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IIoT - Industrial Internetization - Impact on Organizational Structures

From Internetization of people, we have gradually moved towards Internetization of industry. For an industry, organization itself and its competition, both are in a state of flux, and getting reshaped dramatically with the evolution of IIoT Ecosystem. As an outcome of converting non-living products into intelligent, connected and communicating smart devices, a not so envisaged scenario of transformation of organizational and operational structure has automatically started. Organizational structures built over previous three industrial revolutions, have started crumbling with the dawn of 4th Industrial revolution. 

While change has been a norm across all organizations, manufacturing industry has received most lethal hit till date. As Jeff Immelt (GE CEO) pointed out way back that every industrial company must become a software company, and rightly so, massive transformation across manufacturing companies have already begun. Without focusing on external implications (Strategy, Competition, Industry structure and Industry Boundary) which the world of IIoT is bringing in the world of Industry, an observation of internal implications for an Industrial organizations bring following pattern very visible - 


 1. Classical model of manufacturing company being divided into departments like R&D, manufacturing, sales, marketing, finance & IT would give into new models where practice of periodic hands-off across departments would be replaced by continuous co-ordination across functions.

2. As a result of products becoming intelligent, relationship between organization with its products and its customers is becoming continuous and open ended now.

3. Data would drive decisions in place of whims and fancies of individuals.

4. Traditional centralized model of command & control of management would be challenged by rich data and real time feedback. 

       

       There are number of below mentioned noteworthy shifts providing enough indications on how the industrial companies would evolve and how their organizational structure would go through massive changes -

  1. IIoT driving pervasiveness of IT - IT has already started assuming more central role in R&D or Engineering activities which has been the work of core R&D department till now. With the need to embed IT hardware and software in the product itself to make it smart, IT has become pivotal to R&D activities. Only time will tell if we shall continue to have R&D and IT as two separate departments or one would be made responsible for other or vice versa. Truth is, need to create smart and communicating product has ensured that there will hardly be any R&D without IT anymore.
  2.  Industrial Dev-Ops - With product becoming intelligent and connected, there is a continuous feedback loop which has come into existence with products relaying all the key information to its creators. In order to understand, manage and drive value out of this communication loop, similar to Dev-Ops model of IT, Industrial companies are exploring collaboration mechanism between teams responsible for product development and product support/operations. Aim is to reduce product release cycle, to provide better customer services and to get and understand the actual on ground feedback on products through IIoT ecosystem. Concept of Digital Thread is a step in this direction only.
  3.  Data Organization - Data is the new oil of the economy and same holds true for and industrial company as well. With millions of sensors, IIoT ecosystem generating data at enormous speed and scale, getting strategic value out of the data would remain a big challenge. In view of this, there would be an effort towards creation of data specific entity responsible for collection, consolidation, analysis and bringing in the insight aspects of right data. Appointment of Chief Data Officer across organizations is a baby step in that direction itself.
  4.  Consumer Management - Smart connected products through IIoT ecosystem has the capability to drive and deliver the value in PAAS (Product as a Service) model. It would be imperative to monitor product usage and performance data to understand the value being provided to consumer and mechanism to improve this further. Traditional sales & service teams are not equipped to cater to this changing scenario. Would there be a separate group responsible for managing consumer relationship in the world of IIoT? Only time shall answer this question.

 

For an Industrial organization, it is a journey from 'here' to 'there'. Organizational structures efficiently catering to the world of IIoT are yet to come. Changes are huge, while skills are very limited. Whether the structure would involve setting up separate business units, or to answer the change through amalgamated cross functional mechanism, or through COE routes, organizational structures will change for sure.

In this new world of IIoT, things have started speaking between themselves, and, with us as well. Very often, things speak softly, but at times, so loudly that it is not only organizational structure which will be shaken to the core, it is possibly our societal structure itself which may start reshaping someday, because, IIoT is not an evolution, but a revolution. 

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