Building the Digital Factory Value Chain: How to Maximize the Value of IIoT and IoT


Over the past half-decade, companies in manufacturing-related industries have begun to tap the potential of the digital factory value chain – and, in so doing, have begun to transform their operations and the larger value chain. By championing digital connectivity, these enterprises have created transformation initiatives that allow them to measure and optimize their processes via quantitative means as opposed to only qualitative means.

Manufacturers and enterprises in other industries that rely on operational connectivity have invested heavily in digital factory initiatives. This trend is clearly visible in the advent of Industrie 4.0 in Europe. In fact, digital factory initiatives across industries are projected to contribute significantly to the global GDP over the next two decades.

However, recent research shows some slowing in investment related to the digital factory value chain and industrial internet of things (IIoT) initiatives in the manufacturing and connected industry segments when compared to other segments. Why? ISG finds that many manufacturers struggle to get started with digital factory value chain initiatives. Others find it difficult to maximize business case projections or scale their use cases across the enterprise. Investing in the capabilities needed to optimize the digital factory value chain is expensive, and manufacturers need a pragmatic top-down and bottoms-up approach to improve value delivery and realize the full potential of digital factory value chain business cases.

This ISG white paper Building the Digital Factory Value Chain: How to Maximize the Value of IIoT and IoT explores the three distinct phases:  

  1. Define the digital factory value chain vision and strategy from the top down
  2. Identify and justify digital factory value chain opportunities
  3. Implement transformational digital factory value chain initiatives and measure performance from the bottom up, working the details from the individual use cases and business case justifications specific to each use case. 

About the authors

Jim Routzong is an expert in engineering services sourcing, application development and maintenance (ADM) outsourcing, IT infrastructure outsourcing (ITO), restructuring/renegotiations, and business process outsourcing (BPO). Jim led the engineering services global market analysis and business case development that justified ISG’s market entry with the Engineering Solutions Service Line. Jim was instrumental with the start-up and establishment of its Engineering Solutions Service Line with the design and establishment of multiple solutions and services including successful client service delivery, IP development, engineering services conferences, and white papers. Jim is ISG’s Engineering Solutions Service Line Knowledge Manager. He has led or participated in numerous ISG engagements over the past decade and a half across many diversified clients and global industries from vehicle to high-tech and heavy equipment manufacturing, aerospace and defense, retail, energy, financial services and insurance, biotechnology, and media and entertainment. Jim is ITIL Foundation v3 certified.