Many of the business leaders attending the AOG conference understand the power of digital. They see the potential for digital technologies to bring about transformation and growth. And many are making big investments in a wide variety of cutting-edge technologies. But many simply aren’t getting the most out of their digital investments.
What’s the evidence? A recent Accenture survey explored how companies deploy digital technologies and the benefits they derive from them. What we found is that only 13 percent of organisations are getting greater efficiency, cost savings and business growth from their digital investments.
That’s a low number, but the good news is that the analysis identified that energy companies can, on average, realise additional gains of more than US$16 million—in terms of market capitalisation—if they combine technologies such as virtual reality, big data and artificial intelligence.
It turns out that too many businesses are still deploying digital technologies in a piecemeal fashion, with the resulting benefits flowing (naturally) to only one part of the organisation. Other barriers highlighted include difficulty articulating the business case, concerns about the security of data and the ability to realign the organisation to make best use of digital.
At this year’s AOG conference, Accenture’s booth will have an IIOT Digital Plant simulation that will showcase how these technologies can operate to drive growth. Companies must do more than just change themselves into digital businesses beyond implementing the latest in digital technologies. They must completely reinvent their operating models, production and value chains to create more value with digital.
Accenture’s research has identified four imperatives to derive value from digital technologies.
Transform the core
Organisations need to build their core engineering and production systems around digital to drive new levels of efficiency. Physical machines and software systems are synchronised to unlock previously unseen cost efficiencies – thus driving up investment capacity.
Caterpillar, for example, make smart use of data generated from connected machines through its Cat Connect solution. Relaying key data on equipment performance to mine operators who then analyse the data and make decisions on how to improve efficiency, boost productivity and enhance job-site safety. Thanks to Cat Connect, machines now run for 48 hours straight, and the company’s fuel costs have decreased by 40 percent.
Build a digital ready workforce
Companies need to source, train and retain talent with digital ready skills and encourage active collaboration between people and machines.
Airbus, for example, equips factory workers with industrial grade smart glasses to determine aircraft cabin seating design. Using contextual-marking instructions, the smart glasses display the required information for workers to mark the cabin floor quickly and accurately for seating to be installed. The glasses also let workers scan barcodes printed on the cabin parts, retrieving critical equipment information from the cloud and displaying it on the glasses through augmented reality, all with voice commands. As a result, productivity for the cabin-seat marking process has improved by 500 percent, and the error rate has dropped to zero.
In our experience, achieving business value is dependent on establishing the right behaviours across the organisation. This includes developing new skills such as design thinking, agility and collaboration, as well as rethinking the approach to innovation with a reward system that gives “permission” to fail fast or, “adjust and scale-fast” once proven.
Enable the infrastructure
Technology is a key enabler and organisations need to orchestrate the combinatory benefits of deploying multiple technologies while managing the key risks of security and data resilience. It is therefore critical to put in place platforms and operating models to address the consequences of digital convergence across: the business information technology applications and social media; the operational technologies of mission-critical control, automation and real-time systems; and the engineering data systems.
Re-architect new ecosystems
A robust ecosystem of suppliers, distributors, start-ups, and customers needs to be created to allow new business models to be scaled across the digital value chain.
Building a digital organisation (including new digital hubs that are not constrained by legacy corporate rules) consists of new ecosystems that can exploit the value of digital through partnerships, alliances and sometimes even relationships with so-called frenemies.
The AOG conference is a platform for industry leaders to learn and exchange ideas about the role digital must play. Is this future scary or bright? It’s probably a little of both. Organisations must weigh their options and place strategic bets across digital technologies. However, what is clear is that success hinges on a bold rethinking of their business and operating models, how they work with the ecosystem and equip their staff.