--- title: How Do I Justify An IIoT Investment To My Boss? description: "Many engineers and managers I meet with when presenting at conferences on Smart Manufacturing ask some version of the question: “How can we justify the extra cost of Industrial Internet of Things (IIoT)?” or “How do I convince management that we need an Industry 4.0 project?”" image: https://blog.innovatingautomation.asia/hubfs/Rich%20Text%20Pasting/unknown-1592377973984.jpg --- Document [![](https://www.balluff.com.cn/img/nav-logo-big@2x.png) ![](https://blog.innovatingautomation.asia/hs-fs/hubfs/Balluff_Logo.png?width=230&name=Balluff_Logo.png)](https://www.innovatingautomation.asia/?hsLang=en) [![](https://blog.innovatingautomation.asia/hubfs/Blog/earth.png) EN](https://blog.innovatingautomation.asia/) - [![](https://blog.innovatingautomation.asia/hubfs/APac%20Flag/Rounded%20Square/china.png) 中文](https://blog.innovatingautomation.asia/cn/?hsLang=en) - [![](https://blog.innovatingautomation.asia/hubfs/APac%20Flag/Rounded%20Square/japan.png) 日本語](https://www.innovatingautomation.asia/jp/?hsLang=en) - 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Posted by [Balluff](https://blog.innovatingautomation.asia/author/balluff) on Jun 17, 2020 3:14:25 PM Many engineers and managers I meet with when presenting at conferences on Smart Manufacturing ask some version of the question: “How can we justify the extra cost of Industrial Internet of Things (IIoT)?” or “How do I convince management that we need an Industry 4.0 project?” This is absolutely a fair and tough question that needs to be answered; without buy-in from management and proper budget allocation, you can’t move forward. While an investment in IIoT can deliver major payoffs, the best justification really depends on your boss. I have seen three strong arguments that can be adapted to a variety of management styles and motivations. ##### 1) Showing a ROI through Reducing Downtime “Show me the money!” I think everyone has a manager with this expectation. It may seem like a daunting task to calculate or capture this information, but by using a team, knowing your KPIs and applying anecdotal feedback, you can get a good initial picture of the ROI that an IIoT project will bring to the organization. Many people have shared with me that their initial project’s ROI has “funded the next project.” There is a really [great article from MetalForming Magazine](http://www.metalformingmagazine.com/magazine/article.asp?iid=142&aid=12046) that discusses how exactly to do this with the tables and forms they used at ODM Tool & Manufacturing. ![Will1.jpg](https://blog.innovatingautomation.asia/hs-fs/hubfs/Rich%20Text%20Pasting/unknown-1592377973984.jpg?width=537&height=691&name=unknown-1592377973984.jpg) ##### 2) Corporate Goals for Productivity and Utilization We can be successful getting support for a project when we link corporate goals to project goals. Smart Industry publishes a research project each year that investigates trends in the manufacturing space in regards to digital transformation initiatives. [This report](https://www.smartindustry.com/whitepapers/2018/smart-industry-2018-state-of-initiative-report/) cites that the three top benefits manufacturers are seeing are: improving worker productivity (3rd 2016), reducing costs (1st 2016) and optimizing asset utilization (2nd 2016). These goals are driving investments and showing actual results for manufacturers both large and small. However, the report also revealed that more than half of manufacturers cite workforce skills-gap issues as their largest roadblock and this is, I believe, why we saw improving worker productivity move to the top spot. We must bring efficiency and effectiveness to the people we have. ![Will2.png](https://blog.innovatingautomation.asia/hs-fs/hubfs/Rich%20Text%20Pasting/unknown-1592377973985.png?width=1078&height=422&name=unknown-1592377973985.png) ##### 3) Your Competitors are Investing in IIoT! If you have a boss that worries about falling behind, this can be a motivating argument. Control Engineering recently published a [study of manufacturers](https://www.controleng.com/single-article/2017-iiot-for-engineers-report-8-key-findings/b3fbfe3aea6982a33ef2ec76c409b788.html) and how they are investing in IIoT technologies. The largest investments are coming with sensors, connectivity and data analytics. But what is most shocking is that on average IIoT budgets are $328,160, with 18% budgeting more than a half-million dollars. If you want to keep up with the rapid pace of change in the global market, an investment in IIoT is a requirement to remain competitive. If you are looking for support and partnership on your IIoT projects, we are experienced at utilizing [IO-Link](https://www.balluff.com/en-sg/io-link-starts-with-balluff), smart sensors and RFID to enable [Industry 4.0](https://www.balluff.com/local/us/solutions-and-technologies/industry-40/) and Smart Manufacturing projects. 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