Manufacturers Gain from IoT But Slip on Security

A BDO study finds that manufacturers are getting gains from IoT deployment even while they’re skimping on cybersecurity protection.

According to the data from a recent study, manufacturers are seeing significant gains in productivity and profitability from using IoT technology. Yet the study also found manufacturers are overlooking two critical pieces that could derail their progress: cybersecurity and R&D tax credits.

BDO, MPI Group, IoT, cybersecurity, R&D creditsThe IoT study – conducted by the MPI Group and sponsored by BDO – surveyed 374 global manufacturers on their readiness to incorporate smart devices and embedded intelligence within their plants and into their products. “The survey provides a gauge of IoT awareness and readiness among manufacturers and assesses the strategies and actions they’re taking to incorporate the IoT into business processes and products,” Rick Schreiber, manufacturing lead at BDO told Design News . “The goal is to shed light on the potential the IoT offers manufacturers in terms of growth and profits, as well as the new business risks it introduces.”

This is the second year of an annual study. Year-over-year results revealed a marked increase in IoT awareness and preparedness among manufacturers. “In last year’s study, few manufacturers had a strategy in place to apply IoT technologies. One-third didn’t even have plans to develop a strategy,” said Schreiber. “In addition, 67% of respondents reported no or limited companywide understanding of the IoT.”

That percentage dropped to 31 percent this year. The percentage of manufacturers with no plans to develop an IoT strategy dropped to just 13 percent. “Based on these huge drops, we think the IoT is finally on the radar for manufacturers.”

While manufacturers are initiating IoT programs and deriving benefits, they are still on a learning curve, trying to discover the best use and best practices of connectivity. “The IoT is still largely uncharted territory. All industries, not just manufacturers, are still trying to identify the benefits and risks,” said Schreiber. “Innovation doesn’t come cheap. Many manufacturers recognize that the IoT and the disruptive technologies it enables are the future of manufacturing, but they aren’t sure they can afford to make the investment.”

Biggest Gains May be in Manufacturing Processes

While many manufacturers are grabbing a market edge by enabling IoT in their products, BDO analysts noted that the largest benefits from IoT may be in the plant rather than in products. “Enabling IoT in manufacturing processes is where we’re seeing some of the biggest opportunities for growth and innovation,” said Schreiber. “About half of plant processes are currently managed via the IoT, up from an average of 31 percent in 2016.” He noted that a hearty 81 percent of manufacturers are planning to increase their IoT plant and process investments in the next two years.

Schreiber pointed out that connected plant processes are part of a larger effort toward advanced manufacturing. “The Internet of Things is just the first piece of a much larger puzzle,” said Schreiber. The IoT has the potential to transform manufacturing because of the additional technologies it enables – machine-to-machine communication, machine learning, robotics, virtual reality, 3D printing, and more.”

Bringing Cybersecurity into the Mix Too Late

While more than two-thirds of manufacturers report productivity and profitability gains from the IoT


Product security does not sell very well. Just as safety does not sell, security does not offer any apparent benefits to those who are clueless. That should be obvious to everybody. Internet connectivity without sufficient security is still the highly touted version of what is marketed. Of course there is no mention of the product being hackable by any seventh grade hacker, or being a handy spambot tool for those wanting to execute Denial of Service attacks. And change does not seem likely .

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