The term ‘Industry 4.0’ refers to the fourth industrial revolution, driven by Digital Transformation, and signifies a qualitative leap in the organization, management, and working within the distinct industrial spheres.
The transition of people to interact with their environment is evident which has tremendously changed, encouraged by the technological revolution that is all about automation and data exchange derived from:
- ARTIFICIAL INTELLIGENCE
- NANOTECHNOLOGY
- INTERNET OF THINGS
- CLOUD COMPUTING
- ROBOTICS
- MACHINE-TO-MACHINE COMMUNICATION
The technologies named might be less in words but the potential and power they possess in uncomparable with their evolving subsets and descendants (like machine learning, AR/VR, IOE, etc.).
Today, we no longer talk about integrating technology for the sake of integrating it, but about transforming our ways of doing business, so we cannot allow ourselves to make decisions based on intuition, we need something else to imbue ourselves with Digital Transformation.
What is Digital Transformation?
The introduction of digital technologies in the industry allows the hybridization between the physical world and the digital world, making it possible to link the physical world (devices, materials, products, machinery, and facilities) to the digital world (automated systems).
This connection enables devices and systems to collaborate with each other and with other systems to create a smart tech world full of machine intelligence and further envisioned to go beyond the current revolution.
The whole concept of Digital Transformation can be simply put as the process of converting the entire business environment into data that can be analyzed and exploited where the element “Data” has a leading role since, when exploited, it allows to obtain operational and strategic advantages for organizations.
DATA is the core substance of business reinvention during the present hyper-competitive time where intelligent management of proliferation of data set grounds for digital revolution across the global businesses.
The Digital universe of 2020 will generate around 40 trillion gigabytes(40 zettabytes) of data. IDC’s report on data (2010) predicted that the digital universe would double every two years until 2020 that raises brows on the question of how fast data is growing.
Although most companies have already developed models based on new technologies in certain critical areas such as marketing, sales, or IT, there is still a long way to go that affects different fields. In this sense, it is noteworthy that companies still do not perceive the positive repercussions for adapting their culture to this new reality for the performance of the organization.
In effect, the analysis of the return on investment in digitization is still too linked to the areas of marketing and sales, but companies do not see the importance of the people in the organization in this process or the potential of digital transformation.
[Prefer Reading: “AI-Driven Big Data Processing: Theory, Methodology & Applications.”]
Why Does Digital Transformation Matter?
Industry 4.0 transcends various sectors of society due to the fact that it modifies the way in which day-to-day activities are carried out and has a significant impact on ecosystems since it allows interactions at each point of the network.
Unlike the 3rd Industrial revolution in which the turning point was the incorporation of PLCs or Automata, Robotics, and Supervision Systems, for Industrial Automation, in this New Industrial Revolution, the new actors are incorporated into all these existing Systems (Automata, Robots, and machines), creating a Global Intelligent System.
The Business Perspective
Digital transformation is not just about incorporating technologies in a vague way, it is a process that seeks to reorganize a company’s working method or strategy. With the digital transformation, you can rework products and services, reorganize methodologies and strategies, optimize all processes and departments, save time and costs for design, materials, transportation … always looking for greater productivity or to provide more value to the end customer.
In other words, digital transformation is not subject to a specific technology. It is not necessary that we use Big Data, IoT, Machine Learning, cloud storage, etc. so that we can consider ourselves a digitized company, it is enough to use technology (whatever it is) in an intelligent way to achieve certain objectives or set implement a business strategy.
Digital Transformation is complex and profound, in addition, involves an effort on the part of the entire organization. There is no single application or technology that enables Digital Transformation, but it depends on each sector, each company, and each case.
In fact, any change that involves automating processes, minimizing costs, or maximizing efficiency can mean a Digital Transformation, even if it has not been necessary to implement any new technology. That is, technology is only a means, not the goal itself.
Thus, we can say it without any traces of doubt that Digital Transformation is not an option for enterprises, but a mandatory step for any company that wants to continue competing in this new business environment.
Digital Transformations Across Industries
With revolutions, improvements, and modifications in technology, operations, processes, workflows, digital transformation is here to impact our business strategies as well, in the way we monetize our value proposition.
With digitization and access to data, we can make decisions, sell and enter in a completely different way than we have done until now.
In this sense, we will focus our decision-making on artificial intelligence since we will be able to decide based on patterns generated by algorithms (machine learning) that will define future scenarios, thus passing from intuition to information and knowledge.
Digitization, of society in general and of industry, represents both an opportunity and a challenge for all business industries.
These challenges may come from the hyperconnected client, with great access to information and that is increasingly demanding from companies, or from the necessary adaptation of the industry to new technologies.
The digital transformation of the industry involves the application of a set of technologies throughout the value chain of the industry. These changes generate benefits both at the process, product, and business model levels.
#Process:
The digital transformation applied to processes involves incorporating 4.0 technologies to make them more efficient and flexible, either by optimizing existing ones or changing them.
An example would be 3D printing, which makes prototyping much faster and streamlines the design process. On the other hand, robotics allows processes to be made more flexible so that they are better adapted to customer requirements.
#Product:
The digitization of the products of the industry can suppose the incorporation of technology to the existing ones, thus improving its functionalities, or allowing the appearance of new ones.
An example that illustrates this is the automobile and its evolution towards integration with electronics and digital components, which in new developments already represents 45% of the value of the product.
#Business Model:
Industry 4.0 and its technologies also enable the emergence of new business models, by changing the way a product or service is made available to customers. The digital transformation allows, for example, to incorporate sensors to vehicles, enabling a new business model that consists of renting cars by the hour (‘car sharing’).
Overall, the application of digital technologies guarantees greater efficiency (optimization of energy resources or raw materials and reduction of costs), greater flexibility (possibility of customizing products), and shorter deadlines (shortening the customer’s waiting time to obtain their purchase).
Let’s check out the advantages in detail:
Digital Transformation Benefits for Organizations
We must also be aware that the impact of the digital transformation is accompanied by a series of benefits for the organization, thus improving internal performance and the relationship with customers. Here are some of them:
#Improves worker satisfaction
Thanks to digital transformation, employees become more productive and their operational efficiency also increases.
#Improves the customer experience
Digitizing some company processes increases customer retention levels. In addition, digital channels allow you to interact with your customers in an easier and more dynamic way.
#IT cost savings
The implementation of Cloud Computing services and digital transformation are relevant aspects for reducing economic costs.
#Increase in productivity
Decision making becomes easier and more agile with the help of digital tools. In addition, these tools add value: how can you evaluate your processes, analyze decision making, etc.
#New business opportunities
Transformation and innovation go together. Technology provides new skills and new business processes that favor innovation and the impulse of ideas.
Therefore, the digital transformation must be a progressive but constant process at the same time. Companies cannot postpone their digital transformation any longer if they want to continue competing in a changing and increasingly demanding market.
Digital Age Calling…
Digital transformation is the reinvention of an organization through the use of digital technology, to optimize the way of working of the company and its employees. Organizations must update and implement new technologies, tools, and platforms that are increasingly necessary for business life.
Without this adaptability, companies can fall into obsolescence.
The mere use of technology is not enough to take the step towards digital transformation. You have to raise awareness and train the entire team so that they get the most out of digital tools in their day to day.
