Mapping a path to industry success through the ecosystem of systems
- Every organization has a complex mix of traditional applications, functional components, and external partnerships. Christian Pedersen of IFS argues for a better approach to human-machine co-ordination to achieve the Moment of Service.
We are living in a world where digitalization is reshaping industry. According to a new report from Transparency Market Research, the global Industry 4.0 market is expected to reach US$ 1 trillion by 2031, expanding at a compound annual growth rate (CAGR) of 26.7% during the forecast period. Many believe we have now entered the world of Industry 5.0, which is about people and machines working together to drive enhanced efficiencies.
That symbiotic relationship between human and automated systems is already key to the success of many forward-thinking businesses. In today’s fast-paced, highly-competitive operational environment, you’re not in the race if you don’t ensure that employees are fully connected, supplied with the tools they need, and working at optimum productivity levels. Technology needs to be an enabler but for many organizations it’s an inhibitor of growth and efficiency. Rather than spending time concentrating on the nuts and bolts of technology and battling to make systems and solutions work more effectively, organizations need to stay focused on their business, on digital transformation, and on their customers, assets, and people.
That’s challenging because every enterprise today is complex. It is effectively an ecosystem of many different systems. This is not only internally, where data and processes need to be better connected across the organization. A large number of companies are themselves becoming software companies; writing software and developing new digital offerings to their customers. To get value from these offerings, they need access to data and processes to drive this both from within their own firewall and from third parties. That in itself means they are effectively participating in that ecosystem of systems, where they are exposing their own data through APIs but also consuming data and APIs from others.
In addition to all this data and the software to manage it, there are many other systems to take into account. A single sales department alone will use a range of different processes and IT tools. They will even use separate systems for presentations and demos, for example. Meanwhile, the procurement department will most likely have their own separate systems and processes. They will have connections with warehouse technologies and supplier systems. They may even have some responsibility for procuring utilities and energy optimisation, such as minimising CO2.
These are just a few examples but highlight that every organization today consists of a complex mix of different systems, some internal to the company and some external, that work together as part of an overall ‘ecosystem of systems’.
Finding a better way
In this new era where the ecosystem of systems holds sway, traditional approaches to IT often fall short in delivering on the potential that it offers. Typically, organizations would go out and find a tool to deliver new a capability such as augmented reality or a specific solution for the Internet of Things (IoT). They would then spend significant amounts of time running proofs of concept (PoCs) and simply evaluating how different systems could best work together. To expand on the IoT example, a vast number of different PoCs have been driven around IoT across the world. Around 80% of them never get into production. The problem is that there is often a fundamental lack of understanding of the monumental amount of work required to get value from the solution when it is taken into production, primarily because of the effort needed to get every element of it to work in tandem together.
To do this effectively, businesses need to connect with technology that can help coordinate the ecosystem of systems and allow it all to work together as seamlessly as possible. These systems and platforms need to be truly open. That will include having an integrated workflow engine that can work across and within each of the systems. That also means having a completely open system at the back end that can consume capabilities and data from many different sources, both internal and external, directly. The ability to take in excellent weather data and pair it up with historic demand data to create a new more agile demand forecasting model for procurement is just one of many examples here.
Put bluntly, to enable businesses to thrive in this new ecosystem of systems, technology vendors need to concentrate less on delivering traditional ICT ’solutions’ and more on capability that will actually provide customers with business value, fast. Customers will be freed from focusing on what their enterprise resource planning (ERP) or enterprise asset management (EAM) system needs to do in technical terms. Instead of wrestling with the constraints of these traditional application silos, they can use the precise technology functions that allow them to best leverage the ecosystem of systems and optimize it to deliver the critical ‘Moment of Service’ to their customers. Whether that is about shipping quality products and delivering on time or to promise, or predicting when a product will need servicing and scheduling an engineer to visit ahead of time, perfecting the Moment of Service is where any business can achieve an edge on their competitors.
At the same time, every organization needs to ensure that the technology it has supports its assets in operating at optimal levels and in driving innovation. Finally, it is also about helping empower the business to have the right skills and people available at the right place and time to drive productivity and engagement.
Optimizing the approach
A mindset shift is required in business today. Rather than an organization thinking about its operations in line with ERP and service management, they should flip their perspective and think about their operations in line with customers, assets and people. The key for enterprises moving forwards is to use technological capability to harness their ecosystem of systems, to optimize their offering across these three areas and deliver Moments of Service.
In today’s business world, everything is connected. If enterprises are able to understand that and ensure that they harness the ecosystem of systems to provide their customers with the precise systems, solutions and capabilities they need when they need them – at the Moment of Service – they will achieve business advantage and competitive edge.