Digital readiness key to ensuring industrial transformation success
Businesses should not have to spend valuable time and resources cracking the code to IX success: engage with subject matter experts
Neil Smith, VP Industrial Automation, Pacific Hub, Schneider Electric
Organizations across all industries are always seeking to improve. The idea is essentially the same: to improve operational efficiency, productivity, financial performance, and gain competitive advantage. More companies are deploying digital solutions and tools as part of their transformation strategies and therefore the pressure is on for the C-suite to figure out the best possible method to ensure industrial transformation success with the right technologies and business strategies.
Industrial Transformation or IX – a term coined by industry analyst LNS Research – is a subset of the more ubiquitous Digital Transformation and could be considered analogous to IoT and IIoT. Trends such as smart manufacturing, Industry 4.0 and connected assets are often mentioned in this context, but essentially IX refers to proactive and coordinated methods to integrate emerging digital technologies to improve industrial operations. Industry 4.0 et al. are merely a collective term for the result.
A recent study by LNS found that 45 percent of businesses surveyed have already embarked on an IX journey, while another 23 percent are planning on kickstarting their IX initiatives within one year. The report further notes that there is a wide gap between the 28 percent of companies that reported IX success – which LNS considers “IX Leaders” – and the 72 percent of companies that have yet to see any positive results. The findings are a clear indication that IX has become a key focus for industrial enterprises, but as the 72 percent might attest, it’s not the simplest of journeys.
Companies should emulate the IX strategies of those considered “leaders” or they may end up with less than optimal results and unfavorable returns on investment; choosing the right solution may be time-consuming, but there is help out there, if you know where to look. Stagnation in an IX journey in the digital era may not only hinder a company’s growth but might threaten its very existence. Just because a journey falters doesn’t mean it’s over. So, looking to the future, here are some of the ways IX leaders go about implementing their successful IX programs.
Focus on business improvement
Not all IX programs are drafted the same. There are some critical differences in how IX leaders plan and subsequently execute their IX strategies. For example, the top three outcomes that these leaders set their sights on were on achieving highest operational efficiency, creating competitive advantage, and creating new value for the customer.
In other words, they designed the IX program toward bringing tangible business improvements, in a meta sense, rather than focusing on improving internal processes x, y, or z. They are 60 percent less likely to make evaluating and testing technologies as part of their core strategy while preferring to deploy business process improvement strategies to design and be the driving force behind the program.
Invest in a wide range of technology
Business leaders must be willing to invest and pursue deployment of multiple technologies simultaneously.
As highlighted by the LNS research, 47 percent of the IX leaders deployed device connectivity, and incremental sensors and 42 percent of them have implemented digital twin solutions for their plants or operations.
Futuristic digital solutions such as Schneider Electrics’ EcoStruxure allows the creation of a framework in which multiple technologies can co-exist, while delivering new business opportunities for industries (with minimal CAPEX and OPEX overheads).
Get everyone onboard
Another factor that stands out among the IX leaders in the LNS study is that they are highly inclusive and get everyone involved with their IX initiatives. By deploying top-down and bottom-up approaches simultaneously, the organization relies on the C-suite leadership to approve the budget, define, refine and drive transformation, while at the same time actively engaging their operational workforce, engineering, and even quality control personnel to advise. After all, the workers “at the coal face” will be implementing the changes.
Getting everyone on board with the project ensures that there is both enough financial resources and subject matter expertise throughout the entire transformation journey.
Increase both CAPEX and OPEX
Leadership is paramount in getting a strategic project off the ground running. And one aspect of leadership is to be able to secure budget allocations to be invested in IX initiatives, including pilot programs and proofs-of-concept (POC). Further, leaders need to ensure that projects are not stuck in pilot phases and drive an effective program forward with increasing OPEX funding.
The findings in the LNS research further solidifies this notion, where 85 percent of companies among the IX leaders said their top management actively drive promotion of IX change. As an aside, it’s worth noting that those same IX leaders also fund the transformation strategies incrementally, rather than carving funds out of current budgets.
Establish a strong IT/OT foundation
Another important indicator of digital readiness among organizations is the robustness of their IT/OT foundation, as deployed across their entire business. The LNS research found out that almost half the IX leaders effectively utilize standards in OT across all or the majority of systems while the less successful only deploy common OT in discrete geographical locations or separate business units.
But businesses should not have to spend their valuable time and resources cracking the code to the solid IT/OT integration and rollout that is required as a key component of an IX strategy. Instead, we suggest you engage with subject matter experts such as Schneider Electric. With innovation at every level, Schneider Electric offers solutions that are agile, scalable & flexible and are fully integrated with existing systems. The company’s track record in industry, and in helping organizations on every continent with IX strategies is second to none, and a testament to its many decades of experience.