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October - 2016 - issue > In My Opinion
IoT Enabled Innovation
Prith Banerjee
EVP & CTO-Schneider Electric
Sunday, October 2, 2016
In this article, I would like to talk about IoT enabled innovation. At Schneider Electric, we believe that the connectivity of everything is accelerating the convergence of Energy, Automation, and Software-allowing us to deliver more advanced technology and innovation at every level. Before we get deeper into our innovation ecosystem, let's take a look into key trends driving our world to innovate better, faster, and farther.

The Energy Paradox:

Three megatrends are provoking a huge increase in energy demand. By 2050 the world's cities will be home to an additional 2.5 billion people; another 50 billion devices and "things" will be connected to the internet within five years; and industrial energy use will increase by at least 50 percent over the next 35 years.

Today we still depend on unsustainable CO2-emitting fuels for 85 percent of our energy, trapping as much heat in the atmosphere as exploding 400,000 Hiroshima atomic bombs per day, 365 days a year. Yet at the same time, we believe that access to energy is a basic human right-but 1.3 billion people have no electricity at all and another billion have only an intermittent supply.

Building a New World of Efficiencies:

So, we are facing an energy dilemma: consumption will grow by 50 percent and at the same time we must cut our CO2 emissions in half. The only possible solution is to become 3X more efficient. However, the majority of the economic potential to improve energy efficiency remains untapped. Think of buildings, machines, the Grid, homes, transportation and the list goes on.This is why we innovate. This is why we embrace the Internet of Things. This is why we believe connectivity and intelligence is a 21st century game changer. This is all about efficient innovation of new world of energy and automation.

At Schneider Electric we are uniquely able to embed connectivity and intelligence all the way from the connected products-like smart drives in a manufacturing plant to the edge control level, where we apply smart systems, IT architecture, and HMI technology to deliver increased reliability and safety-where our customers need it the most. Then we add software and applications on premise and in the cloud that enable advanced analytics, predictive maintenance, and augmented operators. What's amazing is that these innovations can be applied just as easily to city operations management or an energy utility as they can be applied to oil and gas, mining, or food and beverage plant management.

And finally there's the level of services that sit on top. In many ways services is the most transformative area of innovation. Delivering services built on the connectivity of products, control systems, and software enables new value to end users. Services can take on many forms from remote monitoring, to engineering in the cloud, to Asset Management, and Energy Performance Management services-transforming business models and the level of connection we can have with end users. Of course under all of this is theopen platform, which we call EcoStrxure.io-serving as the foundation and backbone of the interaction between data, intelligent devices, smart operations, digital services, and ultimately people.

Now remember two very important things. First is that innovation must serve a purpose, there must be specific end-user outcomes and valuethat could not have otherwise been achieved. Take the perfect example of predictive analytics and machine learning, both of which are powered by sensors and IoT and ultimately improve the availability, performance, and longevity of capital investments. And second it is important to understand that innovation requires partnership. At Schneider Electric we are practicing Open Innovation with information technology leaders such as Microsoft and Intel, universities such as MIT and Stanford, Venture capital firms such as Kleiner Perkins and Mayfield Ventures, Start up Accelerators like Tech Plug and Play, and various start up companies like Ohm Connect and Virtual Power Systems.

Making Management See the Value in IoT Innovation:
Having the right IoT architecture or strategy for your enterprise is one thing. But making sure Management sees the value in supporting and funding these new innovation projects is another. In my conversations with C-Level executives all over the world, I constantly hear their frustration that factory managers lose them in detailed technology discussions surrounding voltages, human machine interfaces, and protocol convergence. Instead, these top leaders look for how suggested innovation can provide savings, competitive advantage, or faster time to market.

I recently wrote in my blog that plant managers often struggle to convince CEOs across the industry to fund innovation projects. Most struggle to connect their proposal to business value. The good news is that"smart" manufacturing and the Industrial Internet of Things (IIoT) innovation shave radically altered traditional manufacturing rules. Now, plant managers can more directly translate factory floor performance into the CEO language of cost reduction and profitability.

Here's why it's easier for CEOs to now sign off on IoT-enabled plant innovation proposals:

- Until recently, the cost of extracting data from factory floor infrastructure has been prohibitive. Now, smart and connected things-including low cost sensors make equipment like valves, drives and circuit breakers intelligent. These devices have data to report that impacts both forecasting and investment strategy.
- Factory systems are converging with IT systems so that there can be more control at the edge (point of transaction). Edge control serves as a critical base for launching enterprise-wide efficiency improvement. This results in significant cost savings.
- Sophisticated analytical applications convert "big data" (and dark data) into highly reliable, real time, operational intelligence that enables far less risky business investment decisions.

The time is now for businesses to embrace IoT enabled innovation. Schneider Electric has decades of experience in enabling industries around the world drive innovation at every level. The result is unprecedented business value.

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