A recent study by PricewaterhouseCoopers (PwC) states that over 27 percent of the industrial companies rate their level of digitisation as high, and this value is expected to grow to 65 percent in the next five years in India. The study, which was release on Thursday, says globally this number is expected to increase to 72 percent from 33 percent in the same period.
‘Digital is now a priority for most CEOs of industrial companies in India,’ according to the study. Fifty-three percent of the industrial companies in India are using data analytics and more than 90 percent expect data to have a significant impact on their decision-making in five years. Additionally, industrial leaders are digitising essential functions within their internal vertical operations processes and are focussed on driving both revenue growth and operational efficiencies. Thirty-nine percent of the companies plan to invest more than 8 percent of their annual revenues in digital programmes in the next five years.
An advantage for industrial companies in India and Asia-Pacific is that they can leapfrog ahead of those in the developed economies, given their greenfield starting positions, the report states; consequently resulting in fewer legacy issues pertaining to outdated systems, processes and technological capabilities.
“For an emerging economy like ours with a very strong focus on the growth agenda, it is only natural that Industrial Products sector will leverage the technological breakthroughs for building its digital ecosystem,” says Sudipta Ghosh, leader – data and analytics, PwC India. She adds that this will enable them to add significant value to their customers by knowing how the product is being used and will also drive efficiency improvements across the value chain.
However, only 17 percent of the respondents in India rated their maturity in data analytics as advanced while 62 percent rated it as medium.
The report suggests that in order for industrial companies to leverage the full value of Industry 4.0, they need to overcome key challenges which include lack of a clear digital operations vision from the leadership (45 percent), lack of skills in data analytics capabilities (53 percent) and fostering a strong digital culture (41 percent). Another concern is operational disruption from cyber security breaches. Overcoming these challenges will enable them to reach their potential and objectives of digitisation by 2020.
Three major drivers for Industry 4.0 are:
- Digitisation and integration of vertical and horizontal value chains
Industry 4.0 digitises and integrates processes vertically across the entire organisation—from product development and purchasing to manufacturing, logistics and service. All data about operations, processes, process efficiency and quality management, as well as operations planning, are available in real time, supported by augmented reality and optimised in an integrated network.
- Digitisation of product and service offerings
Digitisation of products includes the expansion of existing products, for example, by smart sensors or communication devices combined with data analytics, as well as the creation of new digitised products which focus on complete integrated solutions.
- Digital business models and customer access
Beyond providing digitally enhanced products, leading industrial companies expand their offering by providing disruptive digital solutions such as complete, data-driven services and integrated platform solutions.
At the end of this transformation process, the report states that successful industrial companies will become true digital enterprises, with physical products at the core, augmented by digital interfaces and data-based, innovative services. These developments will fundamentally change individual companies as well as transform market dynamics across a whole range of industries.
“Investing sooner and spreading out investments over time will enable companies to avoid huge capital investments later on,” says Bimal Tanna, leader – industrial products, PwC India.
Check out our Monsoon discounts on subscriptions, upto 50% off the website price, free digital access with print. Use coupon code : MON2022P for print and MON2022D for digital. Click here for details.