A featured contribution from Leadership Perspectives: a curated forum reserved for leaders nominated by our subscribers and vetted by the Construction Tech Review Advisory Board.
SUEZ Water Technologies & Solutions
Leveraging Data to Unlock New Business Opportunities
Carlos Sanchez
Data science, however, is having a remarkable effect in less heralded sectors of the economy, namely, industrial controls. Remote monitoring, initially developed to reduce the burden of tracking hard to access assets, has generated mountains of data. Now, companies are beginning to leverage that data to not only uncover new efficiencies, but to create new business models.
Remote monitoring and data analytics are enabling a future in which vendors are becoming deeply enmeshed in the operations of their customers; one in which remote monitoring systems generate data for predictive purposes, rather than reactive ones.
Vendors with an appetite for risk
Imagine a series of pumps that sit in a manufacturer’s critical path. While the pumps aren’t the most glamorous assets on the manufacturer’s line, if they fail, operations stop.
Traditionally, the manufacturer would adhere to a routine maintenance schedule, replacing the pumps according to the maker’s specifications and the experience of industry veterans. That schedule might work most of the time, until an anomaly in the system causes a premature failure.
Now imagine those pumps are attached to remote monitoring systems that continuously collect performance data. The monitoring system could detect signs of premature deterioration, or conditions under which failure might occur - such as a sudden change in the chemical composition of the fluids being pumped - and automatically trigger a request to purchase and replace the pump in the organization’s ERP system.
With enough data, the company that makes the monitoring system or the pumps might be able to guarantee continuous uptime, charging their client a regular monthly fee for maintenance, while accepting their client’s risk of potential downtime. When vendors accept this risk, they have strong incentives to perform well, as downtime would not only have an operational impact on the client, but could also cost the vendor a significant amount of money.
For clients, this shift in responsibility could also free up cash flow if they no longer need to keep an inventory of excess pumps. For plants that have hundreds of monitored assets (not an unlikely figure), the savings can be considerable, as is the business opportunity. It’s an arrangement that could benefit all involved.
Some stumbling blocks
Alongside the promise of remote monitoring and data analytics are serious challenges, many of which present business opportunities in their own right.
For one thing, remote monitoring precedes data analytics by years. Few could predict just how valuable data would become. As a result, an inordinate amount of time has been spent cleaning and structuring the backlog of data for analysis.
Remote monitoring and data analytics are enabling a future in which vendors are becoming deeply enmeshed in the operations of their customers; one in which remote monitoring systems generate data for predictive purposes, rather than reactive ones
The opposite problem is often seen by many startups. They have the tools to analyze the data, but they don’t have the field experience and data sets to train their analysis.
At the same time, the sheer number and diversity of systems being monitored could easily overwhelm many plant operators. Many plant operators might think “great, you can monitor my pumps. What about my thermostats, coolers, centrifuges, and all the other things I have data tags for?” There’s a huge appetite for dashboards and application programming interfaces that can take all the data and put it in one place.
Additionally, there are cultural issues: entrenched constituencies that resist the change and potential benefits data analysis can bring because of the way they’ve traditionally operated.
The industry should be prepared for an influx of technology companies to address these issues, many of which have common resolutions. For example, some companies might acquire startups in the analytics fields, breathing new life into older organizations unaccustomed to data collection. Business opportunities abound.
Security and privacy on a global scale
Security is also a rising challenge. It’s wasn’t traditionally a focus of operating technology, but as more and more devices are connected to critical infrastructure, these systems have become targets of financially motivated hackers. In the event of major conflicts, many security experts predict industrial controls will be on the frontline of hostilities. The change in security consideration has required companies to harden their hardware as well as software. Firms are constantly running penetration tests to ensure devices and data are secured.
Privacy concerns are closely related to security issues and can be fairly complex. Different countries have competing privacy and data export regulations. The data export regulations could be tied to consumer privacy and state security rationales that may require separate systems for different jurisdictions.
Large, global companies are already confronting these security and privacy concerns with redundant systems and software programming that puts security at the forefront, but these waters will be tricky to navigate.
A revolution behind the scenes
If you’ve been paying attention to the way data has revolutionized business, you are probably familiar with the famous story of the retailer that was able to predict a woman’s pregnancy and capture her loyalty at the precise moment when her habits and lifestyle were changing.
The data revolution in industrial controls and remote monitoring promises no less. It’s driving a fundamental change in the relationship between vendors and customers, and is presenting massive opportunities for companies.
This revolution will largely take place behind the scenes. Process innovation and industrial controls are often unglamorous work. Nonetheless, the results and rewards for companies that get it right are going to be massive.
The articles from these contributors are based on their personal expertise and viewpoints, and do not necessarily reflect the opinions of their employers or affiliated organizations.
