Industry 4.0 (or 4IR – 4th Industrial Revolution) was conceptualized more than a decade ago, but the pace of change and technological maturity required has recently been achieved. Analytics, IoT, AI/ML, and other technologies slated to bring this change in manufacturing have finally come to an applicable stage. Industrial technologies of the digital age are becoming essential for manufacturers to remain competitive in the market and improve sustainability.
CIOs in manufacturing are no longer able to focus solely on IT infrastructure and the general digital health of the organization. The technological advantage of 4IR technologies puts CIOs in a highly strategic position in a manufacturing company. The reason behind this shift is simple –
- Data technologies have already proven their worth in decision-making and other business processes.
- Industrial IoT will enable deeper monitoring and management of production and related processes.
- AI and machine learning will accelerate analytics in real-time and automate many processes throughout the business ecosystem.
- Cloud computing will ensure these implementations can be scaled to cover the entire business ecosystem.
This puts CIOs in a complex situation where their decisions can impact the entire business and brings forth key challenges CIOs will face in 2023 and beyond. Here are the key strategic challenges for CIOs in the digital age of manufacturing.
Visibility in the Digital Ecosystem
Digital transformation initiatives are often hindered by the digital ecosystem that is already in place. This is due to the need-to-need basis implementation of technology over time which has created siloed and disconnected systems. While the digital ecosystem is supposed to be complex, it can’t be called an ecosystem if this technology distribution continues in siloes. The major disadvantage of the situation is the lack of visibility on the organizational level.
As a minimal requirement, master data management and data hub platform are the most important implementations to overcome the visibility problems. Connecting all enterprise systems to a data warehouse is required to get a high-level picture of the organization and plan strategic initiatives. Data technologies are also the foundation for all 4IR implementations and the first step to digital transformation.
Slow Pace of Change with Legacy Systems
The lack of visibility mentioned above is partly due to the aging legacy, on-premise IT infrastructure. On-premise systems are very expensive and yet, limited in capacity. Plus, their on-site nature also makes them less flexible for enterprise-level use cases. While it is not impossible to scale them up and modernize them for the intended use and capacity, it is very costly to do so. And the performance, reliability, and future-proofing will remain subjective.
Cloud computing offers the right platform and infrastructure to enable flexible and scalable models. It can be used in tandem with legacy systems as well. However, the major advantage of cloud technologies is that they are compatible with a wider range of technologies and provide near-zero downtime, some things that are absolutely essential for implementations like automation, IoT, and AI/ML.
Security and Compliance
Another major challenge for CIOs in manufacturing is ensuring cybersecurity and compliance. With data centralization and self-operating technologies, security is a major concern for enterprises, especially manufacturing. Regulatory practices around data collection and storage are also getting strict by the day. The loss due to security events can have unpredictable and unplanned consequences for a manufacturer.
Security in the digital ecosystem is always at threat due to continuously evolving technologies and the ecosystem. Human errors and other factors are also highly unpredictable. Thus, visibility, real-time monitoring, and automated security operations (SecOps) are the key to mitigating them and taking preventive measures.
Management and Decision Making with IT
Technology has been a supporting tool for manufacturers until now. Industrial technologies are capable of operating business processes autonomously and gathering real-time insights. This puts CIOs on the frontline of business management and decision-making. On the bright side, CIOs can rely on the same technologies to perform analytics and provide insights to drive business critical decisions.
The extent of infiltration technology can have in a business will become very deep-rooted in the near future. While manufacturing organizations will empower their production and business growth, there is a lot more that can be achieved through it. This will make the role of CIOs overall with other CXOs and departments. As technology evolves in the organization, the roles of CIOs will also evolve with it. This is perhaps the biggest challenge CIOs will face in the future, but they’ll also have reliable technology to back them up.