How to bring digital transformation (DX) to your organization: more answers

When digital transformation is used from design through the product lifecycle for industrial assets, the results can be transformational. But what exactly is digital transformation acceleration, and where should your organization begin? Two experts in the field offered advice during a May 4, 2021, webcast. Additional information follows based on questions from webcast viewers who attended the live broadcast. The speakers are:

• Laurie Cavanaugh, business development manager of E Technologies
• Jim Mansfield, senior manager of Matrix Technologies Inc.

Learning Objectives:

• Examine digital transformation in the context of automation, controls and instrumentation
• Review the diversity of digital transformation initiatives
• Assess your organization’s progress in the digital transformation maturity level
• Discover digital transformation project benefits
• Learn how to begin or accelerate digital transformation efforts

More answers to digital transformation acceleration:

Q: What is the most complex part of digital transformation (DX), and what is the simplest part? Also, what are the bottlenecks?

Mansfield: From what I’ve seen, time and again, the most complex part is planning for change, change adoption and change acceleration. Many companies feel they can manage change on their own, and only one in four are actually successful. The other three lag in change adoption, which extends their planned return on investment (ROI), making future industrial internet of things (IIoT) and DX initiatives less attractive to the “C” suite. The easiest or simplest part of DX initiatives is the implementation of the technology stack. The nice thing is that DX requires the same or extremely similar technologies that have been available for years, but just digging deeper from a data standpoint. Bottlenecks are often created by taking on too much or chasing too many DX initiatives at one time. Remember that DX is a journey, and it’s kind of like eating the proverbial elephant. And how do we eat elephants? One bite at a time. Putting check boxes in the win column will ensure success after success and also enable the deep learning needed to avoid bottlenecks. Think constantly about the agile approach and iterative testing and deployment.

Cavanaugh: I believe the simplest part of digital transformation is finding interest and excitement around this topic within an organization. The most complex part, in my opinion, is gaining consensus on what the DX goals and objectives are across multiple disciplines within an organization. There will be multiple definitions of what DX means, the solutions that should be implemented, the potential benefits, the scope and execution, etc. The bottleneck becomes leadership — who will be the executive sponsor(s) of an overall DX initiative within the organization, and are they willing to designate and dedicate a diverse team to represent the organization’s key disciplines of information technology (IT), operations, engineering, and finance as key stakeholders in their DX pursuits.

Q: What kinds of digital transformation projects might apply to building controls?

Mansfield: DX in building automation and building controls is also advancing at the speed of light. Digital transformation for building controls might include occupancy sensing to drive climate control, energy management that encompasses water, air, gas, electricity and steam (WAGES). Chilled media also are making buildings living, breathing and constantly changing. Understanding these data sets along with metering data at a deep level can really change the efficiency of how energy is being used. Now, combine the additional types of distributed energy resources (DER) and their data sets, and you really begin to impact your energy footprint.

Cavanaugh: We are seeing a move within building controls to programmable logic controller (PLC) platforms rather than proprietary direct digital controls (DDC), making those systems more accessible and adaptable to DX technologies. Because of this, the ability to coordinate building automation, such as door access and proximity sensing, allows for greater control of physical access to key areas in the organization and hands-free identification of individuals by badge or chip reading when an individual may be performing tasks where their hands are gloved or not easily able to enter information. Likewise, building controls monitoring for climate or clean room applications can also be advanced for greater sensing and automated adjustments as required in some industries such as biotech and pharma.

Q: What are some of the biggest IIoT application concerns of clients?

Mansfield: I feel the biggest IIoT application concern is that there are so many technology providers in the DX game today, and it’s becoming more and more difficult to make a decision on which tech stack to choose. The value propositions are becoming more and more clear, and many offer the same value. That’s bringing the discussions back to cost and not value. Don’t get me wrong, DX technology is never going to become commoditized, but it is going to take some time for the top tech stack to rise to the top. Choose a technology stack that has developed a well-defined 10- to 15-year roadmap for technology and innovation advancement. Keep an eye on the “unified name space” and those technology providers that are embracing this type of database architecture.

Q: How can I build up a venture proposal with digital transformation?

Mansfield: If you want to build a venture proposal, find someone who has been successful raising external money and ask for their help. Above all else, keep your focus on the “why” and what you want to achieve. Your business case needs to be crystal clear. Provide deep detail on how the proposed financing will be used, down to the last dime. Financial structuring can take many shapes and forms. Show the prospective investor an exit strategy that makes sense. In other words, if you plan on increasing your company’s production by a certain percentage, what does that equate to in real dollars and what are you willing to give up and for how long to meet your investor’s financial goals? Keep in mind that venture dollars are almost always more expensive than traditional financing. So, consider writing DX transformation plans into your next year’s business plan and look to your current financial partner to assist you for a lot less financial expense. If you feel your ROI is going to be in 18 months, ask the bank for 36-month terms.

Q: Digital transformation is a growing tree. There will always be new technologies and new transformations coming down the line. How do we keep the ROI rolling and also adapt to changing technologies in the coming years?

Mansfield: Return on investment is a must to get your chief financial officer to cut the check. If you are entertaining a DX project journey, dial in on the metrics you want to impact. Those could include energy, efficiency, inventory cost, maintenance cost, etc. From the launch of the initiative, capture those metrics and begin to report out on how you are moving the needle. Get your finance people involved to better understand the long-term financial impact. Use this information to drive the next DX advancement. If you have one or two successful DX initiatives that meet the ROI, the pocket book for future projects will fly open. Remember that success breeds success. Concerning new technologies, the bulk of the advancement will continue to come from edge devices, database structures and moving software from customizable to configurable. Ensure that your database teams have time to continue to sharpen their swords. Achieving 100% utilization of that talent pool and your programmers is simply not attainable or sustainable. Strive for 80% and spend the rest on their work-life balance and training on new technologies.

Cavanaugh: When an organization has an informed DX change management program based on agreed-upon goals and objectives, there will also be an execution methodology and approach that evaluates the use of DX technologies — purpose, intended result — so that it is adaptable enough to consider new technologies and approaches. For instance, the use of automated guided vehicles (AGV) or collaborative robots (cobots) may not have been an option five years ago to replace a forklift function or pick-n-pack station, but with updated capabilities and speeds, these are now at least viable enough to consider as part of the overall DX program. I’ve often told the story of the “Disney drawer” to colleagues and customers: Walt Disney had a lot of innovative ideas and thoughts, many of which were ahead of their time. But he didn’t stop dreaming and thinking. He would just put those ideas in a designated file drawer, and every so often, he would revisit that drawer to see if those ideas were ready to become reality because the constraints were gone and/or the benefits outweighed the costs.

Q: What is the role of enterprise cybersecurity and cyber-resilience within digital transformation in heavy industry?

Cavanaugh: There is currently a critical gap between the enterprise cybersecurity methods and approaches managed and executed by the IT group and what is being executed — or, rather, not executed — by the operational technology (OT) group. The OT assets such as PLCs, human-machine interfaces (HMI), drives and historian servers have limitations and/or greater planning requirements for patch management, upgrades, antivirus scanning and other traditional IT-based approaches to cybersecurity and cyber-resilience. As such, OT has been left on its own to determine effective defenses to protect its systems from external cyberattacks and those executed via social engineering efforts (e.g., spearfishing emails, unchanged passwords, infected jump drives). However, recent high-profile ransomware attacks on manufacturing and successful attempts at hacking control systems to modify the amount of lye in drinking water have lit the fire of many organizations. We now see a concerted effort to bring IT and OT together to understand the current state of network infrastructure and to design and quickly implement a demilitarized zone (DMZ) or air gap to operations, as a more comprehensive and consistent plan for physical and cybersecurity is created in a collaborative approach between IT and OT.

Q: Does Honeywell think the use of artificial intelligence (AI) could have accomplished the emergency landing and survival of the Airbus 330 in the Hudson River in New York?

Cavanaugh: This is an interesting question for Honeywell! In general, though, I believe AI will become an extremely powerful and effective tool in situations and uses where decision making is fairly repetitive and most of the situational disruptions or variances that are likely to occur are already known. The landing on the Hudson was such an unusual situation when looked at holistically. Pilots train for all types of scenarios, including the loss of both engines making the plane a very large, heavy glider, and are given simulator options for how to land. I highly doubt there was a scenario in the simulator where the dual engine loss also included the lower altitude, large city buildings and water as the best of all landing options. I believe AI would certainly assist the human pilots with their decision making, but AI alone may not have been able to quickly consider and adapt to the unpredictable factors in this scenario.

Q: My company has so many things we could do for digital transformation. Management wants us to do more. Where can we get results to help us accelerate into the next three projects?

Cavanaugh: Fail to plan, plan to fail! In my success story snapshot, our customer did the hard thing and actually slowed down first to assess the state of both their IT and OT organizations and determine, collaboratively, what a go-forward strategy looked like in order to meet the corporate DX goals and objectives. In doing this, they were then able to prioritize, define, justify and execute those first few projects and show management that the DX program was in place and ready to scale. All that remained was for management to provide the financial and cultural commitment to the program, and the acceleration and change adoption would take care of themselves

Q: How does digital transformation acceleration influence the future of education?

Cavanaugh: There is definitely a challenge for the industrial sector in attracting and retaining the type of hybrid IT/OT technical talent needed for digital transformation to occur and be “sticky,” as Jim pointed out in his part of the presentation. Software developers may not have as much exposure to the OT domain and assets; likewise, engineering and electrical technicians do not have as much exposure to network infrastructure and cybersecurity tools and technologies used by IT that should also be deployed for operations. However, when there is a change management program in place, it is significantly easier to explain to a prospective or new employee what the plan is and what their role is in executing the plan. Existing employees see opportunities to grow or go based on their interests, so continuing education plans can be more easily formulated and “growing our own” initiatives can prove very effective in retaining key talent.

Q: How dependent are we on the foreign manufacture of micron processors needed for digital transformation, and what bandwidth and speed growth will be necessary?

Cavanaugh: As seen in recent news stories, the global supply chain for semiconductors and processors has impacted all manufacturing sectors. Whether they’re used directly in finished goods such as automobiles or indirectly in OT assets such as PLCs, HMIs and drives, the impact to availability has definitely required agility in the planning and execution of DX solutions. Again, I go back to the benefits of having a fully formed DX change management program. There are many parts of a project within the control of the organization and its partners that can be executed while awaiting the physical hardware and equipment. That may mean you have to juggle some action items and pause and redirect other activities while awaiting those key components, but it certainly shouldn’t mean a full stop to the progress of these projects.

Q: How will COVID-19 affect the speed of digital transformation, and how will different industries react?

Cavanaugh: COVID-19 caused two types of disruption to the speed of DX. First, lower demand for products or services meant the organization had the time and access to move forward more quickly, but the funding was tightened (high availability/low funds). Second, higher demand for products or services meant the organization had the funding to move forward quickly, but not the time and access (high funds/low availability). To address both of these situations, our customers adapted their DX change management programs to execute on the parts of their plans that were both feasible and reasonable. This helped ensure that the transformation didn’t come to a grinding halt because restarting from a dead stop would be significantly harder. Oftentimes, this meant getting creative on which aspects of the DX program could be done in smaller slices to spread the cost or fit into tighter downtime windows for a progressive installation.

– Edited by Gary Cohen, content manager, CFE Media and Technology.

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