HxGN RadioPodcast

Digital transformation’s new era

In this episode of HxGN Radio, Xalt Solutions president, Dr. Asif Rana, talks through the differences between a digital transformation and digitalisation and what that looks like partnering with Xalt Solutions.

BK: Welcome to HxGN Radio. My name is Brian, and in today’s podcast, we’re discussing the new era of digital transformation, where it started, how it’s evolving and also where it’s going.
Joining me today is Dr. Asif Rana, president of Hexagon’s Xalt Solutions. Asif, thank you for joining me today. Appreciate it.

AR: Absolutely. I’m pleased to be here, Brian. Thank you for having me.

BK: I would love to know a little bit more about you and what you do and… What are you nerding out on? What are you excited about right now? Even in a personal sense.

AR: So many questions here, but I would love to answer them. I’m really happy to be leading Xalt Solutions now. I’m president of Xalt Solutions. It’s a great business where we use Xalt as a technology to enable industrial solutions and then bring them to market. It’s also an interesting time in the digital transformation, as it’s happening across the whole world now. Many verticals who were our legacy before are going through the journey of digital transformation and we are right on the cusp of it. So very interesting times in how the market is evolving and growing exponentially and to be at the centre of it.

BK: Yeah.

AR: I’m really pleased to be where we are.

BK: That’s exciting. I’ve said this multiple times on different podcasts, but just excited to hear the passion that each person keeps bringing. You’ve got an excitement for it. You’re not just kind of, “Oh, I’ve got this cool job,” but it’s like, “No, I really love what I do.

AR: That’s 100 percent. Yes.

BK: “And I’m excited.” Yeah, I love that.

So, how did the idea of digital transformation even take off?

AR: Yeah, really a good question. Digital transformation, it’s almost like a journey.

BK: Yeah.

AR: It doesn’t have any, let’s say fixed point where you say it started, or is going to end. We are in almost a fourth industrial revolution now, right? And the third industrial revolution was when all these machines and connected devices and things kind of came up and PLCs and SCADA systems entered in the market, and you started putting sensors on devices and machines. And that kind of started in sixties and seventies a lot. And that was, I would say, the first stage of the digital transformation.
But the real digital transformation as we know now, I believe the starting point is, say, end of nineties and beginning of the 2000s.

BK: Okay.

AR: That’s really where digital transformation began to take off. When we got a massive amount of data coming from internet of things sensors, so called IOT, it enabled that. And also, we got the cloud to store all those huge amounts of data. So that’s, I would say the real beginning of the digital transformation in many different industries. And we are now on this journey, the whole world, and it’s kind of expanding. I would say it’s still in its kind of nesting stages, even with all of this development happening.

BK: Yeah.

AR: Another thing that also happened roughly in the same timeframe is the advent of artificial intelligence, which started with simple neural networks at the end of nineties. And then in the first 10 years of the century, it really got developed. So that’s also another driver for digital transformation, so now it’s in full swing.

BK: It’s neat to see though that even if it’s “still in its infancy” in some way or another, that’s a good thing because there’s just a lot to come still, and it’s going—

AR: That’s right.

BK: —to be an exciting future honestly.

What were some of the primary challenges that it originally was intended to solve?

AR: Yeah. Industries historically have always had this challenge of productivity, to increase the productivity.

BK: Yep.

AR: They also have this challenge of capital equipment kind of sitting only there, not being utilised. So, there is this whole concept of OEE, which is overall equipment effectiveness, how effectively you are using an equipment. These are some of the main I would say challenges that industries have had, and they wanted to increase productivity and increase the utilisation of equipment. But also, along came the goals of sustainability, really, which is very, very important now. And digital transformation aims to address most of these challenges in a cohesive way. Not really as addressing only one challenge and then the other, but rather cohesively.

Once you connect the systems in a factory, for example, in a seamless way using enterprise integration, you address all of them. So certainly, your people are connected, so there’s this whole social element to it that people can now collaborate. So, they are not siloed anymore. They are now connected, right? And the data has now become kind of fluid, which used to be kept in different silos. So, you can really get values out of it, which means you have now insights out of this data so you can learn from it. And then of course, becoming more efficient means now you don’t have to spend that much, for example, energy.

BK: Sure.

AR: So, you are more kind of sustainable. So, it really addresses the full spectrum of all these historic challenges that have been put in front of our industry.

BK: Yeah, that’s neat.

Which industries do you think were the early adopters into this?

AR: I would say manufacturing is certainly one of the early adopters.

BK: Okay.

AR: And that’s why we also see them most advanced at the moment.

BK: Okay. Yeah, that makes sense.

AR: All these sensor systems that are so called, for example, SCADA system, where you had all the automation happening, it started with manufacturing. So, it was kind of also, I would say, the birthplace.
In another word, maybe you have heard about industry 4.0? Industry 4.0 is actually a precursor to digital transformation. And now it’s kind of becoming industry 5.0. There is also this buzzword being kind of circulated around. So that’s one.

And then also to some extent, aviation. Honestly, aviation has also gone through digital transformation a lot. You see how the people kind of go about booking their flights and how they get scheduled and all those kind of network effects that you see. They have really leveraged it. It still, of course, there is a lot more to be done—

BK: Sure.

AR: —to make people even more happy and increase the customer’s satisfaction level. But they’re also, I would say, early adopters and are going through the transformation.
And then of course there are many others. Agriculture is another good example. Agriculture, because of the whole scalability issue to bring food to the world population, agriculture had to transform itself. And I think they’re also a very good example of digital transformation.

BK: Good. No, yeah. That’s a really good point about agriculture obviously needing to do that. Are we seeing them at an optimal place right now in agriculture in general?

AR: No.

BK: We’re still not even close, yeah.

AR: No, we are not. But they are kind of really making good progress there by connecting the supply chains and also by connecting the farm to the market and then processing of the crops. And then there are really infinite ways of increasing the efficiency of any given ecosystem, agriculture being one of them. How you connect with the farmer to the right kind of crops, and then understanding the effect of weather, for example. And the kind of land and those kind of analysis of the digital analysis of the nutrients, for example. And then how you link it to the optimal crop production. And then how these crops go into the market, and then how they end up in the consumer’s hands. So, there is this full cycle that has immense potential. And that’s actually true for all industries, that we can increase their effectiveness.

BK: Yeah, that’s great. Well, I appreciate though that these are actual industries that are making an impact too on the world. It’s not just like, “Ah, that’s cool. We’re using this. That’s nice,” but it actually means a difference and it can actually feed people and, you know.

AR: A hundred percent, yeah.

BK: Yeah.

AR: It’s not a science project.

BK: Yes.

AR: It is really—

BK: Global impact.

AR: It has global impact. It really affects the lives of people and brings happiness and also really satisfaction and increases effectiveness and efficiencies.

BK: Well, so kind of going off that a little bit too, what are some of the evolutions of digital transformation that you’ve seen?

AR: Yeah. So, I would say the most important evolution that’s happening now is the dae-siloing of the data. For example, you have a company and then in this company, there is one, let’s say, production function. Then you can also have sales function. Then you also have quality control function. You have also HR function. And historically, the data from all these functions used to reside in these functions alone. And in many cases, it was manual data on papers. Even worse. But even if it were digital in the form of Excel sheets or in some kind of databases, they were kind of isolated and siloed. So, the main transformation that’s happening right now is that this data is getting kind of dae-siloed, that we are providing a flexible backbone that the enterprise data is kind of flowing throughout the enterprise, and these silos are kind of being demolished.

The next thing that now, is the use of artificial intelligence and machine learning. Once you have the data, what to do with this data is the next question. What do you do with this? These are enormous amounts of data. We are talking about terabytes of data that’s available or is getting captured.

BK: Sure.

AR: And that’s where it’s no human job to understand or find—patterns in this data.

BK: Agree.

AR: So, the evolution is now really using artificial intelligence and machine learning to find patterns in this data. Why, for example, the failures happen in this particular shift at 3:00 A.M. in this factory? That’s something, for example, that you can only learn, “Oh, because the humidity is different at that moment and that’s why certain devices fail.” So those kinds of patterns, we can now recognise in the data and then feedback to make sure we have that humidity, let’s say, enhancement at that time, so it’s not dryness. There are many examples, similar to this.

BK: Sure, sure.

AR: People, for example, getting very tyred and then causing accidents there, to themselves and inside a production environment. And then understanding why it is happening. So those kinds of things that artificial intelligence really helps us, and then it kind of prescribes us what you should do to avoid those kinds of errors, failure points or pain points there.

BK: How accurate has that all been? Here it’s finding the commonality, whatever that is, and then it’s saying, “Here’s the suggestion,” and then implementing it. Are they finding that to be pretty close to accurate?

AR: It is extremely accurate. We have implemented in one of our customers, in a food and beverage company, and believe me, we have reduced this incidence by almost 80% in the production lines. Because now we know really why, for example, a conveyor belt is getting stuck, why the trimmer is not working, why this cavity has to be replaced every three months. All of these things suddenly come to light and now you can look at it. It’s extremely helpful. And it’s a hundred percent sustainability storey.

BK: Yeah.

AR: It is really what it is. So, it’s goodness. Pure.

BK: It is. Yeah. I love that. I love seeing that. There’s always… Seems like there’s always a downside to something, and then you hear about this, and you go, “I’m just seeing upsides. This is good. This is neat.”

AR: It is.

BK: Yeah. Well, so some incredible examples already. Do you have any other impactful examples you want to share, or have we covered at least a good enough amount?

AR: No, really. Something else that’s also close to my heart is this climate change challenge that all of whole humanity is going through. I believe digital transformation and digital technologies have… they have helped immensely on this front. How would you know, for example, what’s the carbon footprint in a given area without having sensors?

BK: Sure.

AR: And then without having them connected? And then also linking them and correlating them to weather patterns that you can, with extreme accuracy, pinpoint how the temperature will change in this. And you can predict it like 10 years in advance. So that’s the power of digital transformation happening, for example, for climate change. And then making people realise that the choices they are making, influence their future and future generations.

BK: And it’s predicting solutions for, here’s how we can reduce it.

AR: And it’s predicting solutions, yes, yes. So that’s also very close to my heart, that implementation.

BK: Are you finding… Not to go too much off on this topic, but are you finding resistance to the data?

AR: Yeah.

BK: Like if the data’s there, but people just, they don’t want to accept it? I’m just kind of curious.

AR: Yeah, it’s always… You can have the most cool and elegant solution that you can imagine, but if there is no buy-in from people and they’re not on board with it, it would kind of bite the dust.

BK: It’s useless, yeah.

AR: So, you have to really think about the human element.

BK: Sure.

AR: Yeah, there are sometimes fears.

BK: Of course.

AR: Of course, this is just pure human nature, and we should accept it rather than be going kind of crazy about it. You really have to sit with people to understand what their fears are, or apprehensions are and how we can address that.

In general, I haven’t seen any resistance that we could not answer, sitting with them and discussing that it’s really all about improvement in the process and doing better things, and it’s actually to enhance their functions.

What happens when digital transformation occurs in any given environment, human functions move to more, say, higher abstraction levels because the data kind of finds its way. And then you get value out of it. And now humans move towards decision making, which is really what we tell people. That’s what’s going to happen, “you are now going to exercise the executive functions that we are good at, and let machines take care of the things that are, for example, putting a screw always in this slot here.” This is not something that people like to do in the next generation. And that’s also leading to skill level shortage there. So digital transformation addresses that in a very nice way, addressing all these fears and apprehensions.

BK: Yeah. Interesting.

So, what do you see as the main driver, or even some of the main drivers of digital transformation today? Anything in what we talked about?

AR: I think we already discussed that. For me, the main drivers are, well capital equipment efficiency is one and then the other thing which we didn’t talk about is the skill level shortage. Skill level shortage is acute. If there was any time where it was the problem, it is now. There’s a latest survey by McKinsey saying that we will have almost 2.6 million jobs in manufacturing only. Fully opened by 2030, where we won’t have any candidate to fill that in. It’s almost $1 trillion gap in the skill level shortage.

So how do we solve that? I believe the answer to that is really lying in the digital transformation, that you train people for the jobs quickly, allow those mechanisms to capture the information, and then transfer it to the new people, so that you don’t need, say, five years of training. You can bring people, for example, in today and then have them productive tomorrow by kind of fully connecting them with all the relevant stakeholders and making data available at their fingertips. So, this is also one major driver, skill labour shortage for digital transformation.

BK: Okay. So, what do you see coming in the future then? Or would you like to see, too? I guess, that’d be the other thing.

AR: Yeah. I believe we need to address more, say, human things. I think the industry will take care of itself. It’s really going on a good path. But the human element, the sustainability element needs to get more focus. I really believe we need to understand what drives people, what motivates them, what kind of career options we can give to them when the digital transformation has fully happened, and to allay these fears to us that it’s not about humans. It’s really, at the end, all about humans and to make sure everyone finds the kind of job that they would like to do. And yeah, so, human factor and sustainability, I would say, that’s where we need to focus more going forward.

BK: Okay. Excellent.

So, any final advice that you would offer to an organisation or a leader wanting to adopt digital transformation?

AR: There are myriads of advice already available.

BK: Of course, of course.

AR: I don’t know if I can add to that. But one thing that we have learnt a lot while implementing digital transformation in the industry is that we need to keep the business case in focus. We cannot just go in as cool technology. That might work maybe for the mainstream, but really for industrial applications, you need to have a very solid business case behind it. What is the ROI for this investment? How it is going to affect my bottom line, what will be the increase in profit margin, how it is going to add to the more productivity or people satisfaction, for example. All those things need to be captured, reviewed, and then really kind of set as targets before you embark on the additional transformation journey.

BK: Excellent. Yeah, like you said, a lot of advice out there, but that’s personal. That’s what you’ve learnt, which means that’s what I wanted. So, thank you for sharing that.

Asif, thank you very much for your time and sharing all this. And honestly, it’s a very, very encouraging, and exciting time, so this is great.

AR: Thank you, Brian, for having me. I really enjoyed this conversation. Thank you so much.

BK: Thank you.

Dr. Asif Rana, President of Hexagon’s Xalt Solutions, thank you for joining us on HxGN Radio.

For more information, and to listen to additional episodes, head over to iTunes, Spotify, or SoundCloud. And of course, please visit hxgnspotlight.com for more storeys from Hexagon and for more information. Thank you again for listening and have yourself an excellent day.