Businesses across the world are moving rapidly to connect their products and equipment to the Internet-of-Things, opening up opportunities to create new business models and transform how they run their operations and engage with customers. However, tapping into the IoT is only part of the story. For companies to realise the full benefits of IoT enablement, they need to combine IoT with rapidly-advancing Artificial Intelligence technologies, which enable ‘smart machines’ to simulate intelligent behaviour and take well-informed decisions with little or no human intervention.

Over the coming years, ongoing advances in AI will have profound impacts on jobs, skills and HR strategies in virtually every industry—underlining the fact that companies don’t have the luxury of time as they map out their plans for an AI-enabled world. Already, integrating AI into IoT networks is becoming a prerequisite for success in today’s IoT-based digital ecosystems.

So businesses must move rapidly to identify how they’ll drive value from combining AI and IoT—or face playing catch-up in years to come.

In a recent thought leadership paper¹, we described why the advent of the Industrial Internet of Things (IIoT) is a once-in-a-lifetime business disruption one that requires organisations to develop or acquire new capabilities in managing direct relationships with customers, supported by transformed operating and business models. But realising the promise of the IoT also requires something else. To achieve its full potential, the IoT needs to be combined with an equally powerful and disruptive set of technologies categorised as Artificial Intelligence (AI). The exponential growth of the IoT is well-known, as underlined by the projections in the accompanying information panel. However, less widely appreciated is the profound impact that AI will have on every aspect of our personal and working lives—an impact that will be magnified and multiplied by its combination with the IoT. In fact, the titanic shift and ongoing disruption caused by AI is set to be similar to that caused by the introduction of the personal computer in the 1980s. Like the PC, AI will lay the foundations for an immense acceleration in innovation throughout and beyond the coming decade, creating a significant boost for the global economy. In the 1980s, nobody could have fully imagined the broad and deep changes that PCs would bring to our lives. Similarly, few people today can envision what AI will mean to us over the coming decades.

The value proposition of IoT and AI

Smart sensors: Delivering pervasive benefits

The mutually beneficial relationship between IoT and AI is manifesting itself in many successful integrations of the two technologies in the B2B and B2B2C space. The value propositions that underpin the fusion of IoT and AI include smart sensors (or intelligent sensors), which combine IoT and AI to provide realtime data and feedback that enables systems to fulfil the three capabilities we highlighted above—namely:

Predictive: Real-time data can be analysed to determine when a large piece of machinery or equipment will break down, enabling the failure to be prevented through proactive intervention. For example, today a GE jet engine collects 500Gb of data per flight, taking a ‘snapshot’ every second of over 5,000 parameters including air speed calibration, altitude, cooling, exhaust gas temperature and flow, and ground speed. This is in stark contrast to previous generations of jet engine technology, where just 1 kb of data was generated per flight from three snapshots (take-off, cruising, landing) on 30 parameters. The resulting insights enable GE to boost performance by 287 times while also delivering a seven-fold reduction in costs.

Prescriptive: Intelligent sensors can suggest immediate action at the edges of the organisation, thus avoiding outages and even disasters. For example, sensors on railway tracks can warn the control centre of any track failures. Similarly, lane centring technology in cars self-corrects when the driver veers away from the centre of the lane.

Adaptive/autonomous: Continuous data feeds from sensors can enable systems to learn the right actions to take autonomously. For example, in a healthcare context, blood glucose sensors can automatically change the level of insulin delivered in response to patient need. Similarly, monorail systems in many airports and cities run autonomously without any human drivers.

IoT / AI applications will impact all industries

Given the scale and range of potential benefits on offer, it’s hardly surprising that companies in many industries are beginning to take steps to seize the opportunities presented by combining IoT and AI

Time to create a strategic plan for IoT/AI

The combined disruption from AI and IoT will reshape our personal and business lives in a dramatic manner that is not fully imaginable or comprehensible by most companies today.

At one end of the scale, it will displace routine, monotonous human jobs with machines. At the other, it will radically disrupt the competitive landscape, by giving the early adopters of AI tremendous advantages in terms of lower costs, better customer experiences and a head start  in pursuing new business opportunities.

While the full impacts of this disruption will not arise overnight, they will come a lot faster and sooner than most businesses and individuals are currently expecting. So, smart companies and executives are not waiting for the tsunami of disruption to reach their shores before they react. Instead, they are moving now to start the strategic dialogue needed to fully understand and prepare

for the disruptions before they arrive. Companies that take this proactive, far-sighted approach can turn the upcoming disruptions from an irresistible force that could sweep them away, into a massive

opportunity that they’re well-placed to realise. Put simply, the AI revolution is here—and now is the time to get ready for it.

Click here to get the full report from PWC

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