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Digital Transformation Requires Organizational Transformation

Digital transformation is a popular phrase that everyone is using, but that no one is implementing in quite the same way. Executives across many industries are hearing plenty about the promise of internet of things technologies to power automated workflows, and about data analytics services that deliver valuable information. This leads to increased reliability, less downtime and smarter, faster business decisions. It seems great, but it’s not always easy to achieve. Organizational change is often required for companies to fully realize the benefits of digital transformation.

The challenges presented by technology advancements, though more relevant than ever, are not new. I have worked with manufacturing customers across many industries for over 30 years — ever since the development of microprocessors and network-based instruments. Together we explore how to use automation technologies, wireless communications and high-tech sensors, with the goal of improving efficiency, safety and reliability.

For industrial plants like oil refineries and chemical plants, digital transformation creates perhaps one of the most challenging disruptions of all: the convergence of information technology (IT) and operations technology (OT). A company’s ability to combine the two is proving to be one of the clearest indicators of success.

Historically, the functions of OT and IT have existed independently in these industrial settings that serve society’s most critical needs, such as power plants or offshore oil platforms. OT — the domain of engineering and operations staff, typically at the facility level — controls its own sensors, software and systems that run critical production and safety processes, as well as ensuring the reliability of production equipment. IT has a crucial responsibility as well, integrating plant-level systems with enterprise business-level applications, and maintaining overall corporate computing environments.

In my line of work, I help manufacturers implement digital automation solutions to improve reliability and safety in their facilities. Nearly all of my customers plan to expand digitization into other areas, such as equipment reliability and energy optimization. I have found that manufacturers are attracted to the promise of digital transformation. That includes a mobile, digitally transformed OT production environment that is powered by cloud analytics, data sharing with suppliers and customers, and industrial internet of things applications. Though appealing, digital transformation brings new security concerns and the need for data integration throughout the enterprise, and some find that exporting data outside their own computing environment is a scary prospect. Regardless, many companies are installing infrastructure technology and application software and forging ahead. These new capabilities provide a more holistic picture of what’s going on throughout their plants and are allowing customers to foresee potential equipment failures and reduce unplanned downtime.

But installing the best digital technology is just the beginning. The companies that are finding the most success in achieving and maintaining results are the ones that bring IT and OT together early, with a clearly defined mission. This is a key organizational change required for digital transformation. Establishing a digital transformation office with cross-functional teams, including experts from IT working hand-in-hand with OT and sometimes central engineering, can help companies prioritize critical business problems. Digital transformation office members don’t have to work from the same hub; however, it helps to have representation from both corporate offices and plant facilities to ensure pilot projects and new programs address real-world criteria.

Fundamentally, these two functions need one another to achieve the promise of digital transformation. It’s like designing a building. Architects can design the right building with the right infrastructure, but they need to know what the purpose of the building is going to be. Offices? Family residence? Clubhouse? The customer with the use case vision needs to work closely with the infrastructure expert — and they need to combine their areas of expertise — to realize the best result.

In the same way, IT must understand the business and operational goals of OT to put the best technology infrastructure in place that will deliver those results. To reach this level of understanding, IT professionals need to immerse themselves more in the world of OT to learn about the goals, practices and potential constraints. And OT needs to take the time to work with IT — to tell them the problems they are trying to solve, the business results they’re trying to achieve, what data and software are required, and who needs access to the technology when, where and why.

It takes collaboration between these two disparate business functions — and it’s rarely easy. Digital transformation offices with cross-functional teams work together to achieve a shared mission. This is a key enabler of a successful digital transformation, and can help push your company into the next era of business success.

Source: Forbes

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