- Digitalisation can raise productivity, which in turn increases profitand reduces wastage
- Estimates suggest that it can boost profitability by as much as 20-30%
- There are still industries lagging behind when it comes to digitalisation, but with huge potential for change and improvement
Have you ever wondered how farmers from a century ago would react to the way farming is done today? Imagine being a farmer in the early 1900s, cultivating the fields with your trusty bull, marvelling at the miracles of ploughs and shovels – and then having your mind promptly exploded by the arrival of a plough tractor that would cough smoke and work 50 times faster.
The truth is, most farmers today would just as easily drop their jaws at modern innovations of farming. Flying drones that can help survey the farmland faster, gliding atop automated tractors that can plant seeds with speed and precision, while an extensive wireless network relays real-time data on soil hydration back to the farmer who – instead of a hoe – now operates a computer.
We’re here at this transitioning point – an era people are hailing as Industry 4.0. It is the era of the “smart factory”, where computers and automation come together in a new way. By connecting any device to the internet, productivity and manufacturing output in essentially every industry could be increased dramatically. The future of industry is where most aspects of it are digitalised.
Technology company Siemens defines digitalisation as “the integration of digital technologies into everyday life by converting information into digital format and computerisation of systems and jobs for ease and accessibility”.
In a way, most industries have already digitalised major parts of their daily operations. Banks and insurance companies no longer file client information into huge, unwieldy cabinets. Instead, the information is stored electronically, and made accessible via computers. You hardly need a human teller when ATMs can serve you at banks. It’s likely that your office is similarly digitalised.
This makes managing accounts and accessing files and data a lot easier for businesses that have to deal with this on a daily basis – even the media could now extract their archived information in a heartbeat. Menial work that used to take up a whole afternoon can be done within the time span of typing out a search term.
Of course, this has helped improve operations at your workplace, though the industries that could flourish the most in the shift of digitalisation are those dealing with basic goods and advanced manufacturing, transportation and utilities. Computers and GPS now help track the transportation of goods, while product design is done via digital tools, and software can be used to control the machines churning out the products.
Still, a lot of thinking needs to be done by human workers. Siemens, for one, envisions a more digitalised work environment as one that could aid in optimising the entire product lifecycle – from the design, engineering and manufacturing to the service, marketing and transportation of manufactured products. With an optimised cycle, productivity increases and with it market share, revenue, profit and growth.
Siemens says conservative estimates supported by analysis of real-life cases suggest that digital optimisation could boost profitability by 20% to 30%. This can be achieved when productivity is increased, especially when companies take advantage of a digitalised work environment. This is where digital productivity tools, smart meters and smart grid are used, and back-office processes are automated.
Siemens claims that the use of digitalisation has helped it tremendously in planning for “transformative enhancements in productivity, reliability, safety, customer experience, compliance, and revenue management”.
Yet, there are certain industries that have yet to take advantage of digitalisation to the fullest. According to Siemens, laggard sectors include hospitality, healthcare, construction, agriculture and government, all of which have not profited from digitalisation as much as other industries.
Siemens believes this is in part due to areas in these sectors that prove difficult, too expensive or too impractical to digitalise – though there is certainly room for improvement.
Storing patient info electronically
Let’s take hospitals as an example. For the most part, they store patient information electronically in their own servers, yet most doctors still use a traditional wood-with-paper clipboard when visiting their patients. Their handwritten notes have to be manually input into digital form later.
Why not turn that clipboard into a tablet computer that can provide not only the relevant information stored on it, but also offer treatment suggestions based on the analysis of the stored data? What if the tablet can also relay the patient’s condition when he presses the emergency button?
Going back to agriculture, one other potential digitalisation is using intelligent irrigation systems that are capable of using meteorological and ground data to intelligently anticipate the plants’ needs and supply them the required nutrients and water. Considering that 69% of the world’s freshwater withdrawals are committed to agriculture, this not only helps farmers maximise their harvest but also reduces water consumption.
Towards a digitalised future
The thing about a digitalised work environment is that it offers benefits not just to companies but also to consumers. Imagine a highly digitalised transportation sector, where public transportation could be more reliable and Kuala Lumpur’s infamous traffic congestion can be relieved by digitally connecting vehicles on the street and on the rails using the Internet of Things (IoT).
Trains and buses could be more punctual, making them more attractive to the masses and helping reduce car usage. This might even boost the nation’s economy in the long run – a World Bank study showed that in 2014, economic losses due to traffic congestion in the Klang Valley came to RM20 billion, or RM54.8 million a day. The cost is associated with loss of productivity, wasted fuel and environmental damage caused by exhaust fumes.
Digitalisation has yet to reach its full potential, and perhaps it is still early to see just how large an impact it can make on the economy and on our private lives, but we can already observe the clear advantages it can bring. That is exactly what innovators like the ones at Siemens can testify about as they are a big part of the value creation chain and make up the consumer numbers too.
Technology changes at a rapid rate. It’s important for us to remember that it took only three decades for mankind to evolve the original Motorola mobile phone concept into the first ever iPhone – essentially a computer in our palms capable of feats that people in the 70s couldn’t even imagine. It won’t take us long to find out the true promise of a digitalised world and how it can change our way of living.
It certainly wouldn’t hurt for us to get started a little earlier, and embrace digitalisation in any way we can today.
This article is brought to you by Siemens.
Conservative estimates suggest digital optimisation can boost profitability by 20-30%
Digitalisation can help innovate and improve transportation, making trains and buses arrive on time, and help reduce traffic jams
The design process of a product can be done using digital tools, while software can manage the machines that make the products