With Industry 4.0 and the rise of the Internet of Things (IoT), the heavy industries of manufacturing, construction, transportation and utilities are becoming ever more connected. Gartner forecasts that 25 billion connected things will be in use by 2021, capturing huge amounts of data information, including videos, images – all with the help of AI.
In order to do that, organisations are required to have the ability to understand data. In other words, they need to be data literate.
If organisations are to develop data literacy, the opportunity present is significant. Qlik’s Data Literacy Index states that if companies improve corporate data literacy levels, their enterprise value may increase between three and five percent, which equates to a staggering $324 to $534 million.
However, improving data literacy might be challenging for businesses operating in heavy industries. Leaders in the manufacturing, resources and construction, transportation and utilities industries admitted that they lack confidence in their organisation’s data literacy. In fact, businesses are falling short when it comes to data literacy. It is reported that although 78 percent of the global workforce are willing to invest more time and energy into improving their data skill set, only 34 percent of firms are currently providing data literacy training and just 17 percent “significantly encourage” employees to become more comfortable with data.
Part of the issue may be the value which leaders in heavy industries place on data literacy, or the lack thereof. Despite the ongoing conversation of Industry 4.0 and the increasing use of IoT, less than half of business leaders from the sector believe that data literacy is relevant to their industry.
This might be unlikely to change soon – just under a third of business leaders surveyed think data literacy is a very important factor when hiring, suggesting that it is not of priority for all.
This might seem like a contradiction – to have smart factories, meters, wind turbines, and connected housing; yet, limited desire to understand the data that all these innovations generate. One of the current issues is that, whilst leaders recognise the value of connecting production lines, processes and hardware, many are only looking at each part in isolation. So, for instance, that might mean investing in sensors to monitor heavy goods vehicles for maintenance, and separating the technology used for tracking locations, without thinking of how the two can work together. In effect, this creates data silos, where the lack of a complete view amounts to extracting a limited value.
The research results confirm this challenge, with few leaders expecting employees to be data literate – only 14 percent of heavy industry respondents significantly encourage their workforces to be comfortable with data, and less than a third (32 percent) provide data literacy training. Most tellingly, just a quarter of the sector communicated that they are willing to extend a higher salary to employees who are data literate.
That said, there are some areas which the heavy industries are focusing on. While the heavy industries reported a lower usage of data decision making than other sectors in the Index, they outperformed the cross-industry average when it came to data analysis. 37 percent of heavy industry respondents reported that data analysis influences the corporate performance measurement and demand forecasting, 11 percent ahead of the average. A deeper dive into heavy industries finds that 73 percent of engineers use data analytics, well ahead of banking (54 percent), the commercial sector (56 percent) or services (58 percent).
Is this light at the end of the tunnel, or merely a silver lining? With data analytics often being the first step in cohesive data comprehension, I hope the former over the latter. As with any industry, there are examples of manufacturers, utilities companies and logistics businesses understanding the power of data or rejecting it completely. Most sit somewhere in the middle, perhaps wrestling with contrasts and contradictions within their own organisation.
What is clear, though, is that ongoing investments are being made in technology to unlock new opportunities. In spite of that, true success will be out of reach without an increase of data literacy level. If these remain low, companies in the heavy industries run the risk of losing valuable ground on competitors and struggling to thrive in this data-driven era.
Article by Jeremy Sim – Senior Director, Industry Solutions, Global Manufacturing & HighTech and Retail
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