Today's digital transformation of business and government will have the same effect. It will make short work of any organization that does not evolve rapidly. CEOs must quickly define where their organizations can compete for success, and lead them on that journey. If they can’t—or won’t—change, they risk fading away like the dinosaurs.
Following the industrial and then information revolution, if digital transformation is the outcome of the digital revolution, leaders must position their companies to ride this digital tidal wave. OT isn’t going away, but a rise in the convergence of IT and OT infrastructures means that evolution is necessary to survival.
Gartner predicts that there are in excess of five billion connected devices in use around the world today. This is estimated to grow to 50 billion IoT devices by 2020. In addition, IDC has predicted that IoT will be a $7 trillion industry by 2020.
The speed and complexity of this digital sea change cannot be overestimated. According to a recent study, 40 percent of companies at the top of their industries will be replaced in the next ten years. Yet, the same survey found that 45 percent of respondents do not think digital disruption is worthy of attention from their organization’s board of directors.
The move to digital puts every organization in jeopardy. It has already taken a huge toll on some and is gaining on others. For example:
- The iPhone wiped away the once popular BlackBerry.
- Once a market leader, Kodak declared bankruptcy as the photography market swung toward digital.
- AirBnB and Uber/Lyft are putting enormous pressure on the lodging and taxi industries.
- Additive (3D) printing threatens marine and overland cargo shipping companies.
Not all is gloom and doom, however. With the launch of Pokemon Go and its massive recent Apple partnership, Nintendo became relevant again by establishing a strong mobile platform.
For industry leaders, it is important to plan for the digital transformation proactively instead of just reacting to it. Would you rather be Netflix or Blockbuster? Nearly 30 percent of businesses worldwide have already begun limited IoT deployments, according to Strategy Analytics’ IoT 2015 Deployment and Usage Trends survey.
For companies still in business, it’s not too late to embrace the digital transformation. But they must act now. Organizations cannot wait for change to overtake them or it will sweep them away because they are not prepared and have not set up the infrastructure to adapt fast.
Preparing the infrastructure for change
The rise of the Internet of Things (IoT) is the digital catalyst. It opens up new worlds of possibilities because organizations now can extract data from network connected devices and sensors. This data was never available before.
Insights from this data might add enormous value to organizations. But they must reshape their current infrastructures in order to use their data effectively. And they must hire and train the right people to bring their digital change strategies to fruition.
One of the IoT's effects is to shake up the traditional siloes of information technology (IT) and operational technology (OT). These two were once separate and did not often communicate with each other. Now they must come together. It’s a huge and critical step in the digital journey.
The rub? Most do not know how to merge IT and OT. Neither IT nor OT professionals fully grasp converged IoT networking. They do not understand industrial IoT security. They are not fluent in endpoint data management and analytics. And they are not at all certain how all of the preceding will add value to their organizations. How will it lead to new business models? Or new services and revenue sources?
Finding answers to these questions takes new talent and the right training to update the skills of existing staff. Connecting 50 billion machines and devices is a huge task. The World Bank predicts that over the next decade, there will be 2 million unfilled information and communication technology (ICT) -related jobs worldwide. There will be a global need to train 220,000 new control engineers every year for manufacturing plant operations alone.
Due to its historic role of information processing, the IT department is better positioned to take the lead in the digital journey. Data from IoT connected devices is just one more information stream to parse, interpret and monetize.
But IT must collaborate with OT during the transition. After all, many of the sensors, devices, operations and software that comprise the IoT reside in the OT side of the organization.
For example, a steam valve system that controls water flow through a cooling apparatus, has and will continue to operate within the OT domain. However, manual intervention had been required to take its readings and make decisions. Now, in an IoT environment, the data is collected, analyzed and acted upon via the interconnected network and IT software that monitors all of the valve systems' parameters. Therefore, data generated from these OT managed devices and sensors is delivered across the IT system to take critical, real time action to maintain or drive to specific parameters.
Charting the IoT’s benefits for OT
Proponents of the IoT must make a good case about its benefits to OT and the organization as a whole. For starters, the IoT could boost corporate profits worldwide by 21 percent in 2022.
Safety and comfort are IoT benefits. Connected sensors and devices can measure and manage hazardous places at no risk to human beings. The IoT also can regulate the organization’s physical surroundings to control energy costs and boost comfort.
Efficiency is another IoT advantage. It will handle routine tasks like reporting misconfigurations and errors as they occur on automated assembly lines. The result? Higher yields and less downtime, improving profits.
Better decision-making is possible due to the IoT. Pulling trends from empirical data removes assumptions from the process. The ability to view how the system behaves can yield new insights and ideas.
The IoT's immediate effect? Lower costs and increased efficiency. In the long run, IoT data analysis leads to new revenue opportunities. All departments will benefit from the IoT.
What organizations must avoid is what happened in a major global pharmaceutical company. The IT and OT departments never talked to each other. Each went its own, separate way. Both built networks that actually excluded the involvement of the other. The company paid the price in unnecessary costs and reduced efficiency.
This cannot continue. In a major cultural shift, OT executives must align with current IT initiatives in addition to breaking out of existing silos. It is a tall order.
Today, OT executives are facing a major talent gap, in addition to a lack of process or any industry-recognized talent framework for IoT job roles and related trainings and credentials. Insufficient staffing and lack of expertise is the top-cited barrier for organizations currently looking to implement and benefit from IoT, according to research from Gartner.
In addition, the State of IoT 2015 Global Developer Study found that 51 percent of developers and chief information officers surveyed say they are uncertain they have the skills or resources to deliver on the promise of the IoT.
Industry leaders who engage in IoT are visionaries who are invested in the future. Now let’s explore how to lay out and follow a roadmap to a successful IoT strategy. Successful digital journey arise from two factors.
First is leadership. Organizations need to hire a digital champion with a firm IoT vision and the enthusiasm to motivate employees to make huge changes in systems and processes. CEOs recognize the importance of tying workplace culture to behavior, with 41 percent making changes to this aspect of their talent strategies. Indeed, companies that take bold actions to align their value proposition, capabilities, products and services together view their culture as their greatest asset.
Second is updated skills. The availability of key skills is a concern of 72 percent of the CEOs who responded in the 19th annual PWC annual Global CEO Survey. Both IT and OT need digital expertise. Training staff in this new expertise is essential for organizations to avoid the meteor and thrive in their digital transitions.
In the digital era, siloed behavior can turn any business into a dead dinosaur. Instead, organizations facing the digital journey should charge the IT department with leading the way and insist that it cooperate with OT.
(Photo: PA / Getty)