LNS post-hype cycle predictions for Digital Transformation and IIoT. Companies should decide now which use cases they’re going to focus on in 2018.
During a recent conversation with LNS Research Analyst, Pete Bussey, it dawned on me that the Industrial Internet of Things (IIoT) threatens EHS leaders in the same way that maintenance professionals risk becoming 21st-century blacksmiths.
Up until now, Asset Performance Management (APM) has been the poster-child activity to demonstrate IIoT value. As the market becomes saturated with APM examples, IT departments are looking for new places to experiment. With Big Data & Predictive Analytics and the growing use of Machine Learning, specialized knowledge of any domain is becoming less critical and those who have relied on that knowledge for job security may find that it doesn’t offer as much as they previously thought. Unless EHS professionals look beyond compliance as their raison d’être, they risk becoming nothing more than file clerks.
EHS Needs a Makeover
Environment, Health, and Safety (EHS) management has traditionally been viewed, at best, a key tool for Operational Risk Management (ORM) and, at worst, a necessary compliance function to meet regulatory reporting requirements. EHS applications have, in many cases, been point solutions, either installed on-premise or hosted in the Cloud. Integration has been limited and mostly focused on getting data to populate regulatory reports. This is not to say that there are not leading thinkers in the EHS space both on the supplier side and the end user side that recognize that EHS can be much more.
But, those cases are the exception and have required significant investment levels, either by the product builders or the end users, to get to where they are today. LNS often hears from EHS end users, as well as the supplier community, that there are struggles with getting “a seat at the table” for EHS when it comes to discussing IIoT investments and Digital Transformation.
In some respects, this is EHS’s own doing. When EHS deploys isolated point solutions and focuses on compliance and reporting, they are seen as outside the operational footprint. EHS needs a makeover to change from being seen as a “necessary evil” into a key contributor to Operational Excellence in far too many companies today. The good news is that the time is right now and that with just a little effort, the majority of EHS professionals can make the right moves.
EHS Is Part of an Operational Architecture
Operational Architecture is the way LNS defines both the process of aligning business drivers with technology plans and the resultant architecture of the technology. Since EHS ties, as the image shows, to all the other pillars of Operational Excellence, it must also be part of the Operational Architecture.
As the IIoT makes more data available to everyone, EHS has as much right to and vested interested in, that data as maintenance, operations, quality, or energy management functions. In fact, much of the data used by the rest of the operational pillars is the very same data needed to not only satisfy EHS reporting requirements, but to fulfill the larger role of ORM.
The Risk to EHS Professionals
The challenge EHS professionals face is to move beyond a passive descriptive role (reporting) and even beyond a CAPA (diagnostic) use of information. Thanks to Machine Learning, maintenance, quality, and operations are moving towards a prescriptive use of analytics. EHS must move the same way. They need to make the case that true-optimized performance cannot be achieved without EHS being part of that equation and they can’t be part of the equation if they are not part of the Operational Architecture.
If EHS professionals don’t understand this, communicate it, and become their own advocates, others such as forward thinking IT leaders that have been commissioned by top management to lead the Digital Transformation will relegate them to becoming nothing more than file clerks creating regulatory compliance reports.
Business leaders are inundated with messaging about Digital Transformation and the IIoT. Few executives have not bought into the idea they need to be doing something to leverage technology to change their business model, lest they get caught off guard much like the taxi industry was hit by Uber. Effective leaders have chartered their CIO’s, or Chief Digital Officers (CDO’s) to kick off an IIoT project and to demonstrate some progress in Digital Transformation.
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