Feb 10, 2019According to an Industry 4.0 global survey conducted by Price Waterhouse Coopers (PwC), one of the world's largest consulting firms, global industry leaders plan to invest 5 percent of their annual revenue in digitizing key vertical chain functions and horizontal levels of their companies, which corresponds to a total of $907 billion by 2020. The survey revealed that 72 percent of organizations expect to have advanced their level of digitization within five years. This is because it brings several benefits to the institutions and their clients. But first, it is important to understand what digitization is and how it should change the processes within a company.
Many people confuse digitization with digital transformation, but while the latter functions as a dematerialization of a company, digitization transforms the organization's processes into the most digital and automated possible. For instance, take the entire sales process—from ordering and discussions with a customer to delivery—and then move on to the digital environment. Within the context of Industry 4.0, it is the next stage with respect to the transformation that the digital resources will provoke in the organizations. The goal is to turn all of this data into intelligently available information, and thereby make the best decisions for the business.
Taking into account this reality in the industrial scenario, it is no wonder that 69 percent of the companies that participated in PwC's research intend to develop new digital products or services. From digitization, it is possible to make processes faster, with fewer errors, and deliver better service to customers, who gain access to information that was once owned by the organization. What happens is that the volume of data and information is so high that it becomes humanly impossible to absorb everything and make intelligent business decisions, requiring algorithms that help generate insights for managers. That's where business analytics tools come in, which are perfectly embedded within this analytics context.
Another important point is that in order to prepare for all of this, to become more flexible and better absorb what is going on with regard to new technologies, including digitization, an adequate infrastructure is more than necessary. In thinking about this, we at Termomecanica recently migrated 70 percent of our systems to the cloud.
We have already begun to experience the positive results, since this model, while paving the way to the conception of an almost unlimited structure, allows the environment to grow according to demand. We also have exclusive redundancy capabilities, which allows users to not only access them, but also share them in the management system (SAP) for a longer period of time. Besides that, another very important advantage is the fact that the greater the supply of computing and storage in the cloud, the more migration is taken into account. In our case, to illustrate, we had a savings of 35 percent with the infrastructure to support the systems.
It is a natural tendency of which organizations need to be aware. While global companies plan to invest $907 billion—about 5 percent of revenue per year in Industry 4.0—only one in ten national firms invest more than 8 percent of their revenue. The focus is on digital technologies such as sensors or connectivity devices, software and applications, employee training, and organizational change management.
In order to have an effective transformation within a company, it is first necessary to change the corporate culture, starting with thinking only of physical assets, especially with respect to industry. Investing in things that are not physical assets is necessary to enter this scenario more appropriately. Training employees, reviewing processes to make them leaner and automating systems are necessary for a company to take the maiden step with regard to digitization. Following this same thinking, it is essential that all areas of an organization be part of the process to understand the scenario and the new changes.
One concern that arises with digitization is with regard to information security. With all the important information from the digital medium, care must be doubled, so engaging everyone in the process and training staff members is essential in order to avoid data leakage. The next step is to think about the customer's needs, what you can offer that it does not yet offer, or what the competitor provides. It is from this thought that you can use your database and information to know how to satisfy customers more automatically. The movement must happen backwards—that is, first listen to what a client needs and wants to be able to solve through internal processes, in addition to identifying any errors and failures.
Previously, the industry focused on the individual automation of machines and processes; with Industry 4.0, the focus has been on the end-to-end digitization of all physical assets and the integration of digital ecosystems with value-chain partners. It has come to sustain the gains promised through the generation, analysis and communication of data that encompasses several new technologies to create value.
Ninety-three percent of businesses around the world believe that within five years, data will be essential for decision making, and digitization is one way to make better use of this data. When a company starts to take advantage of new processes, systems, tools and means of collaboration, that changes the way it operates and makes processes more intelligent.
Walter Sanches is the IT superintendent at Termomecanica.