Manufacturing technology

The Internet of Things Rekindles The IT versus OT Debate

Manufacturing technologyA few weeks ago in Chicago, Cisco held its second annual Internet of Things World Forum. The first event was held last year in Barcelona, one of the most advanced cities in the world, and drew a few hundred people — not bad for an inaugural event. This year’s attendance more than doubled to almost 2,000 as interest in IoT continues to grow.

One of the common points that came up in almost every discussion I had was the IT (Informational Technology) versus OT (Operational Technology) debate. For those not familiar with this debate, IT is, of course, traditional corporate IT with a CIO leading the troops. OT, on the other hand covers the technologies that deal with operating the business. For example, in manufacturing this could be factory floor equipment, in field services its trucks, etc. OT is actually very broad and fragmented as its vertical in nature.

The IT versus OT debate isn’t a new one, although in many verticals there are clear demarcation points. IT people never deal with pumps, motors, conveyor belts, or heavy machinery. OT on the other hand rarely deals with laptop, desktop, routers, and switches. There are industrial versions of some devices, like ruggedized laptops and industrial strength switches that have no fans and are weather resistant but these are typically very specialized.

Historically, the clear lines of responsibility have made it easy to solve the debate, although in a handful of verticals, the lines do get blurry. However, the Internet of Things blurs the IT / OT lines greatly across more businesses in a broader set of verticals. In fact, I would argue that IoT success is highly dependent on IT and OT finding a way to work together.

A common goal for IT and OT is to ensure that all the proprietary protocols that exist in the world of OT are converted to IP. IoT will require IT and OT partnering to address security, interoperability and performance concerns. Multiple systems running on parallel networks using proprietary protocols will create an overly complex environment.

Given that IoT is about connecting the unconnected, it will accelerate the convergence of IT and OT and businesses must manage this transition to ensure the goals of both organizations are aligned. I know a lot of really smart IT people but their knowledge of OT issues and processes is next to nothing. The same can be said about the OT team and their knowledge of IT-based solutions. Bringing these two groups together will enable businesses to “think IoT” and develop new processes and make better decisions, which should lead to lower costs and reduced risks.

The verticals where I see this happening first are obviously the ones that will be IoT early adopters including public sector, manufacturing, healthcare, transportation, oil and gas, and utilities. For business leaders, that means the integration of not only people but also tools and resources used to manage both technology areas.

This emergence of IoT will have a bigger impact on the CIO than maybe any other position in the business world. The CIO’s scope of responsibility now includes the planning, deployment and management of operational technologies as well as traditional ones. CIOs now need to be concerned with not only connecting traditionally unconnected devices but also how to mine data from those devices, how to store the data, analyze it and use the results to make better business decisions.

After all these years, IoT will finally bring IT and OT together, but this change is more than just bringing the people together. Companies will need to evaluate the mixed team and align the people not on functional area aligned to IoT initiatives specific to their organization.

About the author
Zeus Kerravala
Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. He provides a mix of tactical advice to help his clients in the current business climate and with long term strategic advice. Kerravala provides research and advice to the following constituents: End user IT and network managers, vendors of IT hardware, software and services and the financial community looking to invest in the companies that he covers.

  • Michael Wm. Denis

    Excellent points Zeus Kerravala on the skills and focus of IT people and
    organizations vs OT people and organizations – since organizational challenges
    often dwarf technological ones.

    While your statement, “IT people never deal with pumps, motors, conveyor belts, or
    heavy machinery. OT on the other hand rarely deals with laptop, desktop,
    routers, and switches,” is generally true; there are some industries where IT
    and OT have worked together for many years, namely aerospace & defense,
    aviation and automotive.

    IoT will develop along two distinct paths, Industrial (IIoT) and Retail / Consumer
    versions (RioT) with IIoT leading the way as the consumer electronics side
    being literally a riot (pun intended).

    Lots can be learned across the spectrum from the work already accomplished in the
    aerospace and automotive industries in the areas of data architecture and
    standards, technical architecture, solutions architecture, business architecture
    and most importantly strategy architecture.

    Look at how business models have significantly changed in aerospace, where engine
    OEMs price, contract, deliver “thrust by the hour” (Power by the Hour,
    Performance Based Logistics, Goldcare / Total Care, …).

    Twenty years ago, engine OEMs sold engines and parts, whereas today they contract for lbs of thrust and uptime with bundled financing, in-service engineering,
    maintenance, repair & overhaul, parts pooling and more. Partnerships have
    been forced to change and technologies have advanced in the area of condition
    monitoring, diagnostics, prognostics, content lifecycle management, mobility
    and autonomics.

    This, in turn, has changed the strategies for providers (OEMs), consumers (airlines)
    and prosumers (3rd Party MROs and airlines in the for profit MRO
    business).

    As industries and companies transition to the “servitzation” of their “products”
    and implement Service Lifecycle Management strategies, capabilities and
    business models, the impact is far more reaching than many companies have
    probably considered. For instance, PBH/PBL contracts change everyone’s
    accounting rules for revenue recognition, asset capitalization, liabilities,
    and more (see AICPA Airline Audit & Accounting Guide).

    These are truly exciting times to be at the cross roads of IT and OT.