Tuesday, November 22, 2016

Investment in Digital Enterprise is Critical for Future Profits

By Jimmy Asher Director of Product Strategy for Savigent Software

A profound digital transformation is taking place within the world’s leading manufacturers. According to a research report released from Pricewaterhouse Coopers (PwC), companies surveyed expect to realize a total of $914 billion related to cost reductions and increased revenues per annum over the next five years. This isn’t simply hype; over 20% of companies are expecting to invest over 10% of their annual revenue in applications and infrastructure to support this goal.

While the upfront design processes are seeing positive impacts – will the remainder of the processes be able to see the same results?

According to the 2016 Global Industry 4.0 Survey: Building the digital enterprise, “40% of companies report that they believe that their product development, engineering and vertical value chains are already benefiting from advanced levels of digitization and integration.” There is no doubt that engineers now have access to a wealth of data that largely has been unavailable to them in the past. One of the elements that I like about this research report is that it is broken down into eight key findings across all processes:

1) Industry 4.0 from talk to action

2) Digitization drives quantum leaps in performance

3) Deepen digital relationships with more empowered customers

4) Focus on people and culture to drive transformation

5) Data analytics and digital trust are the foundation of Industry 4.0

6) Robust, enterprise-wide data analytics capabilities require significant change

7) Industry 4.0 is accelerating globalization, but with a distinctly regional flavor

8) Big investments with big impacts: it’s time to commit

Why is workflow orchestration fundamental to the application of the Industry 4.0?

I believe that workflow orchestration is fundamental to the application of Industry 4.0. What does that mean, you might ask? Workflows are the sequences of action that define the interactions between people, equipment and systems in the normal course of operations, as well as in response to unexpected events. They are the processes and procedures manufacturers strive to define, document and refine in order to improve quality, reduce variability and increase operation efficiency. With the right software, workflows will cut across all eight finding areas. A successful Workflow application should focus on digitizing all processes in an easy-to-understand format rather than locked in reams of customized code or point-to-point applications. Taking the process-first approach will enable agile growth across many areas – which may be different than the traditional thinking of a system-first approach. The study further details a “blueprint for digital success” with six steps to get started, which should be applied to a Workflow approach.

Source: PwC 2016 Global Industry 4.0 Survey

In summary, to capitalize on the predictions identified (and also results that some competitors are likely already gaining) you need to embrace a larger mindset. Industry 4.0 extends integration beyond vertical to the inclusion of customer and supplier needs within your products and services. This can be a large undertaking, but with the applications of different technology tools, such as Workflow, it is very natural and achievable. You should start now to share in the $421 billion p.a. identified by the PwC research report in cost and efficiency gains alone.

Related Links:

Report: http://www.pwc.com/gx/en/industries/industrial-manufacturing/publications/assets/pwc-building-digital-enterprise.pdf

Industry 4.0 Landing Page: https://www.pwc.com/gx/en/industries/industry-4.0.html