Digital Transformation: Opportunities And Challenges

Digital Transformation Opportunities And Challenges

If there is a silver lining to the current pandemic, it is the realisation that digital transformation is no longer a prospect for the future. It is a tsunami that is already entered every aspect of our lives and deep into the industrial value chain. Players who learn to ride this big wave will reap enormous benefits. Digital transformation is not the future… it is current.

Today, more than ever, there is a demand for higher productivity and efficiency, ever shorter product life cycles, mass customisation and increasingly exacting safety and environmental protection standards.


Successful business leaders, at all levels in an organisation, always needed accurate, real-time access to operational and business data to better support decision making in this challenging environment.

The good news is that the scale and magnitude of the available data have increased exponentially thanks to constant performance gains in data communication and storage. This includes data from physical assets, from plants spread across multiple geographies, from internal ERP systems and from external market sources.

However, in its raw form, this also causes a data overload that hinders decision making. Business leader at various levels of the organisational hierarchy needs decision support systems to make sense from this data. That, in my opinion, is the Digital Transformation of Industries and their business leaders.

Applying The Best Strategy

The jury is out on what is the best roadmap to apply in the digital transformation journey. Certain organisations have taken the long view and invested in large scale transformation projects starting with data collection and getting the basics in place.

The goal, in this case, is the transformation itself. The advantage of this model is that of any structured business transformation… ie: long-term benefits. The disadvantage is that results are not visible immediately and the organisation could lose patience with the transformation process. The other risk is that one loses the agility in technology adoption.

Other organisations have gone with an agile mindset and targeted specific problem statements with specific solutions. The disadvantage with that approach is the mushrooming of disparate solutions with little or no integration. However, the advantage is the ability to show quick wins (or quick fails) and generate a certain positive momentum within the organisation. After all, every transformation is a change management process.

The ideal transformation journey should be able to combine the best of both approaches viz. take the long view while generating quick wins on a continuous basis. Each business leader needs to assess the reality of her organisation and choose wisely. Every win needs a celebration because managing this change is not going to be easy.

Challenges In Your Journey

And that brings me to the most difficult aspect of digital transformation. It is not the technology. It is about organisational change management. And unlike what many of us may be led to believe, the problem is really not at the level of general labour.

The challenge is very often at the middle management and the top management levels. Digital transformation is all about building decision support systems. It is not about collecting data for the sake of data.

For example, a maintenance support system might decide that a component is close to failure and is due for repair or replacement. Or on the other hand, it might have decided that it is good to go for another year. Does the maintenance manager have the confidence to go with that decision or would he overrule and erode value?

At various levels, decision making is meant to be autonomous. For example, a production expert system might decide to change a production setpoint to improve overall production efficiency. Does the production supervisor have the confidence to allow that or would she override this decision with “tried and trusted” setup?

As you can see, the end goal of a digital transformation is to reduce the burden of mundane tasks from the regular decision-makers. It is also about using more holistic information in making a better and more consistent decision than the various humans could.

This requires those decision-makers to scale up their knowledge to be able to accept the system’s decisions confidently. This also requires that the organisation be supportive of a willingness to fail and improve.

As technology learns and improves, there are bound to be missed opportunities. These should be seen as opportunities to improve, rather than proof of the failure of the transformation. After all, during change, the doomsayers are looking for failures. Organisations that cultivate a strong culture of continuous improvement will succeed.

One of the key value drivers behind digital transformation is advanced analytics and machine learning supported by big-data decision making. It collects, contextualises and converts operational, engineering and information technology data into actionable insights to support decision-makers at various organisational levels like the maintenance manager or the production supervisor or the sales manager.

Another value driver is autonomous operations. This can include functions like advanced process controls that handle multi-variable controls to steer the process to the most optimal setup. One could employ autonomous machines to operate in hazardous environments. ABB is a leading provider of solutions in all these areas, many of them offered under the brand ABB Ability™.

In the future digital enterprise, everything is connected. Data flows seamlessly between operational systems and business systems, enabling new capabilities such as process optimisation, opportunity loss management, activity-based costing, predictive maintenance and other data-driven decision making.

However, in most companies, IT and OT have lived for decades in separate worlds. A prerequisite for digital transformation is to overcome our old fears and bring these two worlds together.

Mitigating Cyber Risks

As the degree of connectivity increases, it is imperative to implement an in-depth cybersecurity strategy. Recent incidents of cyberattacks that brought down critical industrial facilities are useful case studies.

Unprepared corporates had to suffer massive losses and extended downtime due to the attacks. On the other hand, corporates that had stronger cybersecurity strategies were able to get up and running in a relatively short time with minimum losses.

The biggest mistake a corporate can make from studying these cases is to turn tail and flee from fully unleashing the potential of digitalisation. The reality is that most industrial systems are already exposed to cyber threats via the IT network.

For example, when the IT systems go down, it’s highly likely that work orders, inventory management, dispatches, etc cannot be processed. Also, there is no reasonable way to completely isolate the IT systems from the OT systems.

For example, it is inevitable that someday, a service engineer would inadvertently connect the service laptop to the internet over his mobile hotspot to download a manual or to get remote troubleshooting support.

A smart corporate recognises the benefits of a fully connected system while also recognising and counteracting these threats. Building and implementing a cybersecurity strategy that can mitigate such risks is not as sophisticated as it sounds.

Companies, like ABB, with vast OT experience and a proven track record of cyber-attack resilience, can help to define and implement these strategies in a pragmatic manner.

Achieving Sustainability

Beyond interoperability between the various elements and rising autonomy, the digital transformation also seeks to achieve a higher degree of sustainability. Digital technologies can help reduce climate burden. ABB created its “Mission to Zero” slogan to promote climate protection and has already achieved significant results.

ABB currently generates over half of its revenues with eco-friendly products and systems, and the trend is rising. Building automation products in the private and commercial sectors facilitate energy optimisation and convenient control of electrical equipment. Energy savings of up to 30 per cent can be achieved thanks to the digital transformation.

ABB has consolidated many digital transformation solutions for industries under the brand ABB Ability™ and is constantly expanding its range of products and services that build on a state-of-the-art platform. The portfolio currently comprises numerous applications that can be specifically tailored to customer needs.

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