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INDUSTRY 4.0/IIOT SUPPORTING YOUR SOLID BUSINESS CASE
Anthony Loy, VP, Industrial Digital Transformation Consulting at Schneider Electric, explains how to build a coherent business case for digital transformation in manufacturing
he Covid 19 pandemic had a huge impact on every aspect of life and business – never had we seen such a clear divide between the digital haves and have-nots. Those who had already invested in Digital Transformation were able to quickly introduce much-needed applications, such as remote monitoring and operations, to ensure continued performance in an environment under stricter guidelines. Those who were unprepared worked to accelerate their DX journey, many investing aggressively to make up for lost time.
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Research from OMDIA, in partnership with Schneider Electric, shows that 94% of industrial companies perceive digital transformation to have an impact on operations in the next two to three years. A majority (60%) expect the impact to be considerable. As quoted in the report, digital transformation is becoming increasingly critical for businesses because “they are looking to implement data-driven solutions and improve operational and business performance. While access to data has always been important, the scale and complexity of operations have increased and now include plants distributed across multiple geographies and industry domains.” But just because digital transformation is important doesn’t mean that it’s easy to achieve. The main pluses to a successful digital transformation are greater productivity, energy and resource and quality. However, numerous barriers can block paths to these rewards. The OMDIA study shows implementation costs are considered the most important challenge, in terms of integrating digital transformation capabilities with the respondents' control system, followed by the identification of the right partner. In fact, more than half of companies identified this as a top three challenge. Cost of implementation was the most common challenge amongst operational technology (OT) managers, whilst partner identification and technology resonated amongst IT management respondents. There are also significant concerns around understanding what technologies to invest in, and by extension, the challenges in identifying the right partners, across program design, execution, and system deployment. As part of developing a digital transformation strategy, end users should first identify whether projects
22 SEPTEMBER 2024 | PROCESS & CONTROL are application or
technology-led, and then look to partners that can support this development. They must have a clear roadmap to how they (or an ecosystem of partners) can support manufacturers’ business
needs to meet the technology solutions. This preparation is key—according to Boston Consulting Group, almost three-quarters (70%) of digital transformation projects fail to deliver real business value. Ultimately, the biggest challenge is getting the entire business to buy into the project. So, how can this be accomplished?
Direction with clarity
Any digital transformation process must begin by mapping out business priorities. What do you most want to achieve out of it? What pain points are having the biggest impacts on your organisation? Why are you willing to carry out a disruptive project, whether that’s increasing capacity, improve productivity or optimise time to market? The first step to understanding digital transformation priorities is to uncover which process improvements are most urgently required by the organisation. Here, leaders will need to capture data from their process silos and then analyse that data to break down these silos - driving resilience and agility, boosting productivity, and cutting carbon emissions. Lead with applications, not technology; identify business pain points, then consider the applicable technologies. A digital transformation is also the perfect opportunity to introduce equally important business change initiatives, such as sustainability, cybersecurity, and supply chain integration. Many of these initiatives are closely intertwined with digital transformation, enabling the establishment of a holistic and inclusive business value program. For instance, if a business wants to be more energy efficient, it will first need to measure its energy consumption by collecting data across geographically-dispersed assets. This could potentially increase digital risks to the business - so leaders will need to address both their sustainability and cybersecurity performance. The divisions in businesses are clearer than ever - in a hybrid world, HR, IT, finance, and
other departments rarely have clear oversight over the challenges each is facing. A digital transformation can’t only be pinned on engineers; projects can only work if you bring teams together from departments and sites. A successful digital transformation will require cross group collaboration and involvement between IT, OT, Engineering Technology (ET), finance, the C-Suite, HR, and more. Ultimately, people supersede technology. Be sure to provide clear messaging, training and support so that people are equipped to use the technology and trust it won’t have a negative impact on their role.
A team with wide-ranging expertise will be able to bring as much background knowledge to a transformation as possible. However, a digital transformation will always involve a leap of faith to some extent. Delivering the Return on Investment on the first use cases selected will require leadership and organisation commitment in transforming the current way of working.
Hardware has set applications that are hard to evolve. With digital solutions, there’s a level of adaptability, agility, and visibility between departments, enabling you to continuously tweak their operations. You also need your teams to share this trust, so they can also commit to achieving the same desired results. Though the figures may show that you haven’t achieved a return on investment in the first few months, it’s crucial to keep faith in the process. Once you have more experience with your transformation, the next stages will become far more effective and innovative with an even speedier return on investment.
Usually, you’ll have more than one digital transformation project occurring at any one time. So, how can you track, manage, and be clear about the results of different projects? Often, you’ll need to choose and prioritise around two or three operational metrics, such as number of assets connected, number of users actively using an application, number of
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