Recently, the Harvard Business Review’s Analytic Services released a white paper titled “The Data Dividend: Unlocking Performance Intelligence with Data-Driven Industrial Software,” which details the need for data-driven, end-to-end industrial software as a response to the shifting business world. The pandemic was a jump-scare for businesses who were unprepared for digital transformation and many are still dealing with the aftermath today.
A Move to Digital
In 2020, the pandemic affected every business as they realized the need for real-time transparency and the use of AI to help with the maintenance of resources. Production was affected as the need for a move to digital spread across industries. Maikel van Verseveld, the Global Manufacturing and Operations Technology Lead at Accenture Industry X, states “Organizations have gone through massive digitalization journeys in the corporate systems and customer-facing and marketing platforms but neglected the core operations.” There are gaps in supply chains and between operations and IT that need to be resolved for organizations to get their operations back on track. A primary problem is that these businesses are not yet digitally mature or have not fully completed their digital transformation. In fact, an Accenture global survey from 2020 revealed that the digital maturity of manufacturers’ end-to-end operations overall is only at 39%. The highest digitalization maturity comes from the oil and gas industry, which tops out at 59%.
Intelligence and Operating Income
Intelligence helps connect the power of technologies like AI with human knowledge. This allows for precise and strategic decision-making across your ecosystem that can make your business more agile and resilient. As the Harvard paper tells us, “Embracing a software-led intelligence effort yields profitable and sustainable growth because of the data-driven approach to optimizing engineering and operations.” Intelligence can help these organizations set and achieve efficiency, sustainability, and productivity goals, along with aiding employee well-being. As we shared in our last blog about data sharing ecosystems, unlocking digital capabilities and participation in those ecosystems can bring benefits to the entire organization, from the high-level executives to the lowest worker.
The investment in industrial software and digital has already been shown to pay off. One example is Moderna, whose digital operations allowed them to develop a vaccine to COVID-19 in months. This process has taken other manufacturers years to attempt. Using a digital backbone with cloud technologies, AI, and a feedback loop, the FDA was able to approve this vaccine for distribution. In fact, the aforementioned Accenture survey found a correlation between the investment of digital capabilities and the impact on operating incomes. Over 5 years, manufacturers have seen a 4% lift in operating income, depending on the size of the company. Other companies, like GSK in London and OPG in Ontario, have also seen their investments in industrial software pay off, with gains and savings for their business operations.
Multiple Data Sources
The white paper from the Ivy League school also hits on the usage of several data sources to anticipate and identify issues and gaps. Much like with data sharing ecosystems, investing in data creates an end-to-end integration of information, allowing businesses to profit and solve the issues that plagued them at the beginning of the pandemic. “Combining supplier, on-site, and customer data helps us anticipate and prevent issues before they happen,” Anthony Loy of Schneider Electric is quoted as saying. Identifying value-creation initiatives when implementing software can be difficult and time-consuming, but are necessary to thrive and push businesses forward. It’s also something that The Intelligence Exchange can help with as well.
In order to create the most optimal results and reach goals, businesses need to invest in digital capabilities to create intelligence and insights that will drive profits and bring in savings. However, digitalization is a difficult and time-consuming task. If an organization was impacted in the spring of 2020 and still has not reacted, they’re far behind the curve at this point. “Having [intelligence tools] enables a level of transparency…so that production can happen in the most efficient and sustainable way,” says Loy. Between investments in those digital capabilities and participation in data sharing ecosystems, transparency will play a part in both. Organizations that have not yet begun to take part in data sharing ecosystems due to hesitations could see themselves fall behind quickly if they have not already. The longer they wait to implement intelligence and insights, the fewer profits and progress they will see.
To learn more about how your organization can create an Intelligence Exchange and see operating income increase, reach out to us using the contact information below. And to read the full white paper from Harvard’s Analytic Services, visit this link.