‘Seamless convergence is for vital operational excellence’
Published on : Thursday 16-01-2020
‘Seamless convergence is for vital operational excellence’
Greg Gorbach, Vice President, ARC Advisory Group, talks about digital transformation in the Indian context.
From the ARC Advisory Group perspective, how do you rate the push for digital transformation across industry segments?
In a connected world, digitalisation is an imperative across industries. Companies are at different points on the digital trajectory; some are beginning their journey, some are implementing changes in a phased manner, while a few early adopters are already seeing quantifiable benefits. The next several years will bring about the “digital transformation” of manufacturing industries. This will touch nearly every aspect of business as existing systems, jobs, and business processes are instrumented, redefined, and optimised with artificial intelligence. This transformation will be widespread and far reaching. Information technology (IT), operational technology (OT), engineering technology (ET), supply chain, asset management, services, and customer-facing systems will all be impacted.
How do you help reconcile the IT/OT/ET divide in organisations?
Traditional silos between the IT/OT/ET domains restrict the flow of data, information sharing, and decision making. Companies must look at breaking organisational boundaries and create flexible business models. Seamless convergence between the three domains is vital for an organisation to achieve operational excellence. Enabling these once disparate areas to work together also offers opportunities to better manage risk, more accurate financial planning, and make for a safer working environment. Siloed approaches expose vulnerabilities. Industrial IoT is driving convergence between the three domains.
The ARC approach is holistic rather than piecemeal – does this help in the Indian context?
Yes, I would advocate a holistic approach in all organisations across geographies. Because only then do you see the entire picture. Many Indian companies have adopted digitalisation and are quite high on the maturity curve. As digital capabilities improve and connectivity becomes omnipresent, technology is poised to quickly and radically change nearly every sector of India’s economy. While digital transformation is predominantly used in a business context, it also impacts other organisations such as governments, public sector agencies and organisations which are involved in tackling societal challenges such as pollution and collecting citizen information (like India’s Aadhar card) by leveraging one or more of these existing and emerging technologies.
The most important part of digital transformation is actually the people involved; it is just as important as the technologies, processes and infrastructure involved. Employees are essential to the digital transformation process and are key to its success. By cultivating a culture that encourages a digital mindset, a workforce will be better placed to drive an organisation's digital maturity and elevate it to the ranks of a digital leader.
ARC has launched a Digital Transformation Council to enable industry, energy, and public sector professionals driving or impacted by digital transformation to keep abreast of the many emerging technologies and business trends, to learn from others on similar journeys, and to leverage these trends and technologies to achieve transformational growth. Council members benefit from access to community of peers. We request more organisations based in India to join the DTC and learn and share experiences about their digital transformation journeys.
What is the present state of industrial automation in India in general?
The automation initiative is certainly gaining traction in India. According to industry estimates, the industrial automation market in India is worth $2 billion. However, the degree of automation varies across sectors. Consumer goods manufacturers have adopted Internet of Things (IoT) to track processes and deployed robots on the shop floor. Vehicle manufacturers are using augmented reality or virtual reality to train employees, especially those working on complex processes. In vehicle manufacturer Mahindra and Mahindra’s shop floor, 70 per cent of the body shop methods are robotic (earlier the workflow was manual). In other sectors, production drawings are being replaced with handheld devices and 3D printers, reducing potential errors. Larsen & Toubro is rapidly automating shop floors and construction sites. Reliance Industries is investing in virtual reality, which will be useful for training and testing of safety and reliability.
What are the barriers in the process of adopting more automation?
According to research conducted by ARC, although more than 80 per cent of industrial process manufacturers are piloting advanced technology, only 5 to 8 per cent of them are ready for digital transformation today. The main barriers to adoption, according to ARC, are organisational makeup and scalability of use cases and users while the biggest driver of digital transformation in the industrial sector is the need to address the business consequences of unplanned downtime. In my opinion, the main deterrent in most cases would be high initial investment and uncertain RoI from incremental automation. Many companies today tend to focus their efforts on technology, without considering the full organisational impact. Organisational and human elements are challenges when implementing a digital strategy. However, while some of the barriers may indeed relate to company culture, ARC research finds gaps in how digital programs address change and in the change leadership skills of the company’s digital advocates. These include conservative approaches toward adopting new technology; lack of skills; poor data quality due to poor data management systems and assets that have changed ownership; and cultural gaps between
operations, engineers, and IT professionals. The common missteps are: possibilities without direction; pursuit of technology without evaluating need and efficacy; and managing cultural impediments.
What, according to you, are 3 areas where 2020 is likely to witness disruptive changes?
The global technology landscape in 2020 will be shaped by the current wave of automation. Riding the crest of the wave will be:
Advanced Analytics and Machine Learning
The most noticeable and probably most important trend today is the proliferation of advanced analytics and machine learning (artificial intelligence, cognitive computing, etc.) The technology has reached a tipping point and can now deliver value in setting after setting. In turn, this fuels demand for smart connected sensors, digital networks, and other ways to collect and move data to the analytics systems – and vice versa. Is mass displacement of workers on the horizon? Perhaps. But it is clear that these technologies will result in substantial change.
Open Systems
We can see the drive toward open systems in two levels: the platforms/apps level and the automation level. At the platform/apps level, many of the competing cloud platforms are based on the open source Cloud Foundry platform. At the automation level, ExxonMobil and The Open Group are the primary movers behind an open process automation initiative, although Namur has a complementary effort in progress.
Edge and Fog
Cloud-only approaches can no longer keep up with the volume, latency, mobility, reliability, security, privacy and network bandwidth challenges of the industrial plant. Fog computing distributes compute, communication, control, and storage closer to where the data originates, enabling faster processing time and lowering network costs. Fog pools the resources and data sources between devices that reside at the edge and other nodes in the network. Any device with computing, storage, and network connectivity – such as industrial controllers, switches, routers, embedded servers, and video surveillance cameras - can be a fog node.
Greg Gorbach is an acknowledged industry leader in the digital transformation of industrial companies and IIoT. He is also knowledgeable about Operations Management and MES, and ERP and PLM software, especially in their interplay with plant systems.