Digital Transformation – Challenges and Opportunities

We’ve seen a lot of commentaries lately from industry experts and gurus saying how the Industrial IoT and related digital technologies are driving change in the industrial sector.  Referred to as “digital transformation,” many analysts are suggesting that this kind of change is coming to the industrial world in a big way.  Certainly our customers are gaining significant value from it.

Digital transformation is all around us.  Social institutions and commercial sectors across the board have experienced it, and are still going through it.  Publishing is moving from paper to websites, e-books, and email.  The concept of money has been transformed by debit cards, online banking and bitcoin.  The face of retail has been disrupted by EBay, Amazon, and other online stores.  Even intimate, interpersonal and family relationships are being pulled into new shapes by smart phones, chat, and social media.

Opportunities for Industry

Now digital transformation is expanding from the intangible and social realms into the down-to-earth fields of mining, drilling, energy, and manufacturing―converting raw materials into physical products. Although the inputs, processes and outputs are physical, the information and data associated with them is abstract, and can be digitized.  And as we’ve seen in the domestic and consumer sectors, switching over to digital saves time and money.  There are big opportunities for those who can make the switch.

Jonas Berge, Director of Applied Technology at Emerson Automation Solutions wrote in a recent blog, “There is great opportunity for plant improvement and a great opportunity to sell the digital hardware and software, and to provide the associated services.”  He points out how digital transformation based on the IIoT opens opportunities in many areas, such as equipment monitoring, energy efficiency, and compliance with regulatory standards.

Ralph Rio, Vice President Enterprise Software at ARC Advisory Group, suggests that there are three areas for digital transformation in the enterprise:

• Re-engineering can be done on current processes by digitizing them.
• New services become possible as a result of digitizing processes.
• New business opportunities arise from a digitally transformed plant or company.

For example, a production machine may have a vibration sensor that lights a flashing red alarm on an operator’s control panel when irregular motion is detected.  The machine manufacturer might decide to re-engineer by digitizing the alarm, allowing it to display in a SCADA system or HMI.  By connecting to the digital data via the IIoT, the machine manufacturer can offer a new service―monitoring their equipment and sending status reports in real time to their customers.  They may also realize a new business opportunity by offering the work that the machine does as a service, rather than selling the machine outright.

Top Two Concerns: Security and ROI

According to Greg Gorbach, also a Vice President at ARC, there are opportunities in many areas, from additive manufacturing, edge processing and advanced analytics to smart products and factories.  And yet, there are challenges as well.  He points to a recent ARC survey that shows the top two concerns: security and ROI.  Security comprises issues like cybersecurity, data security, privacy, and confidentiality.  Taken together these are considered the top hurdle looming in the path towards digital transformation.

The other top concern is ROI, Return on Investment.  As we mentioned previously, the forecast for 2018 is that companies are starting to move from pilots and exploratory trials into finding solid business cases for IIoT.  Scaling up a system from a few test devices to dozens or hundreds has proven to be quite a challenge.  Companies are implementing technologies that were not designed from the ground up to handle large quantities of data, or a multitude of incoming connections.  Also, how to expand the vision from simple re-engineering project to new services and new business opportunities is not always obvious.

In addressing both of these concerns, security and ROI for the IIoT, Skkynet has a solid track record.  Our secure-by-design approach is unparalleled in the industry, and our flexible hybrid cloud solutions open a number of opportunities for digital transformation at all levels of a business. We plan to start sharing some of our success stories later this year.  Would you like yours to be one of them?  Contact us.