In a push to stay relevant in the competitive transport landscape, European transport companies are looking to Internet of Things (IoT) solutions to beef up their operational efficiency and reduce downtime, repair times and delays.
Market research and strategic consulting company PAC has conducted an in-depth study to find out how large and medium-sized European transport companies see and approach IoT initiatives from a strategic, implementation and operational perspective.
The report, “IoT in the Driving Seat of Digital Transformation in Transport” is based on briefings with more than 200 senior business and IT executives at medium and large companies operating in the airline, railway, road and maritime transport markets in Europe.
83% of those interviewed are ready to spend more on IoT, which reflects a strong appetite for technology that can increase efficiency and make a tangible business impact. Almost one third of companies are already bearing fruit with their IoT solutions while a further 26% are running pilot projects and are yet to feel the first business impacts. As results continue to appear, PAC expects that spending on IoT will increase even more.
For 73% of the companies surveyed, achieving cost savings and increasing efficiency is the major driver, while creating new services and business models is also a major driver for more than 50%. This indicates that, apart from improving decades-old processes around fleet servitization, many companies can see the bigger picture of IoT and recognize its strategic importance in enabling top-line growth. The specific IoT applications that most companies have invested in are smart ticketing, telematics and security solutions.
From a regional perspective, there are no large-scale differences in adoption between the regions. However, companies of different sizes are not showing the same appetite for IoT initiatives. For example, the study reveals that larger companies are much further down the IoT road than their smaller peers, and most of them see IoT as a very important enabler for strategy and future growth. This is due to the high pressure they feel from the market and the stronger imperative they have to optimize their complex operations. Industry-wise, the clear leader in adoption is the airline sector where almost two-thirds of airline carriers are already enjoying the benefits of IoT.
Due to growing threats in the cyber and physical worlds, the major challenge with IoT initiatives is to ensure data security and privacy, as well as dealing with the changes in the organization which occur as a consequence of adopting new IoT solutions.
Dr Milos Milojevic, Industry Analyst at PAC, said: “The transport sector shows a very good level of maturity when it comes to IoT adoption, even beyond proof of concept stage, as 31% of companies are already feeling business impacts. Moreover, as 77% of companies see IoT as very important for their future growth and strategy, PAC expects that demand for large-scale IoT solutions will surge.”