Digitization has affected virtually every industry over the last few years. The adoption of digital technologies by businesses and customers has recently accelerated even more, with the COVID-19 pandemic as a leading factor.
According to a recent World Economic Forum report, more than 60% of global GDP will face digitization by 2022 and an estimated 70% of new value created in the economy over the next 10 years will be based on digitally-enabled platforms. Today, companies who accelerated their journey to digital maturity find themselves more resilient, more efficient and better positioned to succeed. With the right approach, they can capture the value of the data economy.
The next step for digitization: toward the data economy
Taking the next step means another big shift in strategic thinking. Strategies going forward will need to move from treating data just as a byproduct of IoT applications, to treating it like a valuable business asset, a strategic resource which can be used to generate revenue.
When we’ve talked about digitization in recent years, we’ve focused on the ability to optimize resource usage and productivity thanks to collecting and analyzing data. As the new data generated from connected devices and processes becomes more insightful, businesses can use it to drive increased efficiencies and productivity within their business processes. This is a clear benefit for manufacturing company managers and building owners, among others. Business needs must drive all transformation efforts. At Schneider, not only can we envision this transformation, we have made it happen for our company — one of Schneider Electric’s smart factories in Le Vaudreuil, France embraces smart technology with proven results. Le Vaudreuil collects real-time insights through the power of sensors, secure connectivity, and an IIoT platform that has resulted in productivity gains of up to 7% while energy innovations have achieved savings of up to 30%.
But there’s also huge value in that data for others. A Digital McKinsey report states that globally by 2025, around $60 trillion in annual revenue could be redistributed across the economy via open ecosystems – a third of that year’s total.
Opening a world of opportunities
It might seem at first that this is just another thing that industrial companies “have to do” in the age of digitization. But data-as-a-service creates many real opportunities and helps build strong foundations for resiliency with recurring revenue – the main driver of the subscription economy business models.
Take Opinum, a company that offers a data hub solution to help building operators and property managers to centralize, enhance, analyze, and visualize their data. They leverage advanced data science expertise for energy-savings calculations – a capability enabled through Schneider Electric Exchange and integrated into a value-added, digital offer and a subscription-based model. Such an approach allows Opinum to deliver a scalable solution that meets the customers’ data needs and energy efficiency goals.
Another opportunity lies in product innovation. Offering useful data as a product to developers, for example, will enable them to build better AI models for creating predictive maintenance programs or condition-based monitoring software. Again – the more data in their hands, the better.
Data is set to be the foundation of new digital services and business models. In fact, we are only scratching the surface of its capabilities and we are yet to fully unleash all this data. It’s estimated that between 60-73% of enterprise data goes unused for analytics. Imagine the potential that lies within that unused data. When we do unleash it – and tap into relevant data-based learnings – IoT will transform even more services than it does today and inspire new efficient business models.
Taking that next step of digitization
So how can digitized firms get ready to grab these opportunities?
Open business platforms are a great way because companies who are looking to take that next step following their digital transformation often find it difficult, if not impossible, to go it alone.
With an open digital ecosystem – such as Schneider Electric Exchange – secure data sharing is possible and connected communities, not solo companies, are able to solve customer problems by leveraging co-innovation. Companies sometimes even don’t realize know how valuable their information and knowledge can be to others, until they connect to the right ecosystem of collaborators.
Using this bold approach, these platforms are not just a smart way to tackle today’s efficiency and sustainability challenges more quickly, they are also vital resources for companies looking beyond digitization.
The opportunities of the post-digitization world are out there and potentially huge. And, together, we’re well placed to take advantage. Learn more on how to seize the value of the data economy.