Open search

    Building the businesses of the future today

    When we talk about the technology revolution, the easiest way to think about it is in terms of short term changes. Today, most companies look at digitalization and its potential through practical benefits: understanding that AI and analytics can reduce emissions, make a manufacturing plant run more efficiently, save energy, increase competitiveness and improve services to customers.

    The next step is to look even further.

    A new business model for industry

    Currently, most industry is based on a model where the design and manufacture of products and the associated infrastructure are under the control of a single owner. With the development of production technology and digitalization, it is possible that process industries, for example, will change, sometimes even radically. In the future, and as technology advances, it is predicted that the market will be divided between those who own the infrastructure and those who use it.

    The envisaged change means that customers will buy manufacturing rights instead of finished products. Once they have bought the rights, they rent production time in a nearby factory, enter the manufacturing parameters into the machinery and push out the products they want. Similarly, consumers can buy a recipe for printing the product they want and rent a 3D printer at their nearest kiosk. It's not just about using drones for last-mile delivery, but about changing the whole market.

    Such a major shift may sound far-fetched, but it has happened before. When the switch from horse-drawn carriages to cars was driven by the desire to get from one place to another more quickly and the fact that it was cheaper to maintain a car than a horse. The new technology was perceived in terms of practical benefits, but there was no understanding of how it would change the whole logistical network. Now digitalization will do the same, and the key is to look beyond the status quo and seize the opportunities that change brings in time.

    The digital twins are here and now

    While the scenario described above is yet to materialize, there are already a number of potential technology solutions for real life. One of the most interesting is the digital twin and its introduction into the upstream of manufacturing plants. The trial run and test phase of a new plant are typically long and challenging processes, but digital twins allow this to be done more efficiently. By modeling the plant and using the modeling to simulate the controllers and parameters, the plant can be optimized to perform at its best − even before it exists.

    While digital twins can save time and money when upgrading plants, they are not yet mainstream. When a technology is at the stage of maturity where its exploitation is not a survival imperative, the temptation to go traditional is high unless a company has a strong vision for the future; one of the most difficult aspects of adopting new technologies is identifying the right time to invest.

    Maintain a snapshot of both opportunities and threats

    In order to make timely investments in new technologies and to take advantage of technological disruption, company management must have not only a vision for the future but also a good snapshot of the present. They need to maintain an understanding of what emerging technologies enable in terms of their business logic and the direction in which competitors and customers are heading.

    This situational awareness must also be maintained with regard to cyber security, which is inevitably linked to digitalization. This is the only way to understand what threats are out there and how they relate − or if they relate at all − to your business processes, network traffic, and information systems.

    It is often a good idea to outsource this type of analysis or data analysis to a specialist external partner. It is then the responsibility of the company to integrate the snapshot into its own strategy and planning work.

    Change is necessary, but it requires courage

    It is clear that the market is changing and digitalization is essential to maintain competitiveness and create new value. When companies have a good understanding of where technology is going, how it can be used, what the risks are and how to manage them, it is ultimately a question of the desire to evolve and the courage to take the next step.

     

    Author

    Henry_Nieminen

    Henry Nieminen

    LinkedIn