Siemens PLM recently held their Industry Analyst Conference in Boston. Check out this article about the conference’s theme of digitalization.
By: Lee Kok Leong, editor for Control Engineering Asia, reporting from Boston where Siemens PLM held its annual industry analyst conference.
This year’s theme centered on digitalization and in Chuck Grindstaff’s keynote speech, he emphasized the point that digitalization changes everything everywhere. Grindstaff, Siemens PLM’s president and CEO, said that digitalization is driving new business and operating models, and businesses risk being redundant if they do not embrace the disruptive technology. This is an annual event where the senior management of Siemens PLM shares latest happenings with the industry’s leading analysts and journalists.
Chuck Grindstaff, president and CEO of Siemens PLM Software, welcomes the guests in Boston.
The increasingly fast speed of technological advances is pushing digital transformation. As technological advances are getting more prevalent, the costs of key technologies are falling. Cases in point – 3D printing in 2007 cost US$40,000 but in 2014, it cost just US$100; industrial robots in 2007 cost US$550,000 but in 2014 cost only US$20,000. Although this trend sounds idealistic, it is actually a double-edged sword, as we shall see in a moment.
According to a study in March 2016 by John Chamber, McKinsey & Company, more than 50 percent of companies that attempted to move to a digital model failed. And one of the reasons for the failure is that although advanced technologies are available at a relatively inexpensive price, these companies failed to utilize the technologies strategically.
Digitalization should be central to the corporate strategy and it should integrate horizontally with other functions and avoid the dangers of silo technologies. Going digital should not be perceived as a back-office strategy that is aimed purely at operational efficiency. As such, because of all the pitfalls, in a live poll during the presentation, analysts and journalists opined that around 40 percent of today’s Fortune 500 companies could vanish within a decade because of digital Darwinism.
So, the important question is what can companies do to increase their chance of survival and indeed to thrive in this digital era? Grindstaff answered this question by saying that businesses should become digital enterprises through leveraging digitalization to gain a sustainable competitive edge. A digital enterprise is a company that integrates, digitally of course, all data, processes and people so that it productively designs and manufactures value-added products and solutions that are valued by customers.
Fundamentally, digital enterprises are economically sustainable and more efficient than others. Innovation cycles and time to market are shortened drastically as staff and partners can collaborate seamlessly in real-time. Grindstaff emphasized that companies, in embracing digitalization, must rethink every element of their businesses, understand the value digitalization brings and prioritize by finding out which areas give the greatest returns by going digital. Only then should they embark on the digital journey.