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3 Classic Industries Being Revitalized in the Digital Transformation Era

Appian Contributor
January 10, 2018

For many, the grand idea of the American Dream is epitomized in the rapid economic growth that occurred in the middle of the twentieth century. Mainstream industries such as manufacturing, oil and gas, and telecom established themselves as havens for blue-collar workers. The country ran on real, raw materials, not information and digital assets. At least, that's how the narrative often goes. Even telecom was largely built on analog solutions and rotary phones.

"The industry giants of the 20th century are becoming the technology titans of the new millennium."

This vision of a perfect economy grounded in raw materials with clear value may be a bit overly optimistic, but it does point to a clear situation many of the economic systems that underpin where the world is today were built on the back of these classic industries.

Whether or not we should be striving to recreate the vision of yesteryear isn't necessarily important for the manufacturing, oil and gas, and telecom sectors. Organizations in these industries, like always, face their fair share of challenges and possibilities. However, they also share a common thread they are increasingly dependent on digital technologies to get the job done. Those General Electric commercials you see where people say they got a job working with GE only to reveal they are programmers or AI designers aren't an exaggeration.

The industry giants of the 20th century are becoming the technology titans of the new millennium.

    • Manufacturers are embracing the industrial internet of things (IoT)

    • Oil and gas companies are using supercomputers and advanced simulations to perform resource discovery

    • Telecom has moved beyond a business model focused primarily on rolling out cables to one that emphasizes service delivery

Let's look at each of these sectors in more detail and consider just how much digital technologies are impacting them.

Digital Transformation in Manufacturing

The IoT has become a disruptive force in the manufacturing sector, pushing organizations to gain greater transparency into every facet of operations through connected devices. Zebra Technologies found that the number of fully connected factories will double between 2017 and 2022, creating an operational climate in which 88 percent of manufacturers polled in the study said they expect revenue growth through the period. Manufacturers are moving quickly to develop connected factories in part because they need greater operational visibility and flexibility to keep up with changing customer demands. The study found that:

    • Manufacturers are increasingly pressured to offer a wider range of products and more custom experiences. As such, the opportunities to drive down costs through labor reductions or by buying cheap supplies is diminishing. Companies can't sacrifice quality, so they have to improve margins through efficiency, which is where digital technologies enter the fray

    • Many organizations are starting to automate quality checkpoints at more levels of the manufacturing process to prevent faults from escalating and ensure high quality product creation

    • End-to-end supply chain visibility and inventory management excellence are emerging as key competitive differentiators, particularly as technologies that drive connectivity across the plant floor enable companies to handle complex bills of materials

    • Extending data access between production lines, supply chains and workers is becoming critical, with 43 percent of companies using the IoT for such functions right now and 64 percent expecting to do so by 2022

Digital transformation is giving manufacturers an opportunity to put a new focus on quality, and emerging connected technologies underpin this progress.

Digital Transformation in Oil and Gas

While the manufacturing sector is rapidly moving toward maturation when it comes to digital technologies, the oil and gas industry is still getting going. However, a Deloitte study found that current conditions in the sector are pushing companies to embrace digital. At this point, most oil and gas businesses clearly understand the benefits of greater connectivity and digital maturity. The challenging nature of the process has held them back. These barriers are disappearing however, as the news source explained that organizations are:

    • Experiencing an oil and gas pricing situation that is leading to moderate revenues and putting pressure on organizations to ramp up efficiency

    • Understanding that they need to develop formal digital road maps to counter the siloed technologies that are currently in place and limiting efficiency

    • Recognizing that the current pricing issues in the industry could lead to increased problems if the industry experiences one of its typical downturns

According to Deloitte, digital transformation offers a path to operational efficiency and lean operations, helping businesses stabilize expenses and revenues even as demand and price parameters in the industry change.

Digital Transformation in Telecom

Telecom providers are in a somewhat unique position when it comes to digital transformation. The World Economic Forum explained that telecoms are simultaneously emerging as key enablers for digital technologies in other industries while also facing pressure to adapt and adjust themselves. For telecom, the move to invest in new technology takes the form of a few major developments, according to the WEF, including:

    • Increased investments in solutions that drive interoperability as more components of the global economy become reliant on disparate digital technologies

    • Demand for telecom services in emerging markets to drive more equitable access to digital technologies and solutions

    • Stringent security requirements that push for even higher levels of availability, resiliency and data protection across the sector

    • A growing need for innovative service models that allow telecoms to glean greater value from the digital transformation happening in a variety of industries

While telecoms play a big part in fueling digital transformation, they are also facing a period of disruption as they work to keep up with emerging market demands.

Adapting in the New Digital World

As businesses in these classic sectors adjust to digital technologies, they need solutions that allow them to operate more flexibly. The problem is they can't simply latch on to the latest tech fad or startup that is gaining traction. The established nature of these industries means that companies face serious regulatory pressure, security threats and operational complexity that must be addressed.

Application development platforms featuring business process management tools are emerging as essential digital transformation enablers for companies facing such challenges. The platform offers a secure hub for data integration and low-code app development, streamlining application creation and customization. From there, advanced role management tools simplify user authentication and data protection. Modern solutions, such as Appian, offer the blend of flexibility and stability that businesses need in the emerging digital marketplace.

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