Digital Transformation in practice: What does it mean for today’s industrial leaders?
Note: this is part two of a two-part blog series. Read part one here: Collaboration, agility, talent: How digital innovation is redefining roles in today’s industrial operations
To maximize growth, and profitability, executives must pinpoint the value drivers of their individual business and apply creative business models to realize the results. An interesting example of this is Barghest Building Performance (BBP), a leading regional energy efficiency technology provider based in Singapore.
BBP achieved outstanding growth by committing to help building owners, mall managers and factories across Asia Pacific to reach their energy efficiency goals through innovative technology solution and attractive financing solution.
The building’s data is piped live into BBP’s unified control center, where it is compared against regional and global best practice, and performance is optimized by the BBP team. This has seen a fundamental shift in BPP’s business model: now, without spending on any additional equipment, BBP deployed its patented algorithms that continuously monitor changes in the internal and external conditions and adjust the equipment in real-time. BBP’s advanced analytics further enhance the algorithm over time, resulting in unprecedented savings for the clients’ energy consumption with no operational risk. Only once the customer sees measurable value does BPP draw a profit.
BBP offers its service as a fully-funded solution, without any upfront cost to the customers, and is paid via a portion of the savings achieved for the client. Not only does this model require different workforce skills – to pitch the solution, build the trusted relationship, and to drive and present the analytical results in a compelling fashion – it also demands entirely different funding models. Transformation of this kind is a complex challenge for industrial executives to activate but the financial rewards can be immense, if it is done correctly.
Accenture’s study digs deeper into this idea of changing financial models, by showing how established business planning based entirely on increasing market share is no longer valid for digitally transformed industry. As demonstrated by BBP, implementation has jumped ahead of profitability. When operational efficiency comes before profit, individual project economics are more important to business growth than scale.
The most crucial value driver is the need to empower your team to capture value and identify growth in this new operating context. As Ayesha Khanna, AI expert and our keynote at this year’s AVEVA World Summit says, “You need the skills to connect the dots, look at a problem and the solution. The glue between them is technology.”
This ability to blend transformative tech – AI’s ability to pinpoint value and transform a business model to support it – combined with human insight, will be the key differentiator for tomorrow’s industrial success.
The key phrase here is human insight. Technology by itself is just an enabler, so it’s easy to see why McKinsey cites finding digitally literate, talented people as the number one success factor for digital transformation. Accenture’s study similarly concludes that fostering agile thinking and innovation, working closely with partners and using competitive insight is key harnessing the power of technology to secure your business’s, and society’s advantage.
At AVEVA, we are fortunate to work with companies who are driving this kind of innovation, and we learn from them every day. We are also fortunate enough to be able to share those insights with you this September at the AVEVA World Summit:
Hear BBP’s story in their CEO’s own words and discover more about AVEVA’s pioneering research into digital transformation at the AVEVA World Summit 2019 in Singapore this September.
Rob McGreevy is the Head of Corporate Strategy.