On March 9th, the European Commission set out the ambitious objective of having “75% of EU companies using Cloud/AI/Big Data” by 2030. The Commission also recalled that certain of our “industrial and services ecosystems...are lagging behind”. This is especially true in industry, which is beginning to ask the right questions and tackling the digital transformation at the company level.
According to PwC, in 2018 only 10% of industrial countries could be considered digital champions. For a long time, they rolled out digital solutions in various branches of activity without thinking about whether these solutions were coherent all together. As digital technologies took on a greater role in activities overall, these siloed approaches became less effective and relevant. To speed up the switch to digital and bring back growth, above all they must harmonize the digital services they offer and how they use industrial data.
Today, digital technology is everywhere, from your HR system to the Internet of things and robotization. It adds value to all industrial activities. The transformation’s speed means these solutions can no longer be considered independently. Even worse, doing so would be totally insufficient given all that is now at stake: the customer experience, using AI, the switch to 5G and the Internet of things.
While a recent study from McKinsey showed that 75% of companies “expected investment in new technologies to accelerate in 2020–24”: these investments must come with a desire to harmonize the digital services on offer. A harmonious digital service offering is an even greater priority than rolling out new technologies that are not well integrated into the existing environment. By offering a coherent digital environment where the various services interact with each other, are interconnected and easy to use, industrial companies stand out from the rest and build customer loyalty.
Furthermore, they must take care to harmonize the data in the PIM (Product Information Management) system. By looking at the product not just by itself but by taking into account how it relates to the digital environment (indexing, use of product data, data processing, etc.), industry will truly enter into the digital era. Above all, creating value from data supposes that the company has adequate resources to catch and digest this data.
Harmonization is time-consuming and may seem like it moves industrial companies away from the breakthrough innovations that will drive its future growth. In fact, the opposite is true: by doing this work, the company unleashes its potential and prepares to use solutions such as AI and robotization that inherently require great amounts of data.
Harmonizing services and product information increases potential for growth in that it makes industrial companies agile and able to work with other entities, whether within the group or externally with trusted partners or economic interest groups.
This philosophy of shared industrial data is one of the cornerstones of the guidelines the European Commission proposes in its data strategy. Nevertheless, it seems obvious that harmonization is an essential condition to creating “common and interoperable data spaces”. No one would argue that we can trust the market economy to bring about this harmonization by itself.
In terms of data sharing, especially industrial data, past experience shows that it is often difficult to have this philosophy, even within the same group. Just like the work done for the Payment Services Directive (PSD2), it seems more likely that legislation will be needed to speed up the harmonization of practices and create a single market of data. These constraints ultimately presage a great acceleration of innovation, as we saw in fintechs after PSD2.
The industrial companies that get ahead of these changes, that roll out transformation strategies of an appropriate size for their group and that take a company-wide view instead of incremental innovations will be well-equipped for the coming decade. By harmonizing digital services and product information management (PIM), these companies will be ready for the transition to industry 4.0 as actors and drivers of the “age of renewed economic progress” foreseen by the McKinsey Global Institute.
Jean-François Crépeau, Digital consultant & program manager & Nicolas Ressouches, Business unit manager