The ROI of Digitalization

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 organization and its service providers.


Posted on

September 10, 2019

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