IIoT ecosystems – A matter of mindset?

We know that industry 4.0 is the future and our best shot for achieving continuous improvements across shop floors. So, changing how we, as the manufacturing industry operate will have a global impact and bring positive change to the world. 

Due to several technological advancements, the whole world is coming closer together. We have intense globalization pressures going on: generational shifts, global connectivity, new economies, new markets, among many other trends – The world is undergoing a massive transformation. In this brave new world, traditional business models are no longer "cutting it" and are no match for the continually evolving marketplace. 

Fortune 500 - Powershift

This powershift is easy to see if we look at the Fortune 500 list from the last eight decades. That list pretty much remained static, unchanged until a couple of years ago.

In the last 15 years, almost 50% of the companies listed on the Fortune 500 list plunged off, involuntarily freeing up space for newcomers to find their spot on this prestigious list. Most of those companies, now gone from the list, were manufacturing companies. The pressure is on – and a decisive powershift kicked into action without a pre-occupied positive sentiment towards the long-established players. As just demonstrated, the manufacturing industry is facing enormous pressures from many directions. But suppose we observe the way manufacturers deal with this increasing pressure. In that case, we can discover how and if those companies survive in this new, constantly changing economy – we can detect success patterns and analyze what is happening – in real-time. 

“Digital” the differentiator

Recently, Gartner surveyed over 1500 executives by asking two simple questions.  

1. Who thinks digital will be a crucial competitive edge for your companies?  
2. How many of you see the results from digital initiatives?  

81% believe “digital” is a critical piece of the plan and would be a differentiator. But, only 24% said they saw the results of their digital initiatives. Almost everyone thinks it's a priority and a competitive edge... but only a few are seeing results;

Why is that? And will investing more budget close the gap? 

Let's look at the contrast between the top 25% of digital leaders and the bottom 25% of the pack. Each side of the spectrum is investing almost the same they are spending somewhat between 3.2% and 3.5% on it (% of revenue). This tiny gap of only 0.3% is practically negligible. But the return on investment of the top 25% is impressive, to say the least:80% improvement on operating income and about 57% increase in profits.   

Now, this outcome leads to more questions: How is this even a thing? How are both spending roughly the same amount, but the results are significantly different? What are the top 25% doing differently? What is their secret sauce?  

Mindset matter – Perspectives are crucial

Digital innovation is becoming less and less about new technologies. It's about finding new ways of thinking about challenges, testing hypotheses, looking at problems from a different angle, walking in the customer's shoes, and unlocking new business models' value.   

So, hitting a 'problem' is good – it gifts you the opportunity to find new ways to make things happen, to innovate. So, what are the main things we need to consider for this to happen?

Here are my top four areas to consider if you want to join the top of the 'Digital Pack': 

1 | Imagine a real business change 

Despite sounding foolproof and straightforward, this is probably the most challenging part. Digital businesses require shifting the way we think and work – unlock a mindset of change. 

• Who do you want to be as a company or organization? 
• How are you going to change your industry?
• What can you do? 

 Think big; anything from pivoting from a product company to a service-oriented company can be your next business breakthrough. Perhaps it's about innovation and how you can build fruitful innovation programs inside your company and enable intrapreneurs to thrive.  

Think about the way you want to conduct your business. This will facilitate designing technology to help your customers and partners achieve their ambitious goals and transformations. Furthermore, on the way, you will reach your own goals by making it about your partners and improving their lives.

2 | Adopt an integrated innovation approach 

As IT leaders, we have a crucial role in modernizing IT-infrastructure and architecture. We need to challenge the status quo, get a feeling for legacy technology, artifacts and technical debt. Agile methodologies and coaches can significantly facilitate this process.  

We, the leaders, must learn ...how to open the aperture and let more and more ideas through processes, connecting more projects and programs while fostering transparent exchange. Get everyone involved: your manufacturers, suppliers, customers, people working on the shop floor! Everybody.  

New viewpoints carry new business models. Each perspective brings opportunities – which you might never discover if you don't start having conversations around problems. Embrace co-creation! 

Move your focus from PoC to proof-of-value in a production piloted environment. Do it quickly, fail fast, learn faster, integrate learnings, and see if it solves the problem. You can't find that type of information in a lab or with a data model – fail, iterate, test, repeat. 

3 | Value should be your northern star  

How you prioritize and sequence your initiatives probably impacts success more than other factors. You would want to manage your projects like a stock portfolio. It's the total return that matters, not single positions.  

You might have great individual use cases within your shop floors (or honestly everywhere else), but your northern star should be creating value. And you can generate more overall added value when you not only focus on one thing but have a more holistic view. Take the opportunity to learn from every step in every area so you can elevate even further than expected. How you sequence your steps is critical.

Remember, the goal here is not to get projects done but to realize the value and point of achieving top line growth. While at the bottom line, you notice results that can vary between increased operational effectiveness, reduced costs, etc.   

4 | Build a powerful ecosystem   

This is not a new concept at all, but we can no longer believe that our organization and we are the centers of the universe – and nobody shines as bright as us.   

Partners, clients and suppliers are not merely orbiting around us. Everything is interconnected – and we are more successful and add a lot more value when we lock arms and tackle challenges together. 

Customer-centric ecosystems are the way to move forward in the sphere of IIoT. 

Customer centricity is absolutely core to digital success – so adding value for our customers is our northern star.    

The "lonely hero story" is over – we can be sad for two seconds – but we have to move on.  

We have the opportunities to now interact with multiple stakeholders, communities, research institutions and tech-heavy start-ups, with digital minds thinking things a lot of us can't even imagine. We are all connected, and our machines should be as well – to add measurable value for all stakeholders, entire verticals, and communities.   

Connections mean success in "Digital" - for humans and machines. 

Curious about Digital Manufacturing ecosystems?   

Reach out to us at K?rber Digital -> https://www.koerber-digital.com/company/digital-ecosystem-for-manufacturing