Connected digital enterprise is not futuristic. It’s here and now. Today, Internet of Things (IoT), is enabling enterprises adopt a closed loop approach across their entire value chain. With connected devices proliferating and data availability becoming ubiquitous, information flows seamlessly and in a unified manner across the product lifecycle. Right from product design, manufacturing process design, shop floor production systems, to maintenance and services in the field, there is a need for a common thread for communication and information flow. This is called the Digital Thread.
Digital thread along with Digital Twin, form the building blocks of a connected digital enterprise – the way forward for IoT led Business 4.0 transformation. World over, we find, enterprises are investing in digital thread and digital twin with successful outcomes. Gartner predicts that, by 2020, at least 50 percent of manufacturers with annual revenues in excess of $5 billion will have at least one digital twin initiative launched for either products or assets.
Re-imagine business models to realize exponential value
Today IoT is empowering enterprises to innovate with data, bringing context sensitive, real time business capabilities for avant-garde outcomes that can drive both operational and business transformation. For example, predictive monitoring and preventive maintenance can eliminate crippling downtime; worldwide real time asset visibility can improve supply chain operations; enhanced experience can delight customers. Servitization of products or new business models can bring in unconventional revenues. What’s more, enterprises can take advantage of platforms that can easily develop, deploy, administer, and even monetize applications, together with microservices, for new business opportunities.
Here are some specific examples of how a connected digital enterprise delivers exponential value across various industries:
· IoT enabled Industry 4.0 solutions can enable a productivity improvement of ~26% for manufacturers
· Product differentiator model: OEMs sell analytics insights and predictive/performance services derived out of the digital twins of their products as differentiators to their products. This helps them gain more market share and customer delight.
· For commercial airlines, 1% efficiency improvement in fuel management means $2B savings per year overall
· Utility with a 10GW generating capacity has potential for $50M savings
· Improved on-shelf availability can boost sales in retail by 11%
· Connected healthcare reduces a patient’s hospital stay by as much as 50%
Seek foresights to embrace risk
Enterprises are transforming themselves by embracing risk to tackle macro-economic and geo-political uncertainties, and thwart being disrupted. Enterprises across industries are gaining insights into their product performance, reliability, service lifecycle, to factor risks into their business models and provide an enhanced value proposition to their customer. If you are a utility provider, preventive/predictive maintenance can improve response for outages and increase reliability. If your enterprise is in to the insurance business, in tandem with a tracking technology like RFID, predictive monitoring can empower you to identify, monitor, and mitigate risks. You can reduce costs as well as be flexible enough to gain superior customer satisfaction. IoT enabled enterprises can also improve supply chain efficiencies and mitigate risk in manufacturing, and logistics and transportation as well.
Choose a value chain ecosystem play for an efficient enterprise
With IoT enabling a connected digital enterprise, we can get real time product, process, and performance information across the value chain. Enterprises are taking the digital route to break silos and bridge the information gaps across various stake holders, to derive insights based on data across the product lifecycle and make holistic decisions. Connecting the products and systems, provides a complete value chain view. Such a cohesive view for each persona in an enterprise’s design, quality, and commissioning team can avoid delays and rework, thereby driving large scale enterprise efficiency and cost savings.
For example, an automotive OEM provides diagnostic devices to its service dealers across the world. These diagnostic trouble codes from disparate devices across the OEM’s gamut of automobile platforms, are stored in a cloud repository. Persona based insights are derived and send to various OEM teams. They then leverage these insights to eliminate the trouble triggers in subsequent product launches.
Achieve customer gratification through mass personalization
With the increasingly ubiquitous presence of connected devices, in this Business 4.0 era, enterprises should gather data-driven insights about changing customer behavior as they look to harness the abundance of information. With IoT, mass personalization becomes practical and cost efficient for enterprises to improve customer satisfaction and internal efficiencies.
For example, when a manufacturer is running multiple facilities such as press or machining shops simultaneously, it is possible to proactively manage the energy consumption. By having real time insights to the peak load energy consumption, manufacturers can sequence these machines and schedule their operations so that such high energy equipment are not run simultaneously. Such unique and highly customized insights can achieve significant energy consumption savings. Another instance is where IoT can help in real time supply chain and logistics of perishable goods. Availability, temperature, humidity, moisture level of these goods can be measured in real time and this data can be used to alert the customer. Real-time insights into changing customer expectations and enhanced visibility across value chain, enabled by IoT, open up many other opportunities for up-selling and enjoy ongoing business with every individual customer of your enterprise.
With IoT powering opportunities for exponential value creation through reimagining business models, and countering disruption by embracing risk, enterprises stand to make substantial business gains by transforming themselves in the Business 4.0 era.
About the author(s)
Rajaravisankar Shanmugam (Raja Shan), is the Global Head - Business Development for the Internet of Things (IoT) Business at TCS. He is responsible for developing the IoT Business, thus leading the global IoT Sales, Marketing & Analyst Relations, and developing strategic Alliances & partnerships. He is a leading voice in Internet of things space, delivering the keynote address at prominent industry events and has published various works of thought leadership including an article on realizing business value from Internet of things.