Digital transformation of industry is no longer a nebulous concept or metaphorically lost in the clouds. It is a reality that integrates strategies and business processes, transforming the industrial landscape. Across industries customers have essential requirements – speed, flexibility, quality, and efficiency; and these must operate on a foundation of security. So, to meet these requirements digitalization is an imperative. Clearly, the digital transformation of industry has the potential to contribute significantly to global economic growth. The World Economic Forum estimates that Industry 4.0 alone could contribute more than $20 trillion to global gross GDP by 2020. I believe that digitalization transforms more than just businesses; it transforms our thinking processes and the way we interact with one another.
How our thinking and vocabulary have changed
Just a few years ago companies were still thinking and talking about the connectivity and convergence that the Industrial IoT (Internet of Things)/Industry 4.0 provides and whether it justified the return on investment. Now all those doubts have been dispelled. Words like “if, when, should we” have vanished from conversations; those have been replaced by compelling phrases, such as “we have to/ there is no alternative.” Organizations across the world have embarked on their digital transformation journeys and each one is at a different level of digital maturity. What I’ve observed is that as companies progress on their digital paths, their thinking processes and vocabulary have undergone a radical transformation.
Tracing the jargon for digital transformation of industry
About a decade ago there was “cut throat competition” among suppliers; each was battling for a bigger share of the market pie. Then came “collaboration” and “joint ventures” in certain projects or niche areas. Now it is the era of “coopetition” – cooperative competition at inter and intra organizational levels. I think this is the result of increased connectivity, operational transparency, and a flattening of hierarchical barriers spawned by digitalization. Presentations made at recent ARC Industry Forums and other global conferences highlight partnerships with erstwhile competitors, reiterating that collaboration across geographies accelerates growth. The focus is on connectivity and interoperability – not just between systems, technologies, processes, and people; but across organizations and geographies.
Departments/companies can no longer operate in silos; there has to be seamless integration between information and operational technologies (IT/OT) for any business to thrive today. But convergence is more than just a technology issue. Many end users experience organizational challenges as they merge IT and OT level responsibilities in their own organizations. The ever-increasing cybersecurity threat compounds this issue. A successful response must cover the full spectrum of people, process, and technology challenges.
Some significant benefits of IT/OT convergence:
- Reduced process variability
- Reduced energy consumption
- Improved product quality
- Improved asset health and reliability
- Incident prediction to avoid upsets
- Streamlined work processes
The future of the digital transformation of industry
That digitalization is an imperative to succeed in a competitive world is a given; but the transition must be well strategized and charted. Some companies already have a strategy for digital transformation along with a realizable roadmap, but it’s not going to be a smooth ride! This journey is likely to be punctuated with setbacks and unexpected barriers, so we must adopt industry best practices and learn from others’ experiences. And at every step we have to address challenges and adapt to new requirements with dexterity.
Remember, digitalization is not a destination; it is a continuous journey to achieve operational excellence.