Creative Destruction with IIoT: A roadmap for industrial Digital Transformation

By José A. Gutierrez, Director of Technology and Innovation, Transocean

José A. Gutierrez, Director of Technology and Innovation, Transocean

Sometimes innovation requires new technologies that enable a novel product offering or expand on an existing one. However, for the most part innovation is about bringing a new thinking, a new twist, a new angle, and for the most successful ones, a new paradigm shift.

Technology plays a fundamental role in the innovation process however one should not confuse new technology with innovation. Innovation is about delivering new value through product or service offering. In many cases this value delivery is enabled by technology—new or old, from adjacent spaces or not.

There are many ways to deliver innovation that ranges from incremental improvement in one extreme to Schumpeter’s “creative destruction” in the other.

Here is the challenge, how much efficient can we make a 98 percent efficient power supply? A 30 percent improvement (a breakthrough) would move it to 98.6 percent! Of course, a good innovative team will think out of the box and make a new power supply that removes old attached cables and proprietary connectors, and leverages integrated circuit miniaturization and integration to invent a new USB power supply. Voila! New value has been created (while still having a 98 percent power supply). Better yet, let’s eliminate them and use wireless power coupling chargers (90 percent efficient or less!).

Industrial Internet of Things (IIoT) has existed with different names from the last 30 years. At first its implementation took the shape of bulky, complex, proprietary, and very expensive SCADA systems. To a world today where computing can be bought on demand, memory is very low cost and abundant, and analytics is available in all flavors. Better yet, a new generation of skilled mathematicians and statisticians are attracted to the industrial space - the new sexy title of “Data Scientist” helps!

IIoT has democratized the industrial space. It is lowering the barrier to entry from many adjacent spaces into the highly regulated, safety sensitive and capital-intensive world. IIoT enable the use of inexpensive sensors – in many cases throughway – to create a fabric of information around a product plant, or service. This information in turn is processed to observe and correct inefficiencies, design new processes, interact with customers, empower the workforce, but the most transformative aspect is in the creation if novel business models never seemed before in the industrial.

"IIoT enable the use of inexpensive sensors – in many cases throughway – to create a fabric of information around a product, plant, or service"

IIoT technology also crosses many business boundaries. The first is through the marketing department on the potential to transform the customer experience. Increasing customer understanding through the use of the product or service and adapting in very short time to changing needs is a major business disruptor. The second business boundary is on the operational office. This is probably the best IIoT application advertised today with its emphasis on improving operational processes, through efficiency and increased safety. Here the major initiatives are around process digitalization, worked enablement (Augmented reality anyone?) and performance management. The third and perhaps the most transformative is through new digital business models, covering strategies like existing business model augmentation to completely new business model delivery.

This tectonic shift in the industry comes with many challenges. Creating the “Uber of Process Controls” seems easy but carrying safety integrity liabilities and ensuring a reliable process requires deep thinking. Putting an IT layer on latency sensitive processes is a major challenge – the IT infrastructure was designed for high scalability and reliability through a level of redundancy not existing on a typical plant. In addition a major challenge of any IIoT proof of concept faces is data quality. Studies have shown that the task of data cleansing can take 80 percent of the time of any IIoT deployment. Moreover, the multiplicity of IIoT analytical platforms is becoming very crowded and confusing. Model-based? Artificial Intelligence? Statistical methods? Plus interesting offerings also make this journey entertaining and sometimes scary. Have you heard the pitch “Give me your data and I will solve your problems”?

These and many other challenges exist in the digital transformation world but let’s go back to innovation. What is driving us to make such transformation? What is the opportunity? It is certainly not mining your data to discover new value – if this is the motivation one should have started many years ago (many companies in fact started quite a while ago) or your competitors would be eating your market share. It is also not about “digitalization” – most data in business ecosystem has been digital for many years, of course grouped in silos, unstructured and in its own language.

The driver should be about to delivering existing or new business strategy (the “What”) using a new highly available IIoT infrastructure (the “How”). This effort is about unleashing value leveraged by your own business ecosystem and enabled by the highly available IIoT technology – before your competitor does. The milestone of the roadmap is the flawless execution of your own business strategy. IIoT is just an enabler. This is the journey of creative destruction or as defined in the 21st century: “Digital Transformation.”

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