Industry 4.0 • June 8, 2018

Manufacturing Enterprises Must Align IT and OT to Obtain a Competitive Edge

Operational Technology (OT) and Information Technology (IT) often exist in completely separate worlds within a manufacturing enterprise. However, according to Gartner analyst Kristian Steenstrup, “by 2020, 80% of asset-intensive industry CIOs will be responsible for OT data and embrace IT/OT integration as a strategic imperative.” This trend is driven by a transformation in the workplace that aims to blur the dividing lines between the digital world and the plant floor.

By incorporating sensors, the Internet of Things (IoT), smart machines, digital twins, asset tracking, robotics and other areas of OT with IT, manufacturing companies can realize greater efficiency, higher revenues and new market opportunities. Manufacturers who continue to cling to traditional business models and who fail to align IT and OT will likely begin to witness stagnation and loss of market share due to market disruption.

The Operational and Financial Benefits of Aligning IT and OT

Manufacturers in the asset intensive sectors such as discrete manufacturing, aviation, aerospace, energy, oil & gas, who do not begin to align IT with OT, put themselves at risk of being surpassed by more nimble competitors who have grasped the financial and operational potential of the IT/OT merger. By aligning these technologies, both sectors are placed under one umbrella, lowering software licensing costs, simplifying cabling and integrating networks. This also helps to achieve an economies of scales in procurement, a comprehensive safety net via unified disaster recovery technology, centralized support, end-to-end cybersecurity coverage, and greatly reduced hardware costs.

An example of the diminishing effects of restraining from making this digital transformation can be seen in the case of an U.S. water utility. This company discovered that they had been paying for company-wide licenses for the enterprise databases of both the IT and OT departments. By reviewing their licensing needs in alignment, the company acquired massive financial savings.

The alignment of IT and OT must be viewed beyond the CAPEX basis, however, to avoid the shallow perception of the overall benefits of the transformation. Operational costs can be lowered substantially due to projects run in tandem. Independently selecting and deploying technology can result in inconsistent and redundant proprietary data storage. When established on disparate platforms, these stores will not interoperate, squandering the organizations value.

Manufacturing Enterprises Can Improve Organization by Aligning IT and OT

From a business intelligence viewpoint, it is no longer feasible for IT and OT to silo information in disparate data stores. Tremendous organizational insight is being mined by those who subject all of their available information to advanced analytics and machine learning. Bringing IT and OT databases onto a common platform can unearth marketing gold, new vistas of operational efficiency and chart a pathway to strategic success.

IT and OT can often operate at cross-purposes, leading to delays that result in a higher overall OPEX. This is why it is important to align the mission and the goals of both departments. Two separate, warring management teams can escalate governance overhead dramatically. However, CAPEX and OPEX savings pale in comparison to the improved agility of information leverage. Manufacturers that embrace IT/OT alignment experience more rapid project implementation. They benefit from aligned standards as well as simplified designs and builds. They can respond to shifts in the business environment or sudden market disruption with speed and confidence. Some manufacturers even gain the ability to disrupt their entire sector.

Other Manufacturing Benefits of IT and OT Alignment

In addition to the financial, operational and organizational benefits of IT/OT alignment, there are also a number of new technologies being introduced into manufacturing that provide further reason to embrace this digital realignment. Robots, sensors, asset tracking, IoT and process control tools are adding greater levels of complexity to OT. This trend will only accelerate over the next few years. Gartner predicts that this will generate a higher level OT dysfunction due to poor software management and overall complexity making this the best time to bring IT and OT together.

Steenstrup claims that “organizations with improved access to reliable, real-time, consistent data can enjoy a new competitive advantage”. In addition, he provides a long list of benefits of IT/OT alignment that include a more sophisticated maintenance and repair, greater uptime, higher revenue, improved equipment reliability, lowered costs and accelerated market agility.

iBaseT Solumina offers the best way for manufacturers to ease the transition of IT/OT consolidation. Its software seamlessly operates between IT systems such as CRM, ERP and BPM, and OT systems such as MES and other shop floor tools.

For more information, check out iBaseT’s Enabling the Digital Thread eBook.

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