First came water and steam power, then division of labour and mass production, followed by a period of automation and computerization. The current fourth industrial revolution represents the combination of cyber-physical systems, the Internet of Things (IoT), and the Internet of Systems.

The Industrial Internet of Things (IIoT) describes the use of IoT technologies within industrial applications. Canadian industrial businesses will need to leverage IIoT to evolve their operations and optimize efficiencies at all stages of work, according to Schneider Electric, which recently hosted an energy industry workshop on the IIoT with JWN Energy.

The Inspired Conversation event provided an opportunity to gauge industry sentiment of the IIoT applied in the oil and gas industry — sometimes referred to as the digital oilfield — and assesses the barriers that hinder uptake of the technology. It included technology-focused subject matter experts working in energy, engineering, construction, mining and petrochemicals.

IIoT technology has never been as relevant as it is now, according to Martin Stephenson, Schneider Electric vice-president, Process Automation Canada. The current economic downtown brought on by the collapse in the price of oil in 2014 has brought efficiency to the forefront, he said.

In today’s lower commodity price environment, industry is focused on capturing every barrel of oil, as opposed to in the past, where a few inefficiencies made less of an impact on the bottom line. While people in the industry understand the value of technology and innovation, the struggle remains on how to actually start the journey, he said.

The main bottleneck to IIoT adoption is not the technology itself, but the people involved — or reluctant to get involved — in its implementation, many workshop attendees said. Corporate culture, both within the industry and within organizations, was listed as the single largest barrier to IIoT adoption, according to the recently published report summarizing the workshop, Industrial Internet of Things: How to Future-Enable Your Enterprise.

“The oil and gas industry’s culture is to play cards close to the chest. It will be difficult to move from a protectionist industry that does not like to share ideas or data, to one that does. Companies do not want to share their data, because they do not currently see the value in doing so,” states the report.

It was suggested by participants that energy companies either are not overly concerned that they may be falling behind in digital technology adoption — and are generally resistant to change — or that they do not comprehend that they are behind, diminishing enthusiasm in digital oilfield technology adoption. There was also concern expressed around who should bear the capital costs for technologies that span the supply chain and/or pull data in from multiple partners. It can also be costly to be a technology pioneer, and companies prefer not to be first to adopt due to fear of the unknown.

Within specific organizations, attendees felt that cultural barriers centred on the role of leadership, generational differences and the information technology/operational technology (IT/OT) divide — the lack of communication between departments.

To support the necessary culture-shift, a leadership team should set the tone by creating an overall mission/vision statement that employees can get behind. The team should emphasize the long-term value that IIoT innovation will bring for efficiency, facilitate necessary investment and implement the changes that will support tech innovation, the report states.

The value must be shown to be beyond the bottom line, and should include the sustainability of the company itself — this will build trust. Getting buy-in, especially from middle management, can be aided by aligning performance incentives to support technology adoption and by communicating how technology can benefit employees by improving their jobs.

The cultural shift can also be advanced through the sharing of business case successes that highlight real examples of returns derived from technology adoption. Companies should celebrate small wins over the long-term and instill a company-wide “if you fail, fail fast” mentality to support positive cultural change.

Being transparent with predictive analytics findings can be a key driver in increasing industry profitability, the report says. “Along industry verticals, companies adopting IIoT and predictive analytics will have an established platform to gather and analyze data. Companies can compare the analytical output they receive with that of their peers, and they can collaboratively work together to achieve best practices in the industry.”

Asset life cycle management is an area of IIoT where there is potential for substantial gains from IT and OT collaboration, the report adds. IT and OT generally have their own systems for tracking their assets. IIoT technology can be used to ensure information systems’ and operations’ assets are available (minimizing downtime) and performing optimally (achieving high performance). This streamlines the life cycle management process.

Data veracity (accuracy) and data volume can also present barriers. Data might be used for a different purpose than it was originally collected for (i.e. the requirements have changed over time) and challenges can occur either at the point it originated or through the chain of custody. Putting in processes to improve data accuracy enables employees to have access to better data and will result in better analysis and more informed business decisions being made.

Data veracity can be improved by implementing processes to document all data touchpoints; understanding and evaluating what data is being collected, where the data is from and for what purpose; and ensuring data is synchronized. “This requires developing a process for data integrity involving assessment, plan, design, build and optimization. By instituting a sound process, a business can establish a robust system for all its data requirements allowing for better data gathering and collection, validation, synchronization and analysis,” the report states.

Additionally, employees are more likely to understand the data, and the big picture, if it can be visualized. Companies should facilitate intuitive visualization of the data (e.g. dashboards) and demonstrate how it can be effectively used.

In addition to discussion around barriers and advice, workshop attendees evaluated elements of a successful business case, including value, dollar and risk. Dollar is easy to assess, but value and risk are more difficult to quantify. Aspects such as safety and cost are important drivers of a successful business case.

“There is more capital investment at the front-end of a technology implementation, but efficiencies and savings are gained throughout the lifecycle,” notes the report. Risk-benefit analysis and gains to social licence to operate and are among other aspects that should be considered as part of the business case.

“Embracing IIoT will enable businesses to explore unprecedented operational effectiveness with informed employees, transformative business models with smart control, and new levels of safety and security with optimized assets,” the report concludes. “While challenges around implementing IIoT and leveraging its full potential still exist, there are proven tactics that can make the transition more seamless. Openly sharing best practices within industry will be key to shortening the learning curve, and ensuring the sustainability of Canadian industrial businesses.”

To download the full report, click here.