Annette Thomas, associate lecturer in Petroleum Data Management at RGU, writes about the Fourth Industrial Revolution and digital transformation.
I think it is time we stopped talking about Industry 4.0, the Fourth Industrial Revolution and digital transformation as if they are in the future …they are here already.
Similarly, we need to understand that digital transformation is as much about organisations and people as it is about IT and analytics. This understanding will not happen if the term “industrial revolution” continues to be thrown around without referencing, as with any revolution, the inevitable cultural and societal changes it will bring about. For this reason, human investment will have to keep pace with technology if this revolution is to fulfill its potential.
According to McKinsey (2018), 375 million people worldwide will have to switch occupation categories by 2030. This is not just a scale for new technologies; this is a scale for new business models, cultures and benchmarks. Seemingly, this is indeed a revolution.
The World Economic Forum (WEF) has shown that when compared with previous industrial revolutions, this one is evolving at an exponential rather than a linear pace. The breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. Therefore, business and education must work together to co-design, staff and empower this revolution, making the most of the opportunities digital transformation can have for output and productivity.
Whilst there is an emerging consensus that digital transformation and the associated technological re-organisation of processes and procedures will alter the way things are done and by whom, I’m not convinced that either the speed or the scale of the impact of these changes is being fully embraced. Some companies are making real progress; some are struggling with the basics and some appear to flip flop between being overwhelmed and questioning the “hype” around the potential problem and ultimately the return of investment on data initiatives.
Organisations working from the premise that the fundamental objective in collecting, analysing, and deploying data is to make better decisions will be much better equipped to understand and communicate to their employees, stakeholders and investors what advantage, improvement or benefit the organsation will be delivered by their data strategy. So for example volume, simply having huge quantities of data in a data lake, is not a viable data strategy. There is no shortage of data, and there is even more coming in, what people need to see and understand is how, for example, data analytics can help make better decisions more often. Ultimately it is not about the data itself so much as what it can do.
So what can business and organisations do to accelerate the pace at which they build their digital capacity? A solid first step will require “digital immigrants” like me and many of my colleagues in leadership positions to recognise that we need to not only learn the basic vocabulary of this new world such as; big data, machine learning and predicative analytics, but also to drive the behaviours and cultural change that are needed to make the most of this new reality. Simply hiring millennials who are understood to be “digital natives” is not going to provide the solution. Organisations need to understand the changing needs of their business and the changing skills required to make it successful. They should support their existing people to reskill or upskill as required, whilst also bringing in new staff with complementary skill sets in emerging disciplines and technologies.
What must be stressed however is that simply having the technology and a cohort of specialists to use it is not enough. We know from the litany of unsuccessful IT introductions that a key success factor in any programme of change is the engagement and adoption by the wider business. A critical thing to avoid when trying to build capacity is creating an “us” and “them” culture where digital transformation is considered to be the responsibility of a cohort of specialists or a particular project team. It is much easier, if things go wrong or are taking too much time, to blame people or teams that you don’t belong to. At the same time whilst “digital immigrants” may not have highly developed digital skills often they will have lots of experience and knowledge to contribute to successful implementation. In practical terms to achieve buy in from the business requires people who can bridge both worlds, data science and operations and, commonly, digital natives are not best suited to this role.
Additionally within education care needs to be taken that too great an emphasis is put on technology such that we risk producing graduates who can programme and analyse but with the assumption that their colleagues and customers will simply fall in line with whatever change they are proposing. The final step of technological achievement is often a social one.
So as a result of listening to students’ experiences, participating in industry sessions and reading government agencies’ reports I have come to the conclusion that the bottom line for organisations is that they must accelerate the pace of development of their digital capability. Not to do so risks Revolution 4.0 producing more threats than opportunities.
As a matter of urgency organisations need to invest in technology and specialist skills but be equally committed to engaging and enabling the whole organisation. It is not possible to import or impose a digital culture nor can it be left to an “expert few”. The requirement is to develop data cultures within organisations that go beyond specialists and experts so that everyone experiences data supporting business operations instead of the other way around.