In manufacturing and construction, the race to Industry 4.0 will decide the winners – and losers – in the battle to remain relevant. Successful digital transformation will pivot on an organisation’s ability to adopt digitisation to drive the development of smart factories and smart buildings.

Key to this evolution is data. In manufacturing, smart sensors that can communicate over the internet in an Industrial Internet of Things (IIoT) mean more data is being made available to organisations than ever before. The potential benefits are multiple, ranging from product development to production cost reduction.

The ability to deploy small intelligent sensors across a fully distributed network gives organisations the capacity to gain insight and control at all points of a production or construction process. Solutions can be designed that reduce the need for working capital, improve materials scheduling, and boost productivity across one part of the system or overall.

The IIoT can enable data capture throughout the production process and out in the field with intelligent sensors working alongside SCADA control systems. At a basic level this enables faster more accurate detection of faults at an affordable cost. Predictive analytics can be used to reduce maintenance costs and unplanned outages.

Today’s workforce is often more flexible or mobile which means that systems and processes that collect and transmit data quickly to head office can help organisations match building capacity to occupancy, reducing overheads and increasing efficiencies, ultimately benefiting the bottom line.

Meanwhile, the rise of application programming interfaces (APIs) allows integration not just with internal departments, but with supply chain partners and customers.

Overall, we’re talking about the next move after ‘just-in-time’ production, and it’s happening in a world where end users expect increasing levels of product customisation and frequent innovation, based partly on their experience as consumers. There’s an ongoing acceleration in product lifecycle expectations, which manufacturing and construction organisations must meet if they are to stay relevant.

Manufacturers grappling with the issue generally fall into two camps. There are those that have run headlong into filling up their data lakes and deploying teams of data scientists and visualisation tools. Some appear to be earning a return on this investment, but many are still unsure how to deploy these resources effectively.

IT leaders may appear to feel they should be doing something – anything – to take charge, or at least get ready for the predicted rise in business demand. Others may remain sceptical – having heard similar “build it and they will come” arguments before with a concomitant lack of results. In addition, many companies continue to experience financial constraints – encouraging caution and a clear business case before investing takes place.

No matter which camp an organisation falls into, building solid foundations can reap rewards. A holistic approach is necessary, from design, through execution, and into the life of the products or facilities created.

There are, however, challenges in getting all that data into a usable form, turning it into information, and contextualising it. In our CIO and IT leadership survey for 2020, IT leaders cited many obstacles to maximising their use of data, including scale and complexity of data sets, governance and ownership, the lack of a data operating model, regulatory compliance, and difficulties in integrating new technologies.

Sixteen percent of respondents also stated that a lack of expertise and skills is a major obstacle – even though companies are moving to invest in foundational skills, bring skills in-house and introduce new roles.

Yet all this takes time. Foundations will need to be laid with care, and if the right investments aren’t made, organisations will continue to struggle to exploit that expensively obtained data, let alone prepare with a view to the future adoption of even more advanced technologies: from 3D printing to machine learning, augmented reality, virtual reality or AI.

This suggests that many may benefit from the help of an external party or consultant. External specialists are already helping many manufacturers identify the technology choices that are right for them, and offer the greatest ROI.

Externals can also help organisations achieve a back-to-basics focus on cost optimisation, operating-model effectiveness and good sourcing that can free up resources to deliver transformation.

For example, we helped a global manufacturing, technology and services focused customer develop a new target operating model, alongside their IT leadership team, that will ultimately set them up for advanced capabilities around analytics and robotics, all the way to AI and business integration. The results not only boosted service and supplier management, project management and enterprise architecture controls on external spend but reduced redundancies and associated costs.

Get the data management and data strategy right, then start by designing and deploying the projects that might be more limited in scope but are most likely to benefit the organisation in a clear, tangible way. These then can provide a foothold, from which the company can begin to scale up its approach and look to the fourth industrial revolution with well-founded confidence.