Taking the time to self-assess and measure your company’s digitalization progress is worth it. Here are a few questions you and your teams can ask yourselves as you map out where you are and what you need to do.
For anyone who has been through a digitalization journey, you know what it takes. While software and digital tools are crucial drivers of this immense change, the journey itself is much more complex. It’s about openness; it’s about scale; it’s about smart applications; and most importantly, it’s about people. Digitalization has the potential to impact everyone and everything, across both your own operations and the entire value chain.
I lead a business that lives and dies with industrial digitalization. We develop software products designed to enable asset-intensive industries to digitalize. Our strategy is built on a pre-supposition that heavy asset industries must digitalize to survive and thrive. And in this movement towards digital, the landscape is incredibly varied. What I see is that some companies have made great strides, while others have a way to go.
So, where are you in your digitalization journey? Three questions to help you self-evaluate:
- Is data accessible to everyone within your organization?
True digitalization requires the smart use of data across your entire operation. Data is the fuel, so to speak, for you to extract value. But to extract value you need a place to store that fuel, refine it and make it accessible to all. Employees and partners across your company must be able to trust the data to use it in their decision-making, which is why it must be validated and reliable before they run their digital workflows. The data also needs to be packaged and contextualized in a way that makes it possible for the entire organization to use. It must be a ‘single source of truth’, in which the data is not only trusted, but open and available to all relevant users in a simple and intuitive manner, using the tools of choice. And finally, you need to be able to trace changes made to the data over time, all the way back to the point of observation.
Bottom line: Bring your data together across the organization, based on a robust data architecture that makes insights open and accessible for all, which will enable operationalized solutions across your business.
- Have you scaled digital solutions across assets?
Industrial digitalization doesn’t happen in one corner of a company, in a locked room, with a highly skilled team. That’s a project. Digitalization is comprehensive; it’s widespread; and it impacts all parts of your operation. Deploying any kind of digital solution requires one key ingredient: scalability. This is perhaps one of the greatest challenges of all in an industrial setting, because we are used to our silos and to project-based custom execution. More often than not, proposed digital solutions are related to a single one-off use case. We can fix this specific problem using the data from these particular sensors, for example. But an inherent part of digitalization is the ability to scale your solution, across assets and plans, breaking the silos, and engaging the entire organization and beyond.
Bottom line: Focus on selecting technology that allows for scale.
- Have you proven the value of digitalization with concrete and quantifiable output?
Most of us in the industrial world value evidence-based insight. Basically, we need proof before we make a decision. We read a lot about the potential of digitalization and the use of data to increase efficiency, streamline operations, reduce waste and emissions. But it’s hard to believe it until we see it. And to see it, you need to measure it.
The World Economic Forum’s Digital Transformation of Industries initiative predicts that digitalization will reap $100 trillion in value for society and industry by 2025. To get to this point, your business must recognize data as the asset it is, not a byproduct of your business. You need to extract it, mine it and use it in your decision-making. And then you need to measure the effect and share that with the entire company.
Bottom line: Once you have established a system for measuring and reporting the value of your use cases, make sure that this is widely communicated and understood by the entire organization and beyond.
Barriers to scaling digitalization and how to get past them
You’re locked in: It’s not news to anyone in our industry that many organizations are still locked into various file formats, software systems, or other outdated solutions that prevent them from using data effectively. This is, however, the single most important barrier to break down before being able to scale digitalization initiatives. Doing this will allow your vendors to continuously compete based on merit, performance, and scalability, rather than by locking you into their specific software. To achieve this freedom, you must avoid that system suppliers provide end-to-end vertically integrated software stacks that are not open and interoperable with other software solutions.
Your data is all over: It should no longer take too much convincing that data is a key success factor for scaling up digitalization, but the reality today is that data is still handled manually for the most part, and it’s quite dispersed. It’s a monumental task to automate the process of cleaning and organizing the data. If this rings true, then it may be time to explore a modern software solution that brings all your data together, one that packages it, contextualizes it, validates it and makes it available through a unified open source from which your entire organization can reap value.
Here, it is critical that one can access the data from a wide variety of solutions, ranging from simple industry-standard dashboarding applications, via more advanced low-code and ML/data science applications, to full-fledged industrial workflow applications.
Your organization isn’t committed (yet): As an industrial company, you’ve been around for tens, if not hundreds of years, and you have a certain way of doing things. But we’re in a pivotal moment in time. The technology is ready to redefine the way you operate, to save you time, money, improve safety, and reduce waste. And some industries are still struggling to embrace things like software as a service (SaaS) and proper implementation practices in the organization.
Broad organizational adoption of digital must take into account the people behind the change. Your people must be on board, upskilled as needed, and involved as solutions are implemented. It’s a collaboration in the purest sense of the word, because it’s the people driving the change who are critical to your digitalization journey’s success. Hence, importantly, you must also offer training and education of employees to ensure they have the appropriate skills - to motivate them to be a key part of the solution.
John Markus Lervik is the founder and CEO of Cognite AS. Lervik has a Ph.D from the Norwegian University of Science and Technology, Trondheim, where he was awarded the Esso academic award for his PhD work.