Can the CIO Facilitate IoT Line of Business Convergence in the Smart Plant – Part 2
Is IoT line of business convergence part of the CIO’s next evolutionary role as smart enterprises undergo digital transformation?
In Part 1 of this 2-part series on IoT convergence, I discussed the pivotal role both the CIO and COO play in facilitating IT OT convergence in industrial and manufacturing environments. The epicenter of IT OT convergence leverages the collaborative relationship between the CIO (Chief Information Officer) and the COO (Chief Operations Officer).
Operational information that is gathered, analyzed and interpreted has broad-reaching implications, and not only within the context of the plant floor. The pressing question becomes: How does IT OT (information technology, operational technology) convergence translate into tangible line of business value creation?
The CIO has a role to play in facilitating IoT line of business convergence with the plant floor.
Isn’t it time for both sides of the business equation to collaborate more productively and profitably on behalf of customers?
Yes, the concept and model for Business-IT convergence has been around since the 1980’s. However, organizational structures, functions and cultures struggled then with putting even Business-IT convergence into practical application due to shortcomings in vision and skills.
Enter the industrial Internet of Things or the Fourth Industrial Revolution. Within connected, industrial IoT environments, data becomes the common currency of the enterprise. As a result, IT infrastructure becomes the organizational common denominator connecting the plant floor to the C-Suite.
Consequently, the concept of convergence is re-energized. The industrial Internet of Things context expands the value conversation beyond either Business-IT convergence or IT OT convergence. Rather, the concept and context – in theory and in application – become holistic.
The Factory of the Future targets a fully integrated value chain.
To accomplish this endpoint, the CIO must take an active role facilitating IoT line of business convergence.
A fully integrated value chain involves a seamless relationship between an organization’s supply chain and its customers. The goal is creating a continuum of value contributing to customer success, customer loyalty and customer retention.
Consequently, the CIO takes on a translational role within the enterprise. They sit at the intersection between customer-facing line of business units and operationally-focused manufacturing ones.
Within the factory of the future, the focus becomes how each element of the supply chain converges to create total value for the customer. Consequently, relationships, business models, workflow and exchange of data are strengthened across the enterprise.
Three key factors impact the success of IoT Line of Business Convergence for the smart plant.
The Boston Consulting Group (BCG) study, The Factory of the Future, surveyed 750 manufacturing product leaders from automotive, engineered products and process industries. BCG wanted to define the vision and roadmap to move factories from the present to 2030.
Overall, three key enablers emerged from this research. Primarily among respondents in the automotive segment, 35% saw organizational structure and culture as impeding successful implementation of strategy.
The enablers are:
- Strategy and Leadership – Do leaders have a strategic vision to drive implementation?
- Employee Skills – Is the workforce IT-savvy, regardless of job title or functionality?
- IT Infrastructure – The interrelationship and conundrum of Accessibility, Cloud, Connectivity and Security continue.
If these factors sound familiar, they are. These three enablers are the same factors impacting successful implementation of Business-IT convergence in the 1980’s.
Therefore, creating and implementing an IoT human capital strategy is critical to delivering on these enablers.
Human capital strategy involves creation and alignment of a workforce customized to meet the vision, strategy and tactical objectives of an organization. The industrial Internet of Things environment challenges an organization’s current, dynamic mix of people, software, processes and machinery.
Consequently, the factory of the future leverages a workforce which was hired for, and is comfortable working within, a convergence environment. Not only does IT infrastructure become the organizational common denominator. Also, the workforce translates the implications from analytics into actionable concepts which are relevant and valuable to line of business leaders.
As a result, the workforce continuum from C-Suite to loading dock employees, is recalibrated for leveraging an integrated value chain to achieve customer success. Within this continuum, the CIO is hired to facilitate IoT convergence strategy.
Executing an IoT human capital strategy helps everyone throughout the enterprise understand how “what they do” becomes valuable to the customer.
In connecting the value chain dots, leaders, managers and employees collaborate across professional disciplines and socio-economic and cultural barriers. The enterprise architecture is flattened. Employees become as interoperable as are the manufacturing software interfaces and machinery.
A fully integrated value chain walks IoT line of business convergence throughout the enterprise. Think about the implications for your own organization, today. Then take action.
What small steps, and beta projects, can you undertake to connect people through data?