) and artificial intelligence has become an imperative that no original equipment manufacturer (OEM), equipment owner or operator can afford to postpone. While there are valid challenges that come with defining a connected equipment strategy and implementing an IoT platform, including culture change and integration with legacy systems, the benefits far outweigh the complexities.

Organizations who implement a connected equipment strategy are not only responding to market demands, but also are realizing greater efficiency and revenue gains, as well as increasing market share.

Introduction In order to thrive in today’s industrial landscape, it has become a necessity for original equipment manufacturers (OEMs), equipment owners and operators to harness the power of the Internet of Things (IoT) and advanced data analytics. With what is called “connected equipment,” businesses can move away from tedious and costly corrective repairs toward preventive and predictive maintenance with prescriptive actions, while increasing the operational safety, productivity and reliability of their equipment.

But connecting equipment doesn’t just enable increased uptime and reduced operating, maintenance, and warranty costs.

With connected equipment, OEMs also can deliver innovative product designs and brand new digital offerings—such as subscription services—that better meet their clients’ operating demands.

Still, creating and maintaining a connected equipment strategy can be challenging, both for new businesses and those with legacy equipment. Through a well-thought-out approach, OEMs, owners and operators can achieve sustained value and return on investment (ROI) while maintaining a competitive advantage.

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Connected Equipment Strategy: More than Worth the Effort From industrial and heavy equipment to mining and oil and gas, business leaders are recognizing the necessity of channeling IoT and equipment connectivity to maintain or increase their market share. Both digitization and IoT offer the potential for business growth and business efficiency with less risk. And, the future is looking even brighter as technological advances continue to make assets even smarter, safer, and more reliable.

For OEMs, a connected equipment strategy and IoT implementation enable new insights on product performance that can lead to the resolution of unique operating challenges. With real-time asset health monitoring, connected equipment data, value-added analytics, and predictive action planning, internal costs tied to warranty claims, manufacturing, and product development and enhancement can be reduced, and spare part inventory costs optimized. In addition, aggregated intelligence enables OEMs to upgrade or improve designs and enhance products for superior market performance.

Plus, with predictive analytics, owners and operators can identify or even solve equipment

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problems before they have an opportunity to occur. When potential failures are predicted ahead of time, maintenance costs can be reduced, and asset life can even be extended.

In turn, total operating costs are reduced and top-line sales revenue is improved, thanks to enhanced product differentiation. Additionally, OEMs can bring value to equipment owners and operators by increasing their product uptime, augmenting their asset management programs, better managing their risks by reducing unplanned downtime due to equipment failure, increasing operational safety and efficiency, and decreasing their operating expenses. Plus, OEMs can offer new digital products and solutions they were never able to provide before, including subscriptionbased services that give customers access to enhanced equipment diagnostics. In short, IoT helps OEMs improve customer experiences, which in turn leads to additional revenue streams and strengthens competitive advantage.

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Bringing it All Together The ideal first step in developing a sound connected equipment strategy is a consultation, including an assessment to determine the best path forward for IoT implementation. A third-party vendor, experienced in IoT system builds and equipment connectivity is best suited to determine an organization’s connected equipment requirements in line with established business goals, while analyzing where the business is at present. In addition, a third-party vendor can help set the stage for cultural changes that will be required across an organization to ensure a successful connected equipment implementation.

On the technical front, there are many opportunities to leverage an outside perspective—from a deep understanding of domain-specific requirements to experience with successful deployments across the entire IoT technology stack, including:

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Device Hardware and Software • Selecting the right sensors for the environment or extracting data from existing systems • Choosing the right edge computation, gateway, or data acquisition devices • Managing the security, firmware, and software updates on all connected devices

Network and Communications • Finding the right network architectures, protocols, and protocol translators for specific applications • Working out localization of devices and interconnection with existing communications infrastructures • Optimizing data bandwidth against network costs

Storage and Computation • Helping to define the right place (local, cloud-based, or both) to store data and handle computing loads from the perspectives of cost, capability and security • Speeding up value creation through analytics with pre-built models and accelerators • Providing a combined engineering and data science approach to focus more quickly on viable analytical solution paths

Information Consumption • Laying out a framework for optimal delivery of the information content, in the right forms to the right users • Building links back to enterprise systems to multiply connectivity benefits • Utilizing a user experience (UX) design approach to better connect with end clients and deepen brand awarenes

Making the Case for Improvements OEMs, equipment owners and operators that have been in business for many years may ask why there is a need to make business or technological changes when things seem to be working just fine. After all, moving to a connected equipment strategy is a complicated and time-consuming undertaking, from realigning teams—and roles within those teams—to enlisting extensive technological expertise and altering an existing business model. It may seem easier to simply maintain the status quo.

Cultural inertia is one of many barriers organizations must overcome before implementing an IoT system build or another 03

connected equipment solution. When considering a solution such as this, OEMs and other businesses hesitate to embrace systemic change for a variety of other reasons as well: Security concerns.

With clients’ privacy and protecting company IP as top priorities, security issues weigh heavily on the minds of OEMs. Naturally, the greater the connections, the greater the potential for cyber security problems. Working with a third-party company that is well-versed in security issues is one way to ease these fears.

A connected equipment security specialist can help strengthen cyber security measures to ensure a safer environment in which to acquire, transmit, store, and deliver data, as well as maintain compliance with industry standards.

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Inability to define return on investment.

The cost of implementation is often a big ‘unknown,’ and maintenance costs continue long after the solution has been implemented.

In addition, predicting the exact monetary benefits of a connected equipment solution is not easy. A third-party vendor with experience in the intricacies of connected equipment can outline the costs and returns and help determine the unique solution components that will provide the best overall value.

Lack of technological knowledge.

Many companies simply do not understand which technologies are involved in an IoT system build, and they may need help determining the solution that will meet their particular requirements. As technology in the IoT space is constantly changing, there is no good, single source of standardization for communication protocols, hardware and software. Choosing a technology that will have staying power in the technology landscape is a concern, too. A third-party firm that has experience with the technology necessary for a complete connectivity solution, and insights into its future, can help determine the best path to take.

Old vs. new.

Integration with legacy systems that have been online for many years can feel daunting. An experienced external partner that has guided others in similar situations can walk through the steps to move from an older infrastructure to a modern one.

Roadmap to Success Overcoming these barriers can seem formidable, but the ultimate ROI is certainly worth it. Answering a few questions, for instance, defining the business value and ROI associated with the digital data product will help determine readiness to begin, or continue, an IoT system implementation. Finally, consulting with a company that specializes in connected equipment solutions—particularly one that offers end-to-end support—can ease many of the above-mentioned concerns. The roadmap below will provide the steps needed for an effective, comprehensive connected equipment transformation: Set goals.

Determining the end goals of a connected equipment strategy will help define the steps required to get there. Well-established OEMs, and their clients, need to decide if they are simply trying to keep up with the competition, or if they want to change the way they do business using connectivity, thereby also altering their revenue model. Even new businesses should set goals to determine exactly what they want to achieve from a connected equipment solution.

Define roles—and support those changes.

Too often, companies will choose to turn over IoT to an existing internal IT, electronics or digital team. In turn, these groups, likely work independently, chasing IoT solutions with different end goals and using different technologies—an approach that is not only costly, but also counterproductive.

OEMs, operators and owners should know that digitization doesn’t belong to one business unit because it affects the entire company.

For instance, if various systems are being integrated to offer a new business model to customers, engineering data and financial data are likely to interact, thanks to the interconnections afforded by IoT. In another scenario, finance, accounting, engineering,

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software, hardware, and networking all might work together in a complex—and transformative—organization.

Once the goals are determined, then, it’s important for the organization to get behind the changes that are needed to promote them. Everyone, from maintenance personnel through engineering, IT, finance, and the C-Suite, must be on board and involved.

A structure must be put in place to clearly define roles and responsibilities, as the inherent changes may drastically affect both the business teams and the roles within those teams. Traditional roles also will need to be redefined to make way for a cultural shift within the company. And, leadership will have to build support for these role changes and demonstrate how connectivity can benefit the business.

Here are some ways that traditional roles may change within a connected equipment structure: • The chief financial officer (CFO) must be prepared to strategize about the organization’s IoT transformation to ensure that the board or shareholders will accept it. Once the ROI has been clearly defined for the CFO, he/she must translate the information to the board or shareholders.

• Often a new role, the digital lead will need to understand the boundaries of his/her position, and how that position will interact with and support other teams going forward. The digital lead may define how the organization reacts to new offerings for digital products, while keeping abreast of technological innovations. Looking toward creative solutions within and outside the industry—since the technology often is shared between industry segments—will be an important role within the digital space.

• The chief technology officer (CTO) will need to be a champion for change, as well as the digital transformation. For companies that don’t have a digital lead, that scope of work also will fall on the CTO. • Profit and loss (P&L) leaders will need to understand how their business is affected by connectivity. Is the new business strategy going to be transformed into their revenue model, and will the organization be adding new products and services based

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on new data they didn’t have access to before? The P&L leader will need to define their budget as well as the changes in their revenue model, and then help to define the expected ROI. • Engineering teams will find that they need to interact more with other groups, such as electronics/IT and networking. At times, personnel who are more inclined to simply work on a product will need to relinquish some ownership. The same is true of electronic engineers, radio-frequency engineers and software engineers, all of whom may need to develop a deeper understanding of the new products and how they are used.

• Maintenance and operations teams must build a connectivity solution for their own operations, with an emphasis on efficiency gains. Change management will be a strong focus area here, as well, since past maintenance and operations procedures have likely only been modified infrequently over time. Maintenance and operations personnel will need to alter their processes to react to data-driven insights that they now will be able to obtain from their system, and they will need to prepare their organizations to best react to those insights.

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Build technology competence.

Determine the technology needs that will best support established connectivity goals and how to obtain them—whether they can be built internally or require the help of an outside vendor. When building connectivity for an operation, a careful assessment by an experienced third-party vendor can help determine the best ways to integrate connectivity into the operation to yield the most benefit. If, instead, connectivity is being integrated into a product, the product leaders can help find the optimal places to integrate the technology to provide the biggest benefit to both the OEM and the end customer.

Define internal and external benefits.

Once all benefits have been determined, internal messaging and external marketing should be deployed to showcase the

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advantages of the connected equipment platform.

Outline security procedures.

While some industries provide compliance standards, new cyber security procedures and processes must be defined in others.

Obviously, customer data privacy must be safeguarded, and appropriate steps must be taken to ensure that privacy is maintained.

Establish maintenance and aftermarket support.

A number of transformative changes in the company’s maintenance plan and support needs likely will be necessary when connectivity is added. Simply understanding the new components will require an education for the entire maintenance team.

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Implementing an IoT and connected equipment strategy is not for the faint of heart—but it’s a necessity for organizations that want to continue to gain market share.

Calling in the Experts Clearly, implementing an IoT and connected equipment strategy is not for the faint of heart—but it’s a necessity for OEMs, owners and operators that want to continue to gain market share. A company that is well-versed in connected equipment—both business and technology aspects—can provide the expertise needed to help organizations overcome common obstacles, avoid novice mistakes, and gain an expedient ROI. An experienced company that has faced similar challenges with customers in a variety of industries can offer unique solutions based on those experiences. In addition, a company with IoT expertise will have the innovative know-how to provide creative solutions to unforeseen problems.

A third party provides a unique perspective, too. As an “outsider,” the third party often can recognize areas where a fresh strategy is needed—sometimes validating preconceived ideas, but often providing new ideas and impressions. Validating the goals that have been set, and ensuring they can be reasonably achieved, also are important aspects of the experts’ work.

Across the business, experts can aid in setting realistic expectations—helping to detail how transformative the technology will be, and what 07

it will cost, for instance. Outside experts, too, can help build a business case for any leaders who are unsure about the strategy change and need additional help understanding the likely ROI. Even companies that have already started the roadmap process can benefit from third-party advice. The advising company would simply gather information about what investments have been made so far, and how open the OEM, owner or operator is to changing course as necessary.

From a technical perspective, third-party experts can help define and outline the specialized teams necessary to implement the connected equipment strategy. They can help define the roles needed and the way the teams should be structured. For instance, there likely will be a need for a solution architect; firmware, software and hardware engineers; as well as delivery managers—to name a few new roles.

Presumably, the outside expert has insights and access to market information. Whether the primary needs are for hardware, software, network architecture, data storage, including analytics and the delivery of business insights—or all of the above—the third party can provide input on the type of technology components needed. Such experts will be aware of technological innovations and be able to provide an optimal way to seamlessly roll out software and firmware updates, too.

Finally, a third party that has experience in deployment and maintenance can suggest best practices, help provide maintenance schedules and ensure that the right personnel with the right tools are in the right place at the right time. Furthermore, when an abundance of new data is collected, an outside company can help determine how it can be used to provide the biggest impact.

Considering the large scale of an IoT implementation and the number of roles and

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resources involved, a connected equipment specialist should ideally provide complete end-to-end support to help the OEM, owner or operator achieve a successful digital transformation, partnering with each business stakeholder through every step along the roadmap and even co-investing to create optimal IoT solutions. With a deep understanding of the business’ hardware and assets, and domain experience developing engineering, technology and digital strategies on various platforms, an experienced outside company can support the unique engineering requirements.

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When choosing a third-party company, make sure it can provide the following expertise: • Product and system knowledge • Knowledge of key industries • Understanding of end-user operating environments • Tool-agnostic framework development • Mature machine learning and artificial intelligence experience • Automated, optimized analytics model selection • Consultative problem-solving • Full life-cycle development for a connected equipment platform • Ability to define ROI to build a solid business case

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Improved ROI with Connected Equipment Connected equipment is simply a smart decision. The products are smart. The networks that support these products are smart. And, OEMs, owners and operators that realize the potential reward for harnessing the power of IoT and advanced data analytics are well-informed and wise to get in on connected equipment solutions before they become commonplace.

The insights gained from connected equipment can make a real difference in the competitive marketplace. Advanced analytic techniques can identify hidden patterns and provide insights into yesterday’s problems, or future concerns.

They can lead to innovations and improved functionality, often lowering maintenance costs and extending asset life. The end user support provided can be a key differentiator, even leading to new revenue streams.

But this type of intelligence doesn’t just happen. It takes a well-thought-out plan, the realignment of teams and roles, and often a business transformation to create a truly effective connected equipment strategy.

Consulting with a third party that is wellversed in connected equipment should be the first step for any company considering such a monumental move.

Best Practice: Define, Execute and Maintain An experienced company like Cyient can guide OEMs, owners and operators throughout the Connected Equipment process. Combining the digital and product design experience of more than 250 data scientists and 500 industrial equipment engineers, Cyient uses a one-stop-shop approach to design machine learning and artificial intelligence modules using machine-to-machine equipment data 09

and integrates them into its clients’ operations to provide real-time insights. That data can become the catalysts for business decisions for the OEM even as it provides improved customer experiences.

As an end-to-end partner, Cyient breaks down its Connected Equipment approach into three stages, which can be offered separately or together, depending on the customers’ need.

Throughout these processes, security is an overriding focus: Define—with Advanced Analytics. With analytic triage methodology, machine learning algorithms are used to predict equipment failure that will take place before scheduled maintenance. Often employed in such industries as industrial equipment, energy, mining and infrastructure, advanced analytics can involve equipment monitoring for improved throughput, recovery and asset availability, or process optimization for reduced process variability and unexpected equipment failures.

Cyient’s insights can include data preparation, models and algorithms, data visualization and app development—so that problems can be diagnosed, predicted and dealt with automatically.

Execute with the IoT. Through the IoT, every asset across the value chain—whether a machine in the factory, a part in the yard or a product at a customer site—can be smart, connected and digital. By integrating these assets with an enterprise system, actionable insights can be obtained.

The process begins with data gathering. The data then is processed, filtered and transmitted by a device. Using Wi-Fi, cellular, mesh radio, or other protocols, data is transferred over a network. Information from the built IoT network then is gathered and stored. Insights are generated and presented through analytics and automated processing. Based on those insights, alerts are sent to the right people, enterprise systems or devices, so that action can be taken.

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Maintain with asset health monitoring.

Using equipment and application data from multiple data sources, automated equipment monitoring and proactive analysis can enable informed maintenance, component

replacements, and repair decisions.

Operational efficiency and personnel safety are both increased. In addition, a user interface provides an asset health score, in-between repair time estimation, and component failure predictions.

About the Author About Cyient’s IoT Initiative Operating in 22 countries, Cyient has the experience and integration capabilities to implement a Connected Equipment strategy and enable your machines to be safer, smarter, more connected, and more reliable.

Matt Winkler Chief Digital Solutions Architect Industrial, Energy, and Natural Resources As chief digital solutions architect for Cyient’s Industrial, Energy, and Natural Resources business unit, Matt Winkler focuses on developing digital solutions by leveraging Cyient’s engineering capabilities to identify and solve clients’ business problems. Over the past 13 years at Cyient, Matt has led a number of teams and executed diverse engineering projects in engineering simulation, mechanical engineering, embedded electronics, and IoT for a variety of global clients in the aerospace, automotive, rail transportation, energy, mining, and heavy equipment domains. He believes every engineering challenge tells a unique story, and the better we understand the characters, the narrative and the audience, the easier the problem is to solve!

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Cyient provides years of technical expertise to help companies enhance existing digital capabilities or implement and adapt to new digital and IoT solutions through either a phased approach or a complete overhaul, both designed to offer flexibility and innovative business outcomes. The company’s dedicated cross-functional teams of data scientists and mechanical, electrical, software, and electronics engineers work with business stakeholders to synchronize functional requirements with technical architecture, resulting in unique industry 4.0 solutions that provide greater speed, reliability, efficiency, transparency, and the ability to solve high-priority issues through datadriven triage.

For more information, please visit www.cyient.com or contact Matt Winkler at matthew.winkler@cyient.com to schedule your Connected Equipment consultation.

The Cyient Thought Board

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Why is a connected equipment strategy imperative for OEMs and equipment owners and operators in every industry?

Digitization and IoT have played a significant role in making assets smarter, safer, and more reliable. Not only do these advancements help organizations meet the increasing operating and product performance demands of their customers, they also offer the potential to increase business growth, operational efficiency and market share.

Why are organizations hesitant to move to a connected equipment strategy?

From realigning internal roles to altering existing business models, OEMs and other businesses may be slow to embrace systemic change for the following reasons:

Cyber security concerns

Implementation costs and ROI uncertainty

Lack of technological expertise

Fear of the unknown

How can organizations overcome these barriers?

For starters, defining business value and ROI will help organizations determine readiness to start or continue with an IoT system implementation. Consulting with an experienced third-party that offers end-to-support can also ease many concerns and help organizations conquer the tasks ahead.

Determine desired end goals

Define and support new internal roles

Determine technology needs and how to obtain them

Clarify internal and external benefits

Outline cyber security standards and processes

Establish aftermarket support and maintenance plans

How can a specialist help with the implementation of an IoT or connected equipment strategy?

An end-to-end support provider well-versed in business and technological aspects of connected equipment can help organizations:

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Overcome common obstacles, due to inexperience and/or lack of resources

Validate an existing strategy or develop fresh ideas

Build a business case that can be presented to decision-makers

Define technical and other roles/teams necessary for implementation

Establish best practices for deployment and maintenance

Achieve timely return on investment

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About Cyient

Contact Us

Cyient (Estd: 1991, NSE: CYIENT) provides engineering, manufacturing, geospatial, networks, and operations management services to global industry leaders. We leverage the power of digital technology and advanced analytics capabilities, along with domain knowledge and technical expertise, to solve complex business problems. As a Design, Build, and Maintain partner, we take solution ownership across the value chain to help our clients focus on their core, innovate, and stay ahead of the curve.

North America Headquarters Cyient, Inc. 99 East River Drive 5th Floor East Hartford, CT 06108 USA T: +1 860 528 5430 F: +1 860 528 5873

Relationships lie at the heart of how we work. With more than 15,000 employees in 22 countries, we partner with clients to operate as part of their extended team, in ways that best suit their organization’s culture and requirements. Our industry focus spans aerospace and defense, medical, telecommunications, rail transportation, semiconductor, utilities, industrial, energy and natural resources.

For more information, please visit www.cyient.com

Europe, Middle East, and Africa Headquarters Cyient Europe Ltd. The Space Holborn 235 High Holborn London, WC1V 7LE UK T: +44 20 7404 0640 F: +44 20 7404 0664 Asia Pacific Headquarters Cyient Limited Level 1, 350 Collins Street Melbourne, Victoria, 3000 Australia T: +61 3 8605 4815 F: +61 3 8601 1180 Global Headquarters Cyient Limited Plot No. 11 Software Units Layout Infocity, Madhapur Hyderabad - 500081 India T: +91 40 6764 1000 F: +91 40 2311 0352

Š 2019 Cyient. Cyient believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Cyient acknowledges the proprietary rights of the trademarks and product names of other companies mentioned in this document.

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