We partnered with Frost and Sullivan to poll senior executives in Asia-Pacific (from organizations with global revenues ranging from USD 10 million to over USD 10 billion) across the oil & gas, architecture, engineering & construction (AEC), as well as energy and utilities sectors.
It was our intention to understand the impact of COVID-19 on their business and digital adoption in their respective industries during and post-pandemic. The research found that a high proportion of executives revisited their technology road map during the pandemic. A majority adopted digital solutions for optimizing processes and accelerated the digitalization of their customer- and supply-chain interactions by a staggering three to four years.
The share of digital or digitally-enabled products in their portfolios increased twofold. One visible manifestation of this pivot has been in creating collaborative environments for working.
I spoke to senior executives in the region to compare their experiences and insights on these trends. The following are some of the points that have been mentioned in our discussions.
When everyone is going digital, strategy will be the differentiator.
The Frost and Sullivan report found that only 12% of respondents wanted to take a holistic approach to digital transformation and take this to enterprise-wide levels.
Based on my conversations with senior executives, it was clear that the immediate priority was to reduce operating expenses and optimize operations using digital tools. However, given that digital transformation has both short- and long-term impacts, a blinkered focus on reducing operating costs can impede the overall benefits of digital transformation and, consequently, weaken the effort invested in its successful implementation.
Therefore, to scale digital programs beyond current pilot programs, businesses must put digital at the heart of strategy. This includes the selection of more suitable digital transformation partners who can offer scalability to support the accelerated growth of your business and flexibility to enable you to capitalize on market and industry insights, achieving the short-term outcomes on the way to an enterprise-wide transformation to long-term benefits.
Cybersecurity Risks are Real.
A second interesting point that was revealed in the Frost and Sullivan report was that cybersecurity measures were not at the top of their digitalization pre-requisites. Although it may seem unsurprising given the fact that most businesses were focused on cost cutting and operational efficiency measures, it is certainly, alarming.
Especially since in the wake of the pandemic, the global workplace paradigm shifted to a remote workforce within weeks or, for some, days. One senior executive I spoke to mentioned having to setup 600 VPN connections to allow employees to work from home as one of the hardest things his company has ever had to do. At the same time, another mentioned that ransomware attacks cost them dearly in terms of money and effort as well as time spent on recovery.
Evidently, “good enough” security solutions left some businesses with a lack of visibility across corporate and personal devices and preliminary incident response plans in the event of a breach.
While traditional IT cybersecurity practices are a necessary part of a comprehensive cybersecurity program, far too many industrial organizations continue to focus cybersecurity efforts on IT-centric – rather than production-centric – endpoints, i.e. operational technology (OT). They also continue to rely on manual, error-prone email- and spreadsheet-based vulnerability management processes, leaving facilities exposed to unacceptable production safety and reliability risks.
Our understanding of the need for greater cybersecurity in the new normal was a significant factor in the acquisition of PAS Global. The combination of our solutions now allows us to offer our clients a much-needed security boost to large-scale and critical infrastructure. For more information on how our products work hand-in-hand with theirs, read Driving Innovation in Operational Technology without Compromising Cybersecurity.
The Clarion Call for Sustainability
22% of the survey respondents considered uncertainty in market demand as a critical challenge in the post-COVID-19 era. Our customers have mentioned that these days, they’re looking at sustainability initiatives as a point of difference to give them a competitive advantage in the marketplace.
An Ipsos survey for the World Economic Forum found that 71% of people agree that businesses whose activities use scarce natural resources should pay additional taxes, even if that increases the price of goods and services. 85% of adults across 28 countries said they want to see “information on the use of scarce natural resources” available on product labelling. In fact, I believe that customers in the future will go a step further and expect carbon ratings on all products, not just products that use natural resources.
This change in customer preference is shifting industries toward decarbonized and digitalized solutions that grant high production levels at low energy costs. While these goals may seem contradictory, an essential aspect of their achievability is preventive as well as predictive maintenance of assets. Besides helping avoid unnecessary cost and downtime by monitoring the ongoing state of an asset, it expands an asset’s lifetime, resulting in less input and less waste.
The added sustainability benefit of predictive maintenance lies in the process innovation it offers. Historical maintenance data can be utilized to identify which unit consumes more energy or which one produces more emissions and predicting timelines when units would become inefficient and fail, thus offering operations and maintenance teams a chance to resolve issues and maintain optimal asset performance as well as simultaneously increase a facility’s environmental performance.
Real Success Requires Long-Term Thinking.
Looking ahead, part of the great reset in the new normal will require companies to act now to transform their businesses and successfully differentiate themselves from the competition. The future of industry demands that over the medium- to long-term, companies align more closely with their extended ecosystem of clients, expert vendors, partners, peers and consultants to devise plans and strategies to future-proof their organisations or risk the consequences.
Download the Hexagon + Frost and Sullivan report Accelerating Digital Transformation in the New Normal for more insights from APAC’s top executives.