Digitization: a Few Small Steps in Your Enterprise, One Giant Leap for Industry
In a couple of days I’ll be in Hannover. If you’re even vaguely involved in industry’s digital transformation, you'll have guessed why: to visit the world’s biggest industrial fair, the Hannover Messe.
This year, the Messe’s message, so to speak, is very much that small digital steps taken immediately provide the most effective way into the fourth industrial revolution. It’s not about completely overhauling or replacing manufacturing plants, as the fair’s website explains: “It is a gradual process”, it says there, continuing that “companies can begin by fitting sophisticated sensors to existing plants to capture and evaluate data that will help them make improvements to their production processes or develop new business models."
This is precisely in line with my new book, “Industry X.0 – Realizing Digital Value in Industrial Sectors,” which should be out in a few weeks (published both in English and German). It’s central message, to paraphrase Neil Armstrong, is that small digital steps are the route to the big leap forward. Start digitizing at limited levels now, while keeping your core legacy business running, but scale quickly once you hit solid ground in the digital “new”.
Of course it’s also a good idea to know where you’re going. No doubt, Hannover will again show how waves of digital technology are going to transform industrial businesses, disrupting entire value chains, from ideation to end of life.
Today’s existing breakthroughs point the way. Most business functions are starting to achieve new operational efficiencies through measures such as sensors, connectivity, APIs, robotics, virtual reality, data analytics and artificial intelligence. Crucially, more and more smart products are connected to platforms, augmented by data-driven services.
These smart, “living” products – containers for continuously reconfigured software – and the smart, connected services they give rise to, are key to the transformation. It is this highly adaptable new world of as-a-service that will disrupt existing business models, whether for cars, industrial equipment or any other traditional hardware.
My book delves deep into these coming business models, looking at how innovation will be defined by customer and partner experience – of the services offered – rather than new product features. Demand sensing by products will deliver hyper-tailored offerings and open innovation and multi-dimensional partner ecosystems will support continuous renewal and reinvention. In a new form of consumerism, industrial clients, many of them B2B customers, will soon expect real-time communication and support from vendors via digital services such as remote maintenance.
Despite my borrowing from Armstrong’s famous quote, there is no moon landing moment here. Digitization does not need years of preparation, thousands of brains and enormous budgets to yield positive financial results. Instead, as I say, it should start small and advance incrementally.
To guide you in this, “Industry X.0” provides six simple capabilities for every stage of an enterprise’s digitization. I see them as “no-regret” capabilities into which funds and efforts will always be well invested.
But don’t just take my word for it. Come to Hannover! Amid all this futurology, one prediction seems especially clear: the Messe will provide abundant evidence that this is the right roadmap.