Trendspotting: Industrial Digital Transformation Matures

By Keith Higgins

In 2021, IT and OT integration, edge-to-cloud analytics, and digital thread will drive smart factory performance, agility and efficiency.


To fend off disruption, world-class manufacturers continue to invest heavily in digital transformation initiatives. A holistic digital strategy helps manufacturers move faster by removing friction between disparate teams and systems. Pre-COVID, most IoT-powered digital transformations initiatives were driven by growth opportunities, increased competitive pressure and new regulatory standards. However, today’s world looks much different compared to the world this time last year.

In addition, the pandemic has accelerated digital transformation for a lot of companies to support supply chain resiliency and better visibility of production across multiple plants. A forecast from IDC estimates that there will be 41.6 billion connected IoT devices generating 79.4 zettabytes of data in 2025. Below are a few trends we can expect to see in 2021 as manufacturers leverage IoT data to provide high-level insights, use edge computing to enable real-time data processing, adopt digital twins to predict challenges, and evolve jobs with human-machine collaboration.

IT and OT Integration Is Critical for Answering the $77 Billion Need for the IIoT
With the IIoT market expected to grow from $77.3 billion in 2020 to $110.6 billion by 2025, 73 percent of manufacturers plan to increase their investment in smart factory technology during the next year. As IIoT sensors produce 1.44 billion data points per plant per day, IT and OT integration is critical to improving operational efficiency while accelerating success through digital transformation initiatives. However, enterprises have traditionally been challenged with converting real-time, historic OT data from legacy systems into higher-level IT insights.

Data produced on the factory floor needs to maintain its rich context (such as process conditions, time stamps, machine states and other production states) to provide maximum insights to factory personnel. Previously, aggregating the data generated by machines in processes required significant manual effort and pulling information from many disparate sources. Instead, by automatically capturing high-speed, contextualized OT data from industrial controllers in real time, organizations can generate predictive insights and operational excellence across the enterprise.

By applying context to data pulled from the factory floor, OT teams will create more powerful analytics to better understand the data and how it impacts the machines, lines, plants and processes for which they are responsible. In 2021, IT and OT integration will directly impact whether enterprises remain or become more competitive in the global manufacturing landscape.

The Edge Is the New Cloud
For companies scaling smart factory initiatives in 2021, real-time availability of mission-critical workloads will be necessary to ensure business outcomes. Edge computing will complement existing cloud infrastructure by enabling real-time data processing where the work takes place (e.g., motors, pumps, generator or other sensors). Implementing integrated analytics from the edge to the cloud will help these enterprises maximize the value of investments in digital systems.

The industry will continue to move toward more decentralized compute environments, and the edge will add significant value to digital transformation initiatives. By integrating edge functionalities with existing cloud infrastructure, organizations will worry less about logistical IT considerations and, instead, focus on rethinking what’s possible in a smart machine: What questions can it answer faster? What new problems can it solve? How can it protect operations better? Analysts note that by 2022, 99 percent of industrial enterprises will utilize edge computing for this reason.

Digital Twins Save $1 Trillion in Manufacturing Costs
During the next 12 months, by interconnecting business systems via digital thread, organizations will virtually commission new production lines. Using digital twins, manufacturers will run machines virtually before parts are ordered, discover control issues before support staff goes on-site, predict future performance challenges and opportunities, simulate line changes to keep up with ever-changing customer demands and train new employees on systems without consequence.

Gartner estimates that businesses will save US$1 trillion each year in asset maintenance by using the IoT via digital twins. IDC suggests that 30 percent of Global 2000 companies will be using data from digital twins of IoT-connected products and assets to improve product innovation success rates and organizational productivity, achieving gains of up to 25 percent. In 2021, organizations will use digital twins, enabled by digital thread, to solve lifecycle challenges in the digital world before they turn into “if only” moments in the real world, lowering overall manufacturing costs and increasing factory productivity.

Automation Accelerates Employee Advancement Through Human-Machine Interface
With COVID-19’s impact on factory capacity and new social-distancing regulations, technology is vital for success, but people are still the heart of the operation. With Industry 4.0 comes the opportunity to evolve jobs. Automation will prevent a crowded factory floor while replacing tedious, repetitive tasks. This frees up workers to leverage their creativity and expertise to find unique ways to use technology to improve operations or solve critical issues.

For example, a worker may oversee analyzing IoT data from connected machines to forecast downtime or find ways to consolidate processes to reduce the number of steps needed to create a product. By upskilling workers with human-machine collaboration, manufacturers will safely comply with new health regulations and accelerate production amid the pandemic and beyond. Since people are critical for machines to reach their full potential, manufacturers must enter projects with a human-first mindset focusing on employee needs and adapting processes accordingly to remain competitive.

As the COVID-19 pandemic continues to accelerate digital transformation into 2021, 73% of manufacturers plan to increase their investment in smart factory technology over the next year. We will see manufacturers increasingly leverage data more effectively to make real-time, informed decisions and improve overall business comes. I look forward to the opportunities the new year will bring.

Keith Higgins is Rockwell Automation‘s VP of digital transformation at. He previously served as the VP at FogHorn and CMO at RiskVision until its acquisition in 2017. Higgins was also an executive at Symphony Teleca Corp., an IoT and connected services company, where he played an integral role in the doubling the company’s revenue, leading to a nearly $1 billion acquisition by Harman.