This would have been the October article from Rajabahadur V. Arcot
The Battle for OT / IT dominance
By Rajabahadur V. Arcot
The future holds the promise of the dawn of a new industrial era and the convergence of Operational Technology and Information Technology will hugely impact manufacturing companies. In order to differentiate the existing from the emerging systems & solutions and to highlight the importance of OT and IT convergence, new acronyms are getting coined. What we call as automation systems, DCS, PLC, SCADA and such others and enterprise solutions which include ERP, SCM, CRM, EAM and similar others are labeled respectively as Operational Technology (OT) & Information Technology (IT). According to numerous survey reports that appear periodically, many of the manufacturing companies are looking forward to benefit for OT / IT convergence and are highly optimistic that it will make them truly real-time information driven organizations and secure their future in the emerging industrial era- Industry 4.0.
Production and business operations of manufacturing companies have always been driven by information both from the shop-floor and top-floor. Initially, they deployed instruments to generate shop-floor information and top-floor transactional information was mostly generated offline. Manufacturing companies’ ability to create value to their shareholders, while ensuring customer satisfaction in the emerging era of manufacturing, depends on their ability to tightly couple the operations of all their value chain partners comprising of numerous part / sub-assembly / raw material suppliers, design associates, service providers and such others. It will become extremely important for them to ensure that, on one hand, all their production and business decisions are based on holistic and integrated real-time information and, on the other that they work collaboratively.
The fact that manufacturing operations have become more complex & competitive pressures have increased and the realization that their success depends entirely on becoming truly information driven, make industrial firms demand not only real-time data from the production and business operations, suppliers, customers, and such others, but also want them integrated and analyzed so as to derive holistic information. The recent rapid technological developments such as those relating to internet of things, artificial intelligence, machine learning, big data analytics, cloud computing, & Internet Protocol version 6 (IPv6), and OT & IT convergence, make it possible for multiple sources of data to be connected and large amount of data from them to be collected and analyzed holistically on a common platform.
Until now, manufacturing companies invested in OT to manage production floor operations while ensuring plant’s safe, efficient, and automated functioning and IT comprising of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), Supplier Relationship Management (SRM), Product Design Management (PDM), Manufacturing Execution Systems (MES), and such others to assist enterprise level decision making. Often automation systems and enterprise solutions are procured from best-of-the-class suppliers and their integration required significant investments in terms of costs and time.
Information collection & their display and control of important production operations became integral part of manufacturing companies many decades ago. Suppliers of automation systems, such as Honeywell, Yokogawa, and Rockwell, realizing the power of computer and communication technologies, as they evolved, in data collection, transmission, and processing capabilities responded to the needs of the manufacturing industries and introduced of programmable logic controllers, distributed control systems, safety instrumented systems, electronic transmitters, and similar others that extensively rely on computer and communication technologies. Later they developed communication protocols that further enhanced the role of automation systems. Some of the leading suppliers of enterprise solutions are SAP, Oracle, and IBM and they also leveraged the power of computer and communication technologies.
Automation systems and enterprise solutions evolved separately at different points of time and respectively addressed the informational needs of plant floor and top floor. The business models of the suppliers of automation systems and enterprise solutions differ significantly and their offerings are designed and engineered to meet different functional and operational needs. Even the way automation systems and enterprise solutions are specified, budgeted, and procured differ fundamentally. While, in the case of OT their safe operation and availability are most important, in the case of IT data confidentiality is more important than system availability.
A new breed of companies, such as Apple, Microsoft, Alphabet, IBM, and Cisco Systems, which in recent years have emerged as the leading technology firms of the world, have strong competencies in technologies associated with Internet of Things, artificial intelligence, machine learning, big data analytics, and cloud computing. Seeing tremendous growth and monetization opportunities, leading technology firms are making large investments and establishing new centers of excellence to develop and demonstrate their competencies. They are emerging as strong challengers to the traditional OT and IT suppliers and often are seen taking initiatives to emerge as dominant players the in OT / IT domain. They have already started offering OT/IT platforms / infrastructure such as Azure (Microsoft), Watson (IBM), Alexa (Amazon), DeepMind (Alphabet), and such others.
Who will succeed and emerge as leading suppliers, what will the architecture of their offerings and the open standards they will follow are questions that await answers. May be, mega mergers and acquisitions are the way-out and probably are in the making; or we may have to watch for the success of collaboration agreements, such as the one between ABB and IBM. Yet another way out may be for the push to come from the end users. One such example is the ExxonMobil Research and Engineering Company’s forward looking initiative. It has entered into an agreement with Lockheed Martin to serve as a system integrator in the early stage development of new architecture for the next-generation open and secure automation systems for process industries. They intend sharing the details of the new architecture resulting from their efforts with OT players. Interesting developments and mind games are on and it is difficult to predict how it will play out and who will emerge winners.
Rajabahadur V. Arcot is an Independent Industry Analyst / Columnist and Business Consultant with around 40 years of senior managerial experience. He has held C-level executive positions in leading companies, such as Honeywell, Thermax, Bells Controls an affiliate of Foxboro / Invensys, Electronics Corporation of India Limited and Instrumentation Limited. Until recently, he was responsible for ARC Advisory Group’s business operations in India. He writes industry and technology trend articles, market research reports, case studies, white papers, and automation & manufacturing IT insights. He is the representative in India for Spitzer and Boyes LLC.
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