Some of the most dramatic instances of technological innovation have occurred in recent years beyond the view of the end consumer. On factory floors and within warehouse walls, Internet of Things-connected devices and artificial intelligence (AI)-powered machines continue to press the U.S. into the age of Industry 4.0.
The data these smart devices generate can be exceptionally valuable to the owners of these operations, with businesses in complex industrial industries seeking to unlock deeper insights to optimize performance.
But increasingly, these organizations are also finding it necessary to unlock data beyond the company itself, with opportunities to promote even greater efficiency in sharing information with business partners, suppliers, and customers.
There are opportunities here for industrial firms and their vendors to open up new revenue streams and strengthen financial positions, says Duncan Greatwood, CEO of blockchain cybersecurity firm Xage Security. But in order to capture that value, organizations must challenge long-standing reservations about data sharing.
A Data Rethink
For the businesses operating in complex industrial sectors, perhaps the biggest challenge in sharing data with suppliers is simply, “they’re just not used to doing it,” Greatwood told PYMNTS in a recent interview. “They’ve typically secured their systems by isolating them from the outside world, segmenting them. The amount of data flowing around a factory is vast. The amount of data flowing in and out may be very limited.”
But as these businesses move further to modernize and digitally transform their operations, breaking data free from those confines can be a way to strategically optimize the buyer-supplier relationship — so long as that information remains secure.
That means ensuring the owners of the machines and equipment generating valuable data remain in control of how and where that information is shared. Rather than aggregating this information into a single data pool, said Greatwood, technology today can provide control of data flows to prevent data breaches and other cybersecurity events, or data leaks with participants in the supply chain that should not have access to certain information.
Just as important as retaining control, however, is ensuring the authenticity and integrity of that data as well.
“Once you start making real-world decisions based on this data, then you have to know it’s for real,” he said, pointing to Xage’s recently-announced Dynamic Data Security offering which ensures end-users that information gathered from pieces of equipment like meters and other machines is not only accurate, but also hasn’t been tampered with.
New Revenue Streams
Sharing highly granular, deep data with suppliers offers a range of opportunities for optimization. Greatwood pointed to the ability for this information to optimize efficiencies within a factory by adjusting orders of certain products or materials from a supplier base, for example.
But these vendors, many of which can be small businesses, can benefit greatly, too. In one example, Greatwood explained that an oil refinery may base its supplier payments on materials provided. Oil refineries can optimize their orders, while vendors can optimize deliveries for heightened payments.
In another example, he pointed to the opportunity for this data to enable a supplier to optimize its product designs, again offering a mutually beneficial scenario for buyer and vendor.
There are also opportunities to open up entirely new revenue streams, he said. The granular data obtained from sophisticated machines like wind turbines, for instance, could be sold to wind farm owners interested in obtaining operational insights and applying it to their other wind farms. This has traditionally been difficult to achieve in markets with such complex value chains and data security concerns.
“If you can’t control the data, then you have a market failure where no one shares the data,” said Greatwood, “because no one knows what’s going to happen with it.”
Driving Digital Transformations
In today’s market climate of disruption, opening up a new revenue stream could support organizations’ efforts to remain financial viable during times of uncertainty.
But perhaps an even greater value proposition for these organizations today is in enabling the enterprise to accelerate their digital transformation journeys, according to Greatwood, who pointed to complex industrial area’s push to enable remote workers even before the coronavirus pandemic, as organizations work to remove professionals from hazardous settings around factories and warehouses.
The current market climate has encouraged businesses of all types to explore a renewed push to digitize, and as Greatwood noted, data sharing with external suppliers and business partners continues to become a growing priority.
“If you look a the digitization projects that people have contemplated over the last year or two, what does digital transformation mean? In an industrial setting, it means data sharing and reworking internal and external relationships around that data,” he said. “I think that the COVID-19 crisis is actually accelerating the determination to embrace that digital transformation, partly for revenue reasons, partly for efficiency and flexibility reasons.”