The ROI of Digitalization

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For much of the industrial world, the old way of working isn’t working so
well anymore. The traditional productivity and profitability levers that companies can pull have been
pulled plenty. It’s time to find new sources of value and become more nimble. But what does that mean and
what is the solution?

Improving automation with collaboration
When industry automated plants in the 1980s and 1990s, output was raised to new levels. After that,
companies invested in enterprise resource planning (ERP) systems, outsourcing non-core tasks and
centralized information technology (IT). This allowed them to manage large organizations more efficiently
at lower cost. These were capital investments and, when these projects were complete, owners profited
from the efficiencies they brought.

It is widely agreed that to raise productivity and profitability again, data utilization will play a key role.
But there is a catch: most companies are applying the same decades-old, capital-intensive logic to data
utilization by building centralized data lakes, including the infrastructure to keep them stocked. This approach will yield more data. But the return on
investment (ROI) will not be what the owners expect.

The reason is that many companies believe the improvements they seek can be found in more and
“bigger” data. This is an over-hyped perspective because more data only provides one part of the
solution. To drive business improvements or introduce new business models (which is often the
goal of these investment initiatives), a combination of the online and offline worlds is still necessary.
Modern, remote technologies are needed, but so are traditional manual inspections and measurements.
This new way of working requires the close collaboration of experts from across the


Posted on

May 14, 2020

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