When digital transformation is discussed, technology is usually not far behind. Whether it’s Internet of Things (IoT), cloud, or artificial intelligence (just to name a few), tech is changing how organizations around the world are doing business.
While there’s no question that technology goes hand-in-hand with digital transformation, there are other essential considerations that must come first in a digital transformation strategy. These include identifying value-driven business outcomes and developing a culture of change and collaboration.
In our State of Industrial Digital Transformation report, our research analysts describe DX technologies as “levers or tools to support business value-oriented initiatives.” The technology is the means to an end and should be implemented within a strategic roadmap for digital transformation.
Our analysts’ research consistently found eight technologies central to achieving the transformation efforts most commonly pursued by industrial enterprises. In this blog, we’ll discuss each of those technologies and how they play a role in digital transformation.
Note:The percentages associated with each technology above are the average current adoption rates for industrial companies, analyzed by PTC based on research from World Economic Forum, Accenture, International Data Corporation, Harvard Business Group, International Data Group, Cognizant, 451 Research, McKinsey, ResearchandMarkets, Forrester, and Gartner.
Over the past two decades, mobile has irreversibly changed the world we live in. From increased connectivity to powerful technology at-hand, mobile’s influence permeates our daily lives.
In manufacturing and industrial companies, there are myriad opportunities presented by mobile technologies – especially with the coming capabilities of 5G. It’s no surprise that 81 percent of manufacturing CEOs see mobile as strategically important.
Mobile, in many ways, is a foundational tool that enables other game-changing technologies. For example, shop floor workers are using smartphones to view machine data points in augmented reality (AR), field service technicians can get interactive, real-time guidance from experts at headquarters through AR to repair an industrial asset, engineers are using their phones to review CAD designs on-the-fly, and global sales teams are creating quotes for custom products leveraging up-to-date pricing and delivery dates.
As mobile becomes even more powerful with 5G, there will be ripple effects throughout the manufacturing industry. There will be improved connectivity for robotics and automation in the factory and faster real-time analytics from field operations.
The manufacturing industry, especially discrete and process-oriented companies, have been hesitant to adopt the cloud. There are diverse reasons for this hesitation from integration challenges with legacy systems to security concerns to ensuring business continuity.
However, those concerns are fading with new advancements in the cloud technology and implementation. A study earlier this year found that the manufacturing industry was on track to outpace the average adoption of hybrid cloud by 2020. Another report from The Economist found that 78 percent agreed the cloud’s penetration of the manufacturing industry will be a major factor in five years. While there is still a healthy mix of public/hybrid/on-premise cloud, a LogicMonitor survey predicts that 41 percent of enterprise workloads will run on public cloud platforms in 2020.
Leveraging the cloud is key component to most digital transformation initiatives as it enables greater flexibility and agility across an organization, as well as faster scalability in many instances.
For manufacturers, Internet of Things technology is bringing unprecedented visibility into both products and operations. By the end of this year (2019), 75 percent of large manufacturers will update their operations with IoT and analytics-based situational awareness. These enterprise businesses are using industrial IoT technology to gain a better understanding of their operations, from both a global and factory perspective.
With greater insights and analytics from IoT, manufacturers are achieving key digital transformation objectives, such as increased efficiency, flexibility to respond more quickly to market and customer demands, and innovation across their products and services.
As one of Gartner’s Top 10 Strategic Technologies for 2019, digital twins have a key role to play in digital transformation. Digital twins are digital models that virtually represent their physical counterparts. They can represent products, processes, or tasks and can be leveraged to understand – and even predict – the physical counterpart.
With digital twins, organizations have a clear visualization of their products or operations. (For a primer on digital twins in the industrial enterprise, read our whitepaper.) As digital twins increase in fidelity, they can be tailored to different roles and applications within an organization. Digital twins are made more powerful (and impactful) with the increasing adoption of IoT, augmented reality, and digital thread through integration of product lifecycle and design/engineering CAD data.
There are increasing digital twin use cases across the value chain: engineering, operations, and maintenance and service.
According to 451 Research, one in four manufacturers are implementing smart robotics today, and that will increase to one in three over the next two years. The use of robotics is expanding beyond repetitive tasks to more analytics-based activities powered by complementary technologies like IoT, sensors, and artificial intelligence. In terms of digital transformation, robotics has a key role to play in driving operational efficiency and freeing up humans for higher-level tasks.
Artificial intelligence (AI) is a burgeoning market: Within manufacturing alone it’s expected to grow 17-fold over the next five years to roughly $17 billion in annual global investment, according to Research and Markets.
Spurred on the exponential increase in data and access to data, as well as compute power and connectivity, artificial intelligence is unlocking previously unavailable analytics and insights. As a result, new ways to approach and solve problems are emerging. For example, generative design uses AI to optimize designs quickly from a set of system design requirements. It comes up with solutions that would take hours (upon hours) of engineering work.
AR enables more seamless connections between the physical, digital, and human worlds.
Jim Heppelmann, President and CEO of PTC, described augmented reality in this way: “AR is IoT for people.” When frontline workers wear Microsoft HoloLens, they’re able to connect to their physical surroundings and leverage all the power of data and analytics in the cloud. This enables them to have real-time information in a highly visual format to complete a task.
This is just one example of an emerging augmented reality use case among many in the industrial marketplace. The advantages of enterprise AR include improved worker productivity and quality, differentiated products and next-gen human machine interfaces, knowledge transfer and training, and new customer support and services.
Additive manufacturing (sometimes called 3D printing) is the process of building an object one thin layer at a time. According to McKinsey, the additive manufacturing market will grow to $20 billion by next year, and skyrocket to $250 billion by 2025.
As industrial enterprises look for efficiencies, additive manufacturing has impacts across the value chain, not just manufacturing. For example, if customers – or field operations – have the ability to “print” replacement parts for a machine, this provides more efficient, seamless customer service, decreases downtime, and lowers service costs. Creating the digital thread as a single source of truth enables this additive manufacturing use case and unifies value chain functions.
These eight technologies may be the most common in digital transformation efforts but they are far from the only technologies. And that’s one thing to keep in mind -- to achieve digital transformation success, it’s not about implementing a single technology. In fact, that’s the surefire way to stifle true change within an organization. The power in each of these technologies is how they fit into your own company’s DX strategy and how they can work in combination to make significant business impact.
Nancy White is the content marketing manager for the Corporate Brand team at PTC. A journalist turned content marketer, she has a diverse writing background—from Fortune 500 companies to community newspapers—that spans more than a decade.