Optimize Operations and Business with IIoT: Are We There Yet?

This blog was originally posted by ARC Advisory Group.

Many industrial, energy, and public sector organizations are already progressing along their own digital transformation journeys. They often started by focusing on asset uptime and asset performance. Recently, we see that that many organizations are now actively seeking to apply these new technologies and capabilities more broadly, to improve their operations overall.

Operations Performance Management (OPM) systems act to improve the responsiveness, throughput, quality, cost, profitability, and efficiency of production or service systems. OPM typically includes process optimization, operations intelligence, and forecasting, and often involves technologies such as modeling, process data collection, visualization, and analytics. OPM systems often act together with Asset Performance Management (APM) systems, which focus on improving the reliability and availability of physical assets while minimizing risk and operating costs.

OPM systems can help organizations run in a sustainable, adaptive manner. They can help optimize an organization's 'fleet' of production or operating facilities.  They can enhance safety and compliance. They can empower workers to handle a wider variety of tasks, and provide real-time decision support to help them do so more effectively. 

Organizations pursuing digitization or digital transformation should consider focusing on OPM systems, and not just transformative new technologies, to drive operations performance to new levels. 

With better data, better visibility, and advanced analytics tools, operations managers can obtain advance notice when their organizations were likely to miss critical performance targets. While systems such as MES or manufacturing intelligence have helped industrial companies reach certain performance levels by improving execution, tracking, and visibility in the plant and connecting plant systems in basic ways to business systems, in many cases they have done all they can and have little capacity to drive performance further. Eliminating this limitation is important in today's increasingly dynamic business environment, where changes to entire ecosystems and business models are underway.

Digital transformation is well underway in leading cities around the globe. But in many cases, municipal operations centers are a relatively clean slate when it comes to OPM systems, so the advantages of better data, better visibility, and advanced analytics tools have the potential to dramatically improve operating performance.

To deal with today's dynamic environment, organizations need to be able to react quickly to changing market conditions and customer expectations, innovate with new business processes that reach throughout the organization and into the design chain and supply chain, monitor and adjust these processes quickly and automatically, and rapidly evaluate alternate scenarios when the inevitable glitches occur. This is a prime opportunity for digital transformation through OPM. 

Successfully innovating at this level involves managing people, processes, systems, and information. And when disruptive technologies are in the mix, the first challenge is often tied up in the interplay of people and technology. Only when the people involved begin to understand what the new technologies are capable of can they visualize the potential 'to be' business models and begin to take the steps towards achieving the innovation.

Modern software platforms can play a role achieving the next levels of operations performance, because they marshal many or all of the needed services in one place, and can provide a development and runtime environment for small or large applications. Services for connectivity and management of edge devices, app deployment, security, integration, cognitive services, and more can be readily accessed. And in some cases, many of the needed OPM constructs are already in place.