Craig Hayman, CEO of industrial software company Aveva, kicked off the Aveva World digital conference noting analyst estimates that at least two years’ worth of transformation has been compressed into about 10 weeks of time as a result of COVID-19. He added these analysts predict that the current work-from-home trend will be permanent for up to half of the workforce for at least for the rest of 2020.
That’s why “the power of technology to unify data and remove [operational] silos has never been more important,” Hayman said. These technological capabilities are “allowing specialists to collaborate to change business models, because unified data helps them see opportunities more clearly to boost efficiency and optimize operations.” This kind of thinking is increasingly being led by global teams across industries—all connected through technology, he added.
Looking across Aveva’s range of customers, Hayman noted that some are under huge pressure to reduce costs and maximize capex as a result of COVID-19, while others are seeing demand for products higher than they’ve ever been. “Consumer demands have shifted and people are not spending as much on discretionary purchases like fashion and travel; they’re focused on the necessities of life. There's been a huge rise in purchases of groceries in the U.S., and pharmaceutical sales increased by more than 50% compared to pre-crisis levels.”
In response, there will be an “increasing focus on empowering the connected workforce” across industries through the use of technologies such as cloud computing and industrial IoT, Big Data, and artificial intelligence, said Hapreet Gulati, head of Aveva’s operations business unit. He added that these technologies are becoming increasingly mainstream and will form the foundation for the enterprise agility required to tackle the current market challenges which are accelerating the pace of digital transformation.
“The COVID-19 crisis is providing a glimpse into a future world in which digital has become central to every interaction,” he said.
The stakes are high at the digital crossroads where manufacturing now finds itself. The digital transformation of the manufacturing value chain represents an opportunity to reduce waste and costs by 5% to 30%, as well as grow revenues by up to 25%, said Gulati. “Manufacturing must become more agile to accommodate the increasing demand for product and packaging changes.” As evidence of this, Gulati pointed to data showing the rate of new products introduced in the U.S. jumped 50% from 2000 to 2017. Such rapid changes are compounded by a need for manufacturers to minimize waste. As an example, Gulati noted that U.S. food manufacturers waste approximately 15,000,000 pounds of food for every billion in sales.
Three stages of transformation
Assessing China’s rebound after its initial COVID-19 wave, Hayman noted that Chinese commuter traffic is back to 75% of 2019 levels from a trough of 62% in February. Energy use is also increasing in China, with power consumption ramping back up to 40% of 2019 levels and rising, he said. “As lockdowns are lifted in the United States and Europe, we expect to see similar patterns in other economies as industries continue to minimize capex in the short term and drive efficiencies throughout their operational processes.”
This focus on improving efficiencies in operations is seen as a potential boost to digitization efforts to help companies pinpoint the available opportunities and take advantage of the situation as the peak of the first wave of the virus passes. “There's also an increased awareness of and focus on sustainability, which we at Aveva are excited about,” said Hayman. “We see this as a huge opportunity for industries to embrace new ways of working and drive growth.”
Hayman sees the digitization of business taking place in three stages:
- Unifying the data and information across operations to link asset strategies with business objectives. “This lets you better balance the cost of risk with asset performance management,” he said;
- With operational data in one place, artificial intelligence and machine learning can be used to drive efficiencies and deploy teams and resources across the asset lifecycle;
- With access to trusted information, companies can work more efficiently and draw insights that span entire engineering operations and performance processes.
The scalability provided by cloud-based software is key to unifying all of your data and all of your analytics into one place to make them available to your entire team wherever they are in the world, said Hayman. Cloud gives you the scale and capability to amplify your team by adopting “a learning mindset [that is] constantly evolving and improving,” he said. “Part of it is about accelerating new digital ways of collaborating and operating while taking advantage of the constantly evolving capabilities that software infused with artificial intelligence can offer.”
Explaining how Aveva is not only providing such technologies, but using them to create the software products that enable companies to do this, Hayman said there are “150 Aveva software development scrum teams around the world, with eight to 12 people on each team. These teams conduct development sprints—which are prioritized every 90 days—around what we learn every day” about how business is changing.