Machine-to-machine (M2M) adoption is widespread across multiple industries and ready for some human-to-human improvements, according to an industry benchmark survey conducted jointly by Manufacturing Insights, an IDC company, and M2M magazine. Two areas needing improvement are the Key Performance Indicators, or KPIs, commonly used for measuring the success of M2M deployments, and a fundamental shift in using M2M not just for automation, but for innovation .

When asked ”What existing business processes were replaced by M2M automation?”, 46% of respondents said M2M automated an existing manual business process, 28% reported putting a new process in place, and 26% said the application enhanced an existing business process.

Eureka!

“The survey results confirm that M2M is gaining recognition and traction, yet it is still implemented and managed as a technology rather than a mature business process,” said Peggy Smedley, editorial director and president, Specialty Publishing Company, publishers of M2M magazine. "To reap the full benefits of M2M technology, companies must use it to innovate business process, not just automate or enhance existing processes,” she added.

The KPIs

When asked, “What key performance indicators (KPIs) were used to measure the success of the M2M implementation?”, 53% of respondents cited ROI, 45% indicated cost reductions, while overall equipment effectiveness (OEE) and workforce utilization tied for the third KPI at 35% each.

When asked “Who selects these KPIs?”, less than half the respondents (42%) said upper management, 17% cited a committee of key stakeholders, and 14% cited an internal product champion. Only 20% said the KPI’s flowed naturally from set business objectives and represented corporate goals.

“To be effective, M2M projects must define KPIs that are aligned with corporate strategy and garner the support of upper management,” said Joe Barkai, practice director of Manufacturing Insights’ Product Lifecycle Strategies advisory service. “Furthermore, there is risk when a project is measured by self-fulfilling KPIs. M2M should be used to improve operational visibility and business process agility, rather than as a medium for cost cutting,” he continues.

More research highlights

Other survey findings released by Manufacturing Insights and M2M Magazine include:

• The top three industries represented in the survey were manufacturing (37%), oil and gas (12%), and utilities (12%).
• When asked, “Is your company currently using any M2M communications for device networking?”, 32% of respondents were using M2M in one area, while 49% were using it in multiple areas.
• The top anticipated benefits of M2M initiatives (prior to implementation) were cost reductions (67%), improved asset monitoring (55%), and improved customer service (52%).

About this study

Survey Methodology: Ninety respondents completed the online survey in May, 2007 and included M2M practitioners from the manufacturing, oil and gas, utilities, retail, government, healthcare, banking and insurance sectors, as well as M2M solutions providers.

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