Digital transformation has proven difficult across different industry sectors. Huge prizes are on offer if it’s done ‘right’ – higher productivity, greater operational efficiencies, sustainability – but examples of digital success are still thin on the ground.

A global survey by consultancy firm McKinsey found only between 4% and 11% of digital transformation projects were deemed successful in traditional industry sectors. The survey canvassed various verticals, including automotive, manufacturing, pharmaceuticals, and oil and gas. In many cases, discovered McKinsey, projects suffered from a lack of appropriate skills and effective partners to help organizations implement change effectively.

To help create more effective digital partnerships and establish best practice for transformation projects, Global Industry Organizations (GIO) was launched at the 2018 edition of Mobile World Congress. The work is ongoing. “GIO provides a common forum for discussion and open exchange of ideas among different industry sectors,” explained Martin Creaner, a GIO Special Advisor, in conversation with Mobile World Live.

The GIO goal, added Creaner, is to accelerate digital transformation: not only through cross industry collaboration, but also to work out how different verticals can best intersect with ICT.

GIO takes a consensus-building approach and involves a variety of industry organizations, including ETSI, 5G-ACIA, and CCSA, etc. TM Forum, which Creaner served as CEO for over a decade, is another GIO contributor. “GIO will play an important and specific role in promoting industry digital transformation,” asserted Creaner.

How to develop industry-specific ecosystems

As part of its efforts to promote dialogue and share examples of successful digital transformation initiatives, GIO released a whitepaper entitled “Industry-Specific Ecosystems” in the run up to this year’s MWC event.

“Different vertical industries are trying to pull together ecosystems in order to help them transform, to do things differently, and sell new services more efficiently and sustainably,” said Creaner. “The whitepaper illustrates how ecosystems can be used more effectively to support digital transformation.”

From the outset the whitepaper flags a main stumbling block to successful digital transformation. While an enterprise generally has deep knowledge of its own vertical industry, the necessary in-house skills to work with the latest technologies is often lacking. Likewise, suppliers of disruptive ICT – such as 5G, AI, cloud, and edge computing – rarely have deep knowledge of the vertical industries they are helping to transform.

The most successful digital transformation projects, points out the whitepaper, invariably involve a bringing together of vertical-specific expertise with digital know-how from experienced partners. Building and managing ecosystems of this sort, however, is a lot easier said than done.

To help industry verticals and their suppliers navigate through the complexity, the whitepaper details some models, frameworks, and methodologies for building “business ecosystems.”

Exploring the challenges of data-sharing across ecosystems, and how to develop “trust infrastructures”, is another whitepaper theme. It also proposes the concept of industry-specific platforms “as a way of bringing vertical industry ecosystems to life.”

To build business ecosystems, GIO advocates higher levels of modularity of various cloud, communications, and specialist components through standardization (something which GIO, backed by industry organization partners, is actively involved in promoting). Digital transformation initiatives undertaken by vertical industries, observes the whitepaper, are typically done on an ad hoc basis, managed by systems integrators. By moving towards a more open market model, however, vertical industry buyers can select best of breed components from what will be a more modularized market. This can significantly reduce both the cost and time to market of creating solutions from disruptive components.

The whitepaper further points out that identification and implementation of new business and innovation opportunities is an important element of any digital transformation. As such it’s vital to have a clear and consistent methodology. With this in mind, GIO has adopted the Digital Service Innovation Framework’ (DSIF), a methodology proposed by Huawei SPO Lab. Although initially developed to explore digital services opportunities within the telco industry, DSIF can be applied in other verticals.

Trusted sharing of data between different parties and adhering to national and regional regulation on digital sovereignty is also essential to develop deeply interconnected business ecosystems across different industry verticals. Trusted sharing, emphasizes the whitepaper, needs to seamlessly guarantee standardization, verifiability, interoperability, and transparency.

Although more work is needed to develop trusted infrastructures, GIO thinks that existing EU data sharing initiatives, such as International Data Spaces and Europe’s GAIA-X – as well as equivalent initiatives in the Chinese and Japanese markets – can help pave the way for secure data interoperability and the safeguarding of digital sovereignty.

The development of industry-specific platforms, which avoids the need for verticals to have multiple 1:1 relationships with each of the key providers of transformational technologies, is another GIO aim. Platform creation and governance are clearly challenges, but GIO suggests that distributed ledger-based tokens could form the basis of successful implementation.

Case studies

The whitepaper highlighted various digital transformation use cases in the manufacturing sector, involving trusted data sharing and development of business ecosystems. A common focus among the case studies is Operational Equipment Effectiveness (OEE) – the ability to maximize the produced quantities on any given equipment – which is key in manufacturing.

One case study, submitted by ZVEI, an Electrical and Electronic Manufacturers Association in Germany, deals with Collaborative Condition Monitoring. Through cross-company collaboration and the collection and use of operating data, it is possible to optimize the reliability and service-life of machines and their components, which reduces costs.

Huawei SPO Lab and its partners have demonstrated a business case for digital transformation in the process of Selective Laser Melting (SLM), which is used to create sophisticated and expensive manufactured products for the aerospace and medical industries. By improving control of the SLM process through cloud-based AI algorithms there is a reduction in wastage through failed builds – which saves money – and improved customer satisfaction through reduced delays and uncertainty.

E-Vehicle, an E2W (two-wheeled EV) company located in Wuxi, China, is embarking on full-lifecycle product management based on industrial Internet platforms. As workshops are digitized, existing information systems will be integrated to link information silos. This aims to improve the company’s flexibility and develop sustainably in the future.

GIO expansion

GIO is open to all industry organizations and Creaner is hopeful that more will get involved, particularly those which represent verticals. To stimulate broader interest, GIO will be present at vertical industries’ flagship events, emphasizing the benefits of ecosystem building when undertaking digital transformation projects.

“We want to develop trust infrastructures across different continents, not just within one region,” said Creaner.

— Ken Wieland, Light Reading contributing editor

This content is sponsored by Huawei.