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Recognizing Digital Transformation Does Not Equate To Achieving It

Two research studies have crossed my inbox recently regarding management knowledge of and actions toward Digital Transformation and the Industrial Internet of Things. Suffice to say that there is a disconnect.

Get smart: Humans have perceived for millennia the disconnect between knowing and doing. These research surveys show that even when managers acknowledge the importance of modern digital technologies they cannot get the job done.

Big Thought: Implementers have realized significant cost reductions and increased speed of product development.

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The first study was conducted by enterprise business solutions provider, HSO. It found 54% of managers in the manufacturing industry believe that their company is not effectively using predictive engineering technology, despite the technology being billed as a leading industry trend.

In an era that has been dominated by the rise of IoT and predictive analytics technology, it was also surprising to find that only 15.2% of those polled placed predictive engineering as a business priority for the next five years.  In addition to this, a quarter of the 250 managers involved in the study feel that a lack of integrated technology across different departments is the main reasons that firms do not implement predictive engineering.

However, the study did reveal that more than four in ten managers in manufacturing feel that the rise of IoT technologies is crucial to help drive predictive engineering, with artificial intelligence and machine learning also being rated as important factors.

Out of the manufacturers that are using predictive engineering to help make their processes more efficient, over half (55.6%) stated that they are benefitting from significant cost reductions while 44.8% are seeing an increase in the speed of product development.

A second study by IFS, and enterprise applications provider, found lack of integration stands between companies and digital transformation benefits of IoT. According to a survey of 200 IoT decision makers at industrial companies in North America, only 16 percent of respondents consume IoT data in enterprise resource planning (ERP) software. That means 84 percent of industrial companies face a disconnect between data from connected devices and strategic decision making and operations, limiting the digital transformation potential of IoT.

The study posed questions about companies’ degree of IoT sophistication. Respondents were divided into groups including IoT Leaders and IoT Laggards, depending on how well their enterprise software prepared them to consume IoT data—as well as Digital Transformation Leaders and Digital Transformation Laggards depending on how well their enterprise software prepared them for digital transformation.

The two Leaders groups overlapped, with 88 percent of Digital Transformation Leaders also qualifying as IoT Leaders, suggesting IoT is a technology that underpins the loose concept of digital transformation. Digital Transformation Leaders made more complete use of IoT data than Digital Transformation Laggards; Leaders are almost three times as likely to use IoT data for corporate business intelligence or to monitor performance against service level agreements.

Digital Transformation Leaders were more likely than Digital Transformation Laggards to be able to access IoT data in applications used beyond the plant floor. They were more than four times as likely to have access to IoT data in enterprise asset management software, twice as likely than Digital Transformation Laggards to be able to access IoT data in high-value asset performance management software, and almost twice as likely to be able to be able to use IoT data in ERP.

The data suggests a real need for more IoT-enabled enterprise applications designed to put data from networks of connected devices into the context of the business.

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