Spotted on Hannover Messe Industry: The Top Three Challenges for Enterprises

If anyone asked you 5 years ago on which trade fair’s exhibitor list you can find SAP, IBM, Microsoft and Amazon, what would you have answered? Now, in 2017, the answer is pretty easy: Hannover Messe Industry. For 70 years, the Hannover Messe Industry has been providing a comprehensive overview of current trends and topics that affect industry executives worldwide. Therefore, it is great that the IT and software industry are meeting the manufacturing industry there, and have established dialogue to drive digital transformation forward.

Looking back, this dialogue started under the umbrella of Industry 4.0 at the 2011 Hannover Messe. First use cases back then were, say, improved sensors increasing energy consumption data that allows production executives to shift energy-intensive processes to the night hours when electricity costs are lower. The discussion evolved during recent years, and the focus shifted from small use cases to end-to-end scenarios embracing an enterprise’s internal as well as external processes. Furthermore, user experience and mobile access have also become hot topics.

But what challenges must the IT, software, and traditional industries now tackle? Here are my top three challenges derived from this year’s Hannover Messe Industry:

Modularization with Digital Twins

The era of inflexible bulk production is coming to an end since cost pressure, competition in time to market and demand for lot size one have skyrocketed. Modularization has been a perfect approach to keep up with the greater need for efficiency in production. With the creation of digital twins from physical assets, modularization is looking well poised to win on value. I am talking about virtual replicas of physical assets that exchange data continually in order to broaden flexibility and reach greater efficiency. Digital twins support enterprises to streamline, modelize, and monitor production processes. They are the basis for autonomous actions in production. The challenge now is how to implement a modular production design into a complete digital replica of all physical players. Is retrofitting older machines the key to success or should we rather invest in a Greenfield solution? Would a hybrid approach work out? Once these questions are clarified, my second perceived challenge comes into play.

Integration

A digitally connected collaboration of all entities of the value chain scales up efficiency and builds the ground for new services and capabilities. Yet this requires integrated end-to-end processes that exceed company’s borders. What sounds easy really ends up being a huge challenge. Historically, all entities have worked in their own enclaves and the external world (customer, supplier, business partner) was connected sequentially at the most. In order to keep up with modern-day customer expectations, a consistent process has to connect all players throughout the value chain. This could make feasible quick checks of customized product features, and result in a drastic drop in time to market. Collaboration with business partners for further innovations would also run more smoothly.

So, how do you go about driving change in the current market? That is a tough task which calls for buy-in from the executive level. One crucial component is working on a solution in teams across all entities. Think out of the box! Supplier, customer and business partners should be involved in this process, too. In the end, bringing people together is what integration is all about.

Security

Gartner (2015) says 20.8 billon things will be connected by 2020. Having so many things that are exchanging data, security is an issue that raises many questions. With respect to your business, how will you make sure that your connected systems, products, processes are safe? You should have an IT security strategy on board that includes your network, the APIs, encryption, and local requirements for data security.

As a next step, security analytics play an important role in continuously looking for blind spots or detecting hacker attacks as early as possible. As you can see, the issue of security is a highly versatile one that is undergoing constant change: you should keep it in mind at all times while engaging in digitization of any kind.

Exciting Digital Time

While visiting several stands, I recognized that software firms, such as SAP, are showing use cases with hardware solutions in place and vice versa, i.e. hardware firms, like Siemens, are showcasing software applications which add value to their systems. This latest advancement in hardware/software integration drives innovation forward. It is exciting to see how successfully and quickly the digital transformation is developing. It certainly makes me happy to be part of the digital age. All the applications and demo cases I experienced at the Hannover Messe Industry have left me inspired. Nevertheless, the tremendous speed of innovation poses new challenges we must be prepared for, so that we do not feel overwhelmed. How do you climb a mountain? One step at a time!

References

Van der Meulen, Rob. “Gartner Says 6.4 Billion Connected “Things” Will Be in Use in 2016, Up 30 Percent From 2015.” Gartner, http://www.gartner.com/newsroom/id/3165317. Accessed 26 April 2017.