Why Manufacturers Must Prioritize ‘Rate of Improvement’ Over ‘ROI’ in IoT and Industry 4.0.
- Chinmay
- May 6, 2025
- India, Industrial IoT, Internet of Things
- digital transformation in factories, industrial IoT success, Industry 4.0 India, IoT adoption challenges, IoT in manufacturing, manufacturing process improvement, operational maturity, Rate of Improvement vs ROI, Smart factory metrics, upskilling factory workers
- 0 Comments
Rate of Improvement vs ROI: The New Metric for IoT Success in Manufacturing
For decades, Return on Investment (ROI) has been the default metric to evaluate technology decisions in manufacturing. But when it comes to IoT and Industry 4.0, ROI is no longer enough.
Why?
Because IoT is not a one-time project — it’s a continuous transformation journey.
The Real Problem with ROI-Only Thinking
When manufacturers only ask, “How much money will I save this quarter?”, they miss the bigger picture.
IoT success is not just about cost savings. It’s about how fast your people, processes, and machines are improving every month.
That’s where a new metric matters more:
Rate of Improvement (RoI) — not Return, but Rate.
What is Rate of Improvement (RoI)?
RoI tracks how quickly your operations are getting smarter, faster, and more connected.
Examples:
- Are your machine downtimes reducing month over month?
- Is your shopfloor adopting predictive maintenance faster than last year?
- Are your supervisors learning how to interpret dashboards better each week?
This mindset shift rewards learning, adaptability, and people-first tech adoption.
IoT is Change Management, Not Just Tech
A new sensor on a legacy machine is only useful if:
- Workers trust it.
- Teams know how to use the data.
- Processes are updated around it.
That’s why real IoT success is behavioral and cultural, not just technical.
Companies that succeed with IoT don’t just install devices — they build habits.
Internal Upskilling = Hidden Goldmine
Most Indian factories underuse their biggest asset: people.
Upskilling operators, line supervisors, and even junior engineers to:
- Read machine data
- Interpret dashboards
- Flag anomalies
…can accelerate your Rate of Improvement faster than any expensive ERP upgrade.
Start small, but train deep.
What to Track Instead of Just ROI
Here are smarter success signals for IoT projects:
- % of shopfloor workers using digital tools
- Time taken to implement process changes
- Monthly reduction in manual errors
- Increase in data-driven decisions taken per week
- Number of improvement suggestions generated internally
These are signs of operational maturity — the true north star for digital transformation.
Final Word for Manufacturers
If you’re waiting for “perfect ROI” to start your IoT journey — you’ll never start.
Start with small wins. Track progress monthly. Celebrate internal growth.
Remember:
ROI is what investors care about.
RoI (Rate of Improvement) is what keeps your factory alive in the future.
