The return on investment (ROI) from the Industrial Internet of Things (IoT) is about translating collected data into measurable savings and increased efficiency. The key is to focus on three areas: reducing maintenance costs, optimizing performance (OEE), and smart energy management. In this article, we’ll show you how to calculate and implement it step by step.
What is IoT ROI and Why is it Crucial in 2025?
Before we dive into the numbers, let’s cover the basics. IoT ROI is a metric that shows how much you gain in relation to how much you invested. In 2025, this is no longer a tech novelty but a strategic necessity. The IIoT market is growing exponentially – analysts at Mordor Intelligence forecast its value will exceed $154 billion (Source: Mordor Intelligence, “Industrial Internet Of Things (IIoT) Market Size & Share Analysis,” 2025). An investment in technology without a clear financial goal is just a cost, and understanding ROI allows you to make informed decisions that build a real competitive advantage.
Where’s the Money and How to Calculate Them?
Your IoT investment can pay off in many ways, but three of them generate the largest and fastest returns. Below, we compare them and provide a simple way to estimate the potential benefits.
Table: Key Sources of ROI in Industrial IoT
| Area | How does it generate savings? | How to estimate potential ROI? | Proven Market Data |
| Predictive Maintenance | Instead of reacting to breakdowns, you predict them and schedule repairs, eliminating costly unplanned downtime. | (Number of unplanned downtimes per year) x (Avg. cost of downtime/hour) x (70% downtime reduction) | 25-30% reduction in maintenance costs and 70-75% decrease in downtime (Source: Deloitte, “Predictive Maintenance Position Paper”; Oxmaint, “Predictive Maintenance in Manufacturing: ROI Guide,” 2025) |
| OEE Optimization | You identify and eliminate hidden micro-stops, slowdowns, and quality issues, producing more in the same amount of time. | (Value of production/hour) x (15-20% OEE increase) x (Number of operating hours per year) | 20-30% increase in productivity and significant OEE improvement (Source: Source: IIoT World, “Use of IoT and OEE for improving the performance of production,” 2025) |
| Energy Management | You monitor energy consumption by individual machines and processes, identifying areas of excessive use and optimizing them. | (Annual energy cost) x (Potential 5-15% reduction in consumption) | Manufacturing companies can reduce energy costs by up to 15% (Source: Pima Controls, IIoT implementation analyses). |
IoT or New Machinery – What’s Better for My Situation?
This is one of the silent concerns of many managers. The truth is, one doesn’t exclude the other, and IoT often allows you to extract more value from the machines you already own.
| Criterion | Investing in a new machine | Implementing an IoT platform |
|---|---|---|
| Main Goal | Increase production capacity | Increase the efficiency of existing assets |
| CAPEX | High, one-time cost | Lower, often in a subscription model (SaaS) |
| Implementation Time | Long (order, installation, ramp-up) | Short (often weeks, not months) |
| Risk | High (investment in a single asset) | Low (scalable and testable) |
| Best for… | Companies that need to increase volume and have a secured budget. | Companies that want to reduce waste, improve quality, and make data-driven decisions. |
How to Implement IoT Step-by-Step to Ensure Maximum ROI?
An effective implementation is not just about technology, but strategy. To avoid the trap of “collecting data for the sake of collecting data,” follow these proven, business-focused steps.
- Step 1: Audit and Identify Bottlenecks
- Goal: Understand where you are losing the most money today. Is it downtime? Quality issues? High energy consumption?
- Action: Conduct a workshop with your production and maintenance teams. Define the top 1-2 problems to solve.
- Step 2: Pilot Implementation (Proof of Concept)
- Goal: Confirm the technology’s value in a small but representative area—e.g., one critical machine or line.
- Action: Connect the selected assets to the IoT platform. Collect data for 2-4 weeks and compare it with historical data.
- Step 3: Analyze Results and Calculate ROI
- Goal: Translate the pilot results into hard financial figures.
- Action: Use the formulas from the table above to calculate real savings. If the pilot on one machine reduced downtime by 50%, you can easily estimate the potential for the entire plant.
- Step 4: Scale the Implementation
- Goal: Expand the system to other machines and production areas, maximizing profits.
- Action: Based on the pilot’s success, create an implementation roadmap for the rest of the facility, prioritizing areas with the highest ROI potential.
FAQ – Frequently Asked Questions about IoT ROI
Yes. This is one of the biggest myths. Modern IoT platforms, like IRIS77, can collect data from almost any type of machine, including older ones, using universal sensors and communication protocols. Often, the greatest untapped optimization potential lies within an older machine park.
A simple system tells you what happened. An advanced IoT platform with an AI layer, like IRIS77, tells you why it happened and what will happen next. That’s the difference between having data and having actionable insights and recommendations.
The risk is minimal if you follow the Proof of Concept methodology. Instead of investing in a full-scale deployment right away, you prove the technology’s value in a small, controlled area. This allows you to make the decision to scale based on real, measurable results from your own production floor.
Ready to stop guessing and start calculating? Schedule a free, 30-minute online workshop, where we will help you identify the biggest sources of savings in your company and estimate the potential return on your IoT investment.