Digital transformation brings significant organizational challenges, especially in asset-intensive industries. To digitize an asset-intensive business, leaders must think in new ways about business plans, revenue streams and operational improvements that rely on assets, products and external partners. The nexus of 5G, edge computing, AI, smart devices and cloud will bring hitherto disconnected areas in the organization closer together and offer new value to be harvested at the intersections of these areas.
The goal is to create a secure, intelligent, connected enterprise (SICE).
The three technology areas that have been left behind in digital transformation are: 1) operational technology, e.g., oil rigs, factories, shopfloors, far-flung labs, 2) value chain technology, including real-time interactions between supply chain partners that go beyond data exchange to actual real-time actions and decisions, and 3) customer technology, where dumb products have to compete with smart home environments. As these three technology areas converge, the intersecting intelligence and value generation will create new digital connected touchpoints.
We see a future where new players will create secure and intelligent platforms for connected use cases. This will need a special blend of 5G connectivity, edge computing, AI capabilities, cybersecurity technologies and specific clouds. Enterprises that adopt these new platforms will complement connected assets with analytics and AI/ML to facilitate autonomous, secure, closed-loop decisioning that continuously translates information into insights. These insights will drive intelligent “next best actions” that are contextual, consistent and guided by clearly articulated business objectives.
Building a Connected Value Chain
Closed-loop enterprises along with connected value chains will be well-positioned for product as-a-service business models that can unlock further business value. But how does one go about leveraging the possibilities of SICE?
The SICE approach calls for a three-staged plan:
- Clarify precisely what business objectives and levers are most critical to the organization’s ability to profitably grow and compete.
- Replace a long-term planning culture with an aggressive, risk-taking, fail-fast, innovation-focused “venture capitalist” approach to digital transformation. That means monitoring assets continuously – day in and day out, not annually – so you are always poised to adapt and optimize them according to the business value they are producing.
- Maximize the value of data and analytics through agile digital platforms that enable the organization to orchestrate insights across multiple teams, data sources and data types in a secure and scalable way.
The convergence of 5G, edge computing, AI, smart devices, and the cloud creates a significant opportunity for asset-intensive businesses to create new digital touchpoints and value chains. Organizations that adopt SICE will enjoy a more secure, intelligent and connected enterprise that will help them better compete in the digital economy.
ISG helps enterprises compete in a cutthroat market. Join us at the ISG SICE Summit to learn more about the SICE operating model and outline your next steps in becoming a secure, intelligent and connected enterprise.