Key Takeaways From the IDC Manufacturing Summit 2017
The 5th edition of the IDC Pan-European Manufacturing Summit took place in Dublin this year. Themed “Win Fast, Scale Fact, Innovate Big,” the two-day event set out to measure the pulse of digital transformation in European manufacturing.
About 45 manufacturing delegates from 15 European countries participated in the event, with job roles including both IT and non-IT in C-level and line-of-business (LOB) management positions. The summit, ranked highly by delegates as a place to learn about key industry trends and best practices in particular, included keynotes by end users, technology vendors, vendor-led workshops, panel discussions, and one-to-one networking sessions.
No Fear of Change
Change management was the most recurring topic throughout the summit, fueled by the results of our delegate pre-summit survey, which showed that 42% of the delegates from European manufacturing companies currently see cultural change as the number 1 challenge while implementing their digital strategy. Whether or not you agree with Harvard Business School Professor Dr. John Kotter’s statistic that 70% of change initiatives fail, delegates agreed that most people resist change in the workplace; in the case of digital transformation, which significantly disrupts an organization’s processes and operations, this resistance can hinder further acceleration.
The delegate audience unanimously agreed that fear should not be the main driver of change, and neither should change just be a box-ticking exercise. Instead, the transformation needs to start with a C-level-driven burning platform (the business imperative your organization is trying to solve) that gets people involved right from the start and answers the “what’s in it for me?” question.
To help adjust to new roles, mindsets, processes, and using multiple new systems, training of course is essential. However, there was consensus on the fact that traditional training is dead, and that companies need to become more creative about how they can turn their workforce into digital natives, and for some this means having a digital evangelist on each floor.
A Leadership Which Explains the “Why”
Leadership and executive support was another key thread that ran through the summit’s conversations, and the key here is to create commitment for results, which is what inadvertently creates shareholder value. 80% of leaders, as was highlighted in a keynote by guest speaker Peter Rosseel, director of Management Consultant Research (MCR) and visiting professor at the University of Leuven, should focus on that, and only 20% should focus on the results. The closer leaders move to the 20%, the higher the risk that they end up micromanaging, not leading.
The other aspect of leadership is that it needs to provide a clear vision of what exactly the transformation will accomplish. Our pre-summit survey revealed that a quarter of the delegates who are currently implementing a digital transformation strategy struggle with identifying short- and long-term business benefits. In other words, they lack direction and are stuck on their journey. To get the buy-in and motivation from employees and stakeholders, it’s essential for leaders to clearly and continuously communicate the digital vision, its objective, and the impact it will have on the organization. This also includes any changes that come along the way.
Not Big, But Right Data
Another obstacle faced on the road to digital transformation is not the lack of (Big) Data, but rather the lack of data quality. This is another area that calls for the authority, vision, and direction of the C-level suite which ultimately needs to set the strategy and define which data is needed in the first place. The other challenge with data is that it requires dedicated people who are focused on finding all the relevant data, securing access to it, and ensuring it’s not only high quality but also reliable, trusted, and in a format that can be used and reused. The growing interest in the area has led to the creation of new data officer roles, which, as pointed out by some delegates, highlights the fact that human intervention is still critical. And because Big Data is about empowering people, the user interface/visualization aspect of it is also key.
One delegate closed a discussion session on the topic with the rhetorical question, “”If we add more and more data, do you think there will be a time when Big Data will no longer be important?” While the answer is not obvious, we may speculate that as analytics technology becomes more advanced, we will reach a point at which we will be able to achieve more with less, and will ultimately stop obsessing over data volume/quantity.
Converge Technical With Business Skills
The acceleration of digital transformation requires a new kind of talent that extends beyond the job role of the traditional software developer. According to the latest IDC European DX Practice Survey (March 2017), the skillset most difficult to fulfil for Western European manufacturers is IT/digital, even ahead of engineering. Manufacturers will need to look for technical consultants, data scientists, software engineers, cybersecurity strategists, project managers, and many other new and emerging job roles.
However, as delegates discussed, drawing from previous experience, the convergence of technical skills with the existing business and operational skills is key, and efforts range from mentorship/coaching initiatives to setups where, for example, data scientists work in conjunction with demand planners.
Tackling Use Cases, in the Right Order
Use cases are increasingly gaining importance when it comes to the exploration of new ideas and the prioritization of tasks along the digital transformation journey, but there can be too many to choose from. It seems obvious, but use cases need to be prioritized depending on factors such as industry, customer demands, and risk factor; as one delegate recommended, the number should be tractable to ensure success. And finally, it’s worth considering a unified platform which connects all the data and helps with the enablement of use cases.
A Positive Outlook for Manufacturing
You might have noticed that we have referred to our pre-summit survey — which we used to gauge the level of digital maturity on a sample represented by delegates from large manufacturing companies across Europe — throughout this blog. The key themes summarized above speak for themselves, but our analysis shows us that the majority of companies are well underway on their digital transformation journeys. There is still more work to be done before they get to a point where they would be considered, as defined by IDC, “digital disruptors,” but if we look at the emergence of innovation accelerators such as additive manufacturing, robotics, and blockchain, where we expect increasing adoption over time, we are optimistic that European manufacturers will leverage these technologies to master the challenges ahead.
We would love to hear your comments and look forward to continuing the discussion about key trends shaping the European manufacturing industry. Please feel free to get in touch with us to learn more about our ongoing research in this industry.
IoT platforms in healthcare - A journey from a digital era to an intelligent era
European healthcare providers have a good understanding of what the Internet of Things (IoT) is. Whether used to tracking patients’ vitals remotely or to monitoring home medication dispensers, IoT solutions are countless in healthcare. Intelligent sensors are deployed on a smart space to gather real time data. This data can be aggregated, stored and correlated to infer new information faster and more accurately – Which ultimately will be an important driver of health care digital transformation.
As a next generation technology, IoT accelerates innovation enabling a new information management strategy that transforms the patient experience, optimizes operating models and orchestrates internal and external resources. By 2020, adoption rates of IoT-enabled asset tracking and inventory management systems in hospitals will have doubled worldwide, improving patient safety, staff satisfaction, and operational efficiency [(1) IDC FutureScape: Worldwide Health Industry 2018 Predictions]
However, to date only the 17% of IoT projects have been fully deployed [(2) IDC EMEA IoT Survey, 2017]
The top reasons include:
- Ongoing costs. Implementing an IoT solution involves maintenance cost of infrastructure, hardware (such as scanners), and software (primarily software-as-a-service (SaaS)) cloud installation. Infrastructure management is further complicated for the lack of IT standardization across healthcare platforms and devices.
- Complex implementation process. Planning and implementing an IoT project requires specialist resources and knowledge and the project often has an extended timeframe of several years for full deployment.
- Data security concerns. Health data is particularly sensitive data. The increasing interconnectivity of IoT-enabled devices collecting and sharing data significantly increases the number of potential vulnerabilities and increases the attack surface by dramatically adding new end points to the hospitals infrastructure.
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Figure 1: Healthcare providers adoption of Analytics in IoT solutionsWhile IoT initiatives drive smart-data windfalls, it is unclear whether the current data infrastructure would be able to withstand the tidal wave of data created by them otherwise. However, the explosion of data that IoT can bring in might be overwhelming and loose importance if it’s not turned into meaningful insights. The future of IoT in healthcare will, thus, depend on the ability of providers to embrace a data process strategy. Although they understand the benefits of combining accumulated data with analytics and decision-support capabilities (Figure 1) to design and implement integrated care initiatives, healthcare providers struggle to handle data in practice. The approach to IoT data analysis is still locked into siloed “intranets of devices,” seriously impeding potential innovation and growth (Figure 2). Analytical capabilities, if primarily implemented on the edge and in real time, deliver timely data presented, for example, by dashboards in the ER or productivity results presented by descriptive analytics. The adoption of aggregated data from different data sources stored in a centralized data lake is still low. Support of operations and the mediate flow within a hospital is therefore preferred over a deeper insight into the data by, for example, predictive analytics.
The journey from data to actionable intelligence is still afar, but progressively supported by the accelerating advances of cognitive analytics techniques, such as machine learning, that might
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Figure 2: Healthcare providers approach to IoT data analysisteach interconnected physical device data to behave intelligently. Integrating human awareness into the devices and environments they interact with, enable healthcare decision makers to scale IoT and dive into the relevant insights for a 360-degree patient view.
Recommended Actions for Healthcare Providers
- Design an overall data process strategy
- Adopt a security-first mindset to secure IoT devices and data: security and privacy by design need to be part of any IoT use case, project or deployment. Fix processes and policy before implementing an IoT technology:
- Develop collaboration between IT and business managers to align clinical needs and requirements with the solution architecture of the IoT project.
- Introduce the role of data scientist/manager to mine data more effectively and increase value to the organization and the patient
- Look for partnerships in the smart healthcare market, where the creation of those new business models also comes in. IoT solutions are still evolving and vendors would appreciate co-designing to leverage product management and technical support.
- Consider the development of an IoT platform where data can be integrated and shared to drive the adoption of a collaborative model based on the convergence of care objectives and processes along the healthcare value chain.
Discover more about IoT in healthcare in the recently published IDC survey: “IoT in healthcare. opportunities and challenges in the era of digital transformation.”
If you want to learn more about this topic, please contact Adriana Allocato at aallocato@idc.com
Blockchain Conquering Industry Sectors Beyond Cryptocurrency Boundaries
IDC had the opportunity to participate in the Blockchain Summit 2018 in London on November 28. This represented a great opportunity to meet players and young entrepreneurs active in the sector across multiple domains, while having insightful conversations with some of first Blockchain adopters all over the globe.IDC European analysts also had the pleasure to moderate interactive panels in three different industries, the key takeaways of which are summarized below:
Music Industry – How to Explain Blockchain to Lady Gaga
In this section we took a deep dive in the Music Industry, a sector completely re-shaped by technologies in the last two decades, from the CD explosion in the ’90s to recent internet-based streaming services that completely turned the industry upside down.
Together with us on stage, Matthew Lennox, musician and director of the production duo Mon Frere Limited, Jason Robert, co-founder of the blockchain-based Event Management platform HelloSugoi, and Hessel van Oorschot, co-founder of the Music Coaching and Coding company New Media Squad, animated the conversation.
While at the dawn of the new millennium the first peer-to-peer solutions decimated the industry, we could be now in the middle of a transition from p2p doom to decentralized rebirth, with Blockchain turning the spotlight on controversial industry themes and promising to tackle some industry barriers, such as lack of transparency, piracy, rights/royalties recognition, and artists-fans engagement.
One of the key target for early stage Blockchain attempts in the industry focuses on the music production and distribution flow scheme. A decentralized monetization chain tracking aims to disintermediate rights/royalties pipeline, undermining large industry gatekeepers’ role and giving product (and revenues) control back to musicians and composers.
In parallel, it will be interesting to follow Blockchain evolution and impact on the Event & Ticketing world. A few young platforms (e.g. HelloSugoi) are already active in this direction, showing how a distributed ledger-based approach could help the music industry to reduce ticketing fees, enable event organizes to participate in secondary markets, and eliminate fraud risk on tickets.
The title of this paragraph gets inspiration from one of the questions that drove panelists’ conversation “How to explain a sophisticate term, such as Blockchain, to non-tech expert musicians (e.g. Lady Gaga)?”. With no need to deepen into technology details, the best way to easily communicate what Blockchain is certainly consists in focusing on the main benefits and opportunities, such as transparency, security and trust, this technology and mindset could lead. A suggestion that perfectly fits end-users approach across all industry sectors.
Blockchain in the Supply Chain – The Point of No Return
Supply chains are no longer traditional networks of OEMS and suppliers, but vast, globally dispersed ecosystems involving a galaxy of different parties. This has made the tracking and tracing of assets (including money, assets, patents, information, goods, etc.) across the whole value chain elusive. Until Blockchain came along.
Guided by the question “Is Blockchain the solution for supply chain transparency?” the panel, composed of Joe Wreford, Strategy Consultant at Accenture, Christophe Ozcan, Credits Advisor & CEO of Crypto4All, Nick Williamson, Founder of Qadre and Jody Cleworth, Founder of Marine Transport International, discussed promising use cases and pilots for this domain. Here are some key highlights from the panel discussion:
- A network based on Blockchain technology can take over functions, which, until now, could only be enabled by an appointed intermediary or centralized database. This sort of set up not only creates more transparency but also eliminates middlemen. In the case of container logistics, a market desperate for cost cutting schemes, Blockchain is already reshaping the supply chain and cutting out/replacing traditional players.
- Immutable, time stamped and accessible, Blockchain also offer proof about how exactly materials or goods were sourced. In the pharmaceuticals industry for instance, where up to 30% of medication globally are counterfeit, Blockchain has major application areas. But Blockchain also helps restore trust in the food and beverage industry. Take the example of the wine industry, which has also been exposed to fraud. Here, Blockchain can help proof authenticity, too.
- Blockchain offers a good opportunity for different industries to rethink their business models and create new use cases. At the moment, consortia, a popular means for enterprises to work together on Blockchain technology, are forming globally. Some of these have attracted significant investments. And unlike common belief, Blockchain doesn’t have to be expensive to deploy.
- To start Blockchain-based networks, companies will need to hire for a new type of talent, which extends beyond the job role of the traditional software developer. They will need to look for technical consultants, data scientists, software engineers, cyber security strategists, project managers, and many other new emerging job roles.
According to the recently published IDC Worldwide Supply Chain 2018 Predictions, one third of global manufacturers will be tracking goods using Blockchain by 2021, resulting in an improvement of delivered product quality of up to 20%. So while adoption will not be sudden but gradual, Blockchain will be a major disruptor, and significantly redefine processes in the supply chain.
Utilities – Crowdfunding Your Solar Panels
The Energy Industry session set off to answer the seminal question: “should energy utilities avoid or embrace Blockchain technology?” Not a trivial question as it would appear on the surface for IDC and its guests on stage, David Ferguson (EDF Energy), Diego Dal Canto (Enel) and Zdenek Pekarek (CEZ).
Peer-to-peer trading of self-generated electricity is the “Blockchain talk of the town” in the industry. Technically, it allows electricity prosumers (producers-consumers) to exchange excess production without the need for an energy retailer or even an energy market, effectively cutting the energy middleman out. This is the single most experimented use case, with many well-funded initiatives and promising startups across the world.
So, utilities should be worried about the onset of Blockchain, right? Well, it depends…
- First, asset-based industries are not expected to be disrupted by Blockchain the same way platform operators in the service industries are. Yes, there is a long-term risk of disintermediation in the terminal segments of the value chain (e.g., retail, aggregation). However, prosumers will still need copper wires to exchange electricity and backup generation when the sun doesn’t shine.
- Second, utilities know all too well that the commodity business is under pressure and have been on the lookout for new business models for years. The “energy as a service” business model, for example, will see utilities move from mere commodity supply to energy management platforms and services, and Blockchain may well be a part of the mix.
- Last, but not least, Blockchain has the potential to materially improve some industry processes and enable utilities to offer new services. Many utilities are busy experimenting with Blockchain well beyond peer-to-peer trading, with wholesale trading, electric mobility, market data management and demand response being only a few promising areas of work.
So, although the market is teeming with grassroot initiatives, initial coin offerings (ICOs), demos and pilots, it’s not just a startup world. Incumbent are driving significant initiatives, often banding together across borders around specific use cases, or to develop common regional or global standards. The Enerchain Project, Oslo2Rome and the Energy Web Foundation were mentioned on stage as examples of contrasting approaches to co-innovation with Blockchain.
Speaking of standards, participants insisted that co-innovation initiatives should have a technology-neutral, use case and customer-driven approach, lowering entry barriers to the technology for stakeholders. “It should not be about Blockchain per se, but about the lowest-cost technology offering the best user experience” – said one participant. Pure technology platforms, on the other hand, pose a significant risk of vendor lock-in at a stage when the technology is still very immature.
Finally, when time to market is concerned, the utilities on stage said they expect the first mass-scale Blockchain use cases to come to commercial fruition between three and five years from now, with select high-profile large-scale trials already happening in 2018.
The Future Ahead
Although Blockchain is still at a very early stage, both in terms of industry familiarity and adoption (according to the recent IDC European Vertical Markets Survey, among a sample of 2,000 European companies, almost 60% of them have never heard the term Blockchain), its application across multiple domains and industry sectors is rapidly expanding. It is undeniable that the technology focus is currently still in financial services and the cryptocurrency sphere, as witnessed by the majority of event exhibitors. Nevertheless, as confirmed by the sessions we had the pleasure to moderate, crisp examples of successful non-financial Blockchain applications are disruptively emerging, giving a glimpse of the potential this technology could have across verticals.
Doubts around Blockchain business models and standard/platform proliferation still remain, but we believe that many of the industry challenges discussed at the event didn’t need to wait for Blockchain to arrive in the first place, but at least in some cases, could have been addressed with already existing technologies.
Nevertheless, it’s undeniable that the excitement accompanying this rising technology is giving the opportunity to discuss and re-think the approach to atavistic themes, still hampering specific industry sectors’ evolution and growth.
Discover more about IDC European Blockchain Team research in the recently published IDC Market Presentation “Blockchain and Distributed Ledger Technologies: Use Cases and Impacts on Market in Europe” and don’t hesitate to reach out to get in touch with some of the IDC European experts on the theme.
We would love to hear your comments and look forward to continuing the Blockchain conversation with you.
In Need of Multi-cloud Direction? IDC Recommends 5 Priority Actions to Get Going
IDC attended Frankfurt Cloud Expo Europe 2017 and several conversations with technology providers there confirmed the trend towards multi-cloud. The managing director of a major hosting provider was eager to get a definition for this “Multi-cloud hype” that was driving him crazy. An enterprise infrastructure vendor openly mentioned that their full strategy was now in building a click-to-deploy control plane for multiple cloud environments.
A major service provider proclaimed to be betting the farm on offering a managed approach to multiple hyperscale backends. Colocation companies pitching GDPR-ready infrastructure, keynote speakers scrambling to explain how you can escape the “Multi-cloud Jungle” and software makers promising application and data portability completed the picture.
Multi-cloud craze – much like the Christmas market craze here in Frankfurt – was officially on.
We wrote in August about our belief that Multi-cloud strategies are a must for large enterprises (in a programmatic form) as well as for midmarket organizations (in at least a basic form). Vendors are taking note and ramping up the hype – but not always in the directions buyers are going. So a question we always pose supplier is: which steps do you recommend your customers to take in the journey? Responses vary in quality. In the Christmas market world, it is as if someone is telling Santa Claus to take the plane to Jakarta, someone else is recommending a new set of hoofs for the reindeers and others believe the quality of Santa’s gift bag is the key requisite.
Multi-cloud Infrastructure is a multilayer cake and spans from sapient use of Cloud Code of Conducts for GDPR compliance, all the way down to hardware purchasing models. So finding a starting point is easier said than done. To help buyers get moving (i.e. remove excuses!!), we identified five key actions to start with:
- Start from a well-defined pool of resources when using aggregation software.
- Standardized “images” across clouds when using deployment automation.
- Set up a cross-country plan for into-cloud connectivity.
- Define with end users how to formalize cloud use chargeback.
- Hire IT generalists that direct your cloud journey.
Those five actions map to the five key dimensions IDC segments and Multicloud readiness with: Cloud Vision, Cloud Economics, Process and Compliance, Technology and People. Many layers of the cake – so prioritization is important!
The above-mentioned action items are described in detail in a report providing real-life examples of organizations (both xSPs Service Providers and End Buyers) that have taken those steps. We are also completing a large primary research effort to assess how European buyers sit in that readiness map – and whether it’s the hoofs or Santa’s bag in need of a revamp.
- Five Actions European IT Buyers Should Take to Enable a Multi-cloud Strategy
- Mult-icloud Infrastructure in Europe: How Can Enterprise Providers Nail It?
- European Multi-cloud Readiness – What Survey Data Tells Us (forthcoming, 1Q18)
For German-based representatives, Carla Arend, Matthias Zacher and Giorgio Nebuloni will help moderate an invite-only Multi-cloud Summit in Frankfurt, on March 12-13, 2018, with the goal of helping senior IT decision makers and CIOs on the multiple dimensions of Multicloud readiness.
If you are interested in more information, feel free to contact Giorgio Nebuloni gnebuloni@idc.com or follow us on social media.