As Oil & Gas industries face challenges of oversupply, weaker demand, and therefore lower oil prices, executives are looking for more creative solutions to maintain profitability. The Industrial Internet of Things (IIoT) opens up many opportunities to innovate and this hasn’t gone unnoticed by the industry.
Research, from the McKinsey Global Institute, suggests that by 2025, the impact of the IoT on the global economy could be as high as $6.2 trillion. So it comes as no surprise that research from Markets & Markets suggests spending on IoT solutions in the energy market is expected to climb to $22 billion by 2020. However, many executives face a limited understanding or perspective of the solutions available to them, given that the applications vary broadly and the overall trend is still in its infancy.
How the IIoT can transform business
IIoT solutions are a natural fit for any business looking to decrease CAPEX. For example, using IoT-enabled drones to inspect pipelines can be cheaper, faster, and more accurate than inspections by manned helicopters and cameramen. Clouds and analytics become closely linked, saving time and cutting costs.
New technologies have resulted in a growing shift to ‘as a service’ models that increase productivity and lower costs. These models allows for a flexible, ‘pay as you go’ approach seen in other industries, and are now beginning to affect cost control initiatives. More companies are taking cues from this model as they look to streamline their processes and reduce up-front costs.
The advantages of SaaS
There are several advantages of employing a Software as a Service (SaaS) solution. It takes less time to take to market, reduces internal responsibilities, and is more resilient in the event of a problem. These solutions can flex according to the size of the company, making them more appealing for those who want to minimize up-front costs. As explained in previous post Lessons in Cyber Security for Oil Pipelines, common concerns holding executives back from committing to these improvements are cybersecurity and compliance, but advances in these areas are developing quickly and minimizing risk.
The good news is that a number of businesses are driving IIoT solutions. These businesses can offer process efficiency, maintenance, safety, and even sustainable growth through decreasing CO2 emissions. With the rapidly changing face of IIoT and, as more solutions present themselves, the Oil & Gas industry should look to these businesses to support its growth and development.
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