Companies and industries have been investing in digitization and digital transformation for years. Initiatives for IT-optimized sales and production in particular have been high on the agenda. If you look at some figures and studies, it is no wonder. In the USA alone, Internet-enabled devices will increase from 50 million to over 180 million by 2020, and China will be twice as big as the USA when it comes to intelligent machines.
With such rapid growth rates it is of course important to develop Industrial Internet of Things (IIoT) strategies and prepare organizations for the next industrial revolution. Topics such as Smart Manufacturing and Industry 4.0 are therefore often on the meeting agenda.
But one should also not forget that the next industrial revolution will not only be brought about by Internet-enabled devices. Data, and Big Data in particular, is a central issue. Little by little, data is becoming the most valuable resource that industries and companies can have. As a result, many companies are also under great pressure to make their production more efficient, determine demand forecasts or evaluate customer data for product development.
If you take these trends and compare them with what companies are currently working with, it is easy to see where the problems lie. 20 years old systems with 20 years old software are no longer up to these demands and the workarounds usually lead to more problems than they can solve.
We will show you which major trends are causing the biggest changes in the industry and why they are so important as drivers for the digital transformation.
5 Trends drive the digital transformation in the industry
Even though the industry usually does not feel affected in many areas, it is becoming increasingly obvious that even supplier companies are affected by these trends.
1. Mobile technologies and social media
Mobile technologies such as smartphones, tablets and much more are changing our society just as much as social media. More and more often, manufacturers have to face challenges such as “New Work” or “Connected Work”. The digital transformation of the workplace is just one example of how companies need to change. The technically skilled employees of today and tomorrow can no longer be squeezed into traditional work models. So all industries must also adapt to the changing needs of workers and offer new opportunities with the help of digital tools.
Employees increasingly expect to find information about the company, products and more as quickly as they are used to when they order a book online. These expectations mean that new systems must be introduced to meet these demands. Collaborative work models and mobile working are just some of the examples that the Millenials expect from their employers. IT systems, ECM strategies, networks and also offices should be prepared for this.
2. Growing customer expectations
24/7 – For many customers this has become standard. Companies need to be reachable anytime, anywhere, and service is expected to be delivered consistently across all channels. These growing customer needs are changing loyalty to traditional products and brands. This leads to the emergence of new threats and the loss of the existing customer base.
In addition to declining loyalty, there is also a high expectation that companies will always have to come up with something new. As a result, many industries have to develop much faster and also get to market faster. This inevitably leads to shorter product lifecycles which at the same time also become much more complicated and also require a digital transformation of the organization.
Design Thinking, Agile, Scrum and other working methods are moving to the center of the digital transformation. This leads to new products and services that are also “digitally enabled”. Cars are digitally controlled and even tractors are equipped with hundreds of digital systems.
When it comes to the development of such products, a completely different kind of cooperation is naturally required among engineers. For example, teams that are initially alienated have to work together on solutions. Close development, together with customers and partners, naturally requires a better exchange of information between the individual parties and also active management of the team members.
3) “Extended Enterprise” as a keyword of digitization
There are very few companies left that still produce completely on their own in their own halls. Most companies are especially looking forward to a large exchange of information with suppliers, partners, subsidiaries, company groups and many other parties. The ability to exchange content as well as processes with all these partners makes it difficult even for manufacturers.
Digitalization is opening up many new ways of creating value. For example, a product may be designed in San Francisco, engineers in Germany develop the product and production then takes place in China. These interrelated constructs can also be described with the term “extended enterprise”. Manufacturers in particular must pursue new approaches here and adapt their processes, their transparency, the necessary tools, but also the employee mindset to this digital transformation.
4. Big data, Analytics, IoT and the era of contexts
“Data is the new Oil” – a mathematician once described it aptly. For companies, too, new possibilities have made data a central point of their efforts. It is estimated that services and technologies around Big Data will increase by at least 23% by 2019. Especially for unstructured information like videos, e-mails or even photos, many technologies are in demand. Especially here you can also search and make documents available. There are reports where it is shown that employees spend up to 30% of their time just searching for information, this would be a huge market for change.
The analysis of this amount of data can also mean completely new insights for companies. Through IoT technologies, machines can be made intelligent but also monitored. This leads to data about usage, durability, customer behavior, etc. provide information. Together with other data sources, processes can be optimized, new products can be developed, managed or monitored.
Information at the right time at the right place – that is the motto!
5. Hybrid cloud IT solutions and infrastructure
When it comes to IT and IT infrastructure, it is no longer the case that companies only stock up on their own servers. With the new cloud services, many IT systems can be used out of the cloud and thus costs for the IT infrastructure can be greatly reduced. Hybrid systems or even multi-cloud solutions are potential approaches here to specifically use the advantages and disadvantages of the individual solutions.
Especially the high degree of mobile users, many web-based solutions and new technologies like IoT lead to the fact that companies automatically depend on cloud solutions and have to implement them. But here too, if possible, a proliferation should be avoided and a targeted IT and cloud strategy pursued, because there may also be regulatory barriers that need to be considered.