‘The right approach would be an architecture led transformation’
Published on : Monday 30-11--0001
An interview with Gangadhar Krishnamoorthy, Advisory Services, Ernst & Young LLP, Digital Manufacturing – IIoT & Industry 4.0.
While most companies are today talking of Digital Transformation, do all of them have effective strategies in place for implementation?
Today, it is widely recognised, be it manufacturing, consumer or services sector, information is power. Business leaders at various levels need visualisation of their customers, operations and related supply chain to make informed decisions, in a dynamically changing business environment, to operate with higher productivity, control cost and wastage. Most business rely on the network technology for sharing information, be it intranet – amongst employees or internet – with the customers or using web/social media with the general public. This constitutes a very small portion of information that can be shared as compared to the ocean of information that lies in the entire business process, in the form of data from the machines and appliances used, regarding their status, performance, health and usage. The capability to extract this raw data and convert it to information and there on build intelligence that can be used to achieve business objectives is the science of Digital Transformation.
Companies realise this. B2C companies are ahead and have adopted techniques to improve customer centricity by investment on “social reading”, supply chain analytics, etc. B2B companies are focusing on manufacturing operations – Production, Asset Management, Quality and Inventory KPIs. Many start with “use cases” to address their immediate problems and have initial success, but end up with standalone solutions. Some have invested heavily on a platform but have failed to move forward from there (due to lack of fund, capability and support). The right approach would be an architecture led transformation, where in a roadmap for transformation is created leading to a scalable, secure and flexible technology firm wide architecture and then bolt on “use cases” or solutions.
What are the impediments in the process of Digital Transformation in the Indian context? Is RoI the key concern?
While RoI and strong business case is required to justify the investment, Digital Transformation is unavoidable. The RoI might define the pace and the scale of adoption. The main challenges for Digital Transformation in manufacturing sector are:
- How to effectively adopt new disruptive technology alongside legacy systems complexity without excessive costs and disruption?
- With increased levels of external connectivity across processes and equipment, how to protect old Operational Technology (OT) against cyber threats?
- With increasing “digitalisation and “automation,” how will the organisation, talent and skills need to evolve?
As one of the main drivers of the economy, is the SME sector ready for this transformation?
Small & Medium Enterprises (SMEs) cannot afford to ignore Digital Transformation – it is a must-have today. India’s SME sector has been one of the primary drivers of its economy. The sector’s contribution to the country’s GDP is expected to increase to 22% in 2020. SMEs account for 45% of India’s total manufacturing output and employ around 40% of its workforce. This is an opportune time for SMEs to leverage this wave of technology with defined business strategies across the different sectors in India. In the last few years, three fundamental forces have been shaping the need of Digital Transformation strategies for industries.
- Emergence of young middle class in India
- Penetration of technology in urban and rural India, and
- Rise of social networks in India.
SME’s are the backbone of “Make in India” and are the promise of transformation in the Indian economy, fuelling jobs, maximising revenue and enabling sustainable development.
SMEs will thrive if key enablers powered by digital technologies are created in integrated ecosystems to support their following needs:
- Accessibility of knowledge
- Financial independence and mitigation of risk
- Targeted market reach and sales
- Operational excellence
- Efficient provisioning of services, and
- Real time insights and decision making.
How should the SMEs prepare for Digital Transformation?
Having said the above, for most companies this isn’t a big-bang approach. It is important here to understand where they stand, where they should aspire to get to, and their challenges thereof, at the individual plant level and across the entire enterprise. These factors include:
- Organisational culture: Specifically, how do decisions get made in production operations?
- Information: How well – and how widely – is information shared across the enterprise?
- Business processes: How well – and how richly - are production operations integrated with business need and demand?
- Fixed assets: How intelligent and connected are fixed assets within the plant?
- Systems and infrastructure: Is the technology foundation dated and inflexible or modern and agile?
Refer to the simple guide line to architecture led transformation.
Organisation Maturity Level |
Approach to Transformation |
What is Digital Transformation and how does it apply to me |
|
I know how Digital Transformation applies to my industry. How do I start |
|
I know how to start. Need specific services |
Evaluate technology and vendors for
|
I have started. Need support for global roll out |
|
Are privacy and cybersecurity concerns regarding the cloud exaggerated?
In spite of all the exciting possibilities brought about by the digital technologies, major challenges persist in implementing. The infrastructure that is used to create, store and share information may pose threats to privacy and security. The transformation program along which includes the organisation change management could become a threat if it is not designed wisely and used effectively governed by policy and regulatory frameworks.
Without a robust security infrastructure there can be no practical application of the Digital Transformation. From protection of intellectual property, IT networks in manufacturing systems, company and customer communications, security needs to be imbibed into the factory's architecture. Steps towards building a more conducive environment have to be two-fold, with more stringent government regulations for data protection and security, backed by a developed Security Services industry with the ability to manage advanced targeted cyber-security threats and attacks. And both, the government and the solution/platform vendors are continuously working towards it and have come a far way ahead in providing a secure environment.
Gangadhar Krishnamoorthy, Advisory Services, Ernst & Young LLP has been consulting in the field of the Digital Manufacturing – IIoT & Industry 4.0 for the past five years. He started his career with SAIL, in 1990, as a process automation engineer with hands on experience with erection, commissioning and maintenance of automation systems, instrumentation systems and electrical equipment in steel industry. He joined IT service industry in 2007 and was leading the MES Practice for Metal and Mining sector. He is Bachelors in Electrical and Electronics Engineering from College of Engineering Trivandrum and Masters in Software Engineering, BITS, Pilani.