Digital Transformation in Industry White Paper
An Industrial Internet Consortium White Paper
Version 1.0
2020-07-29

Digital Transformation in Industry White Paper

Contents

CONTENTS
1 IIC Approach to Digital Transformation ................................................................................. 5
2 Key Technologies Underpinning DX ....................................................................................... 8
2.1

Cloud/Edge .............................................................................................................................. 8

2.2
2.3

Hyper-Connectivity .................................................................................................................. 9
Data Security ......................................................................................................................... 10

2.4
2.5
2.6
2.7

AI & Analytics ........................................................................................................................ 11
Digital Twins .......................................................................................................................... 13
Distributed Ledger ................................................................................................................. 14
Human-Machine Interface ..................................................................................................... 15

2.8
2.9
2.10
2.11

Additive Manufacturing ......................................................................................................... 16
Data Sharing .......................................................................................................................... 17
IIoT ..................................................................................................................................... 18
Autonomous Robotic Systems ............................................................................................... 19

2.12
2.13
2.14
2.15

Innovation at the IT/OT Boundary ......................................................................................... 20
Micropower Generation for IIoT end devices - energy harvesting ......................................... 21
Servitization........................................................................................................................... 23
Technical Platforms for New Business Models and Payment Methods.................................. 24

3 Digital Transformation and Trustworthiness ....................................................................... 25
3.1
3.2
3.3

What is Trustworthiness in IoT? ............................................................................................ 25
IoT Trustworthiness Requirements ........................................................................................ 26
Impact of Trustworthiness on Digital Transformation ........................................................... 27

4 Context for the DX Journey.................................................................................................. 29
4.1

Role of Innovation in Digital Transformation ......................................................................... 29

4.2
4.3

The Digital Transformation Program...................................................................................... 30
DX Programs and IIoT Projects............................................................................................... 31

5 First Steps for Adoption ....................................................................................................... 32
5.1
5.2

Find out what the leaders in your industry are doing ............................................................ 32
Investigate relevant developments in comparable industries ............................................... 33

5.3
5.4

Identify your key use cases .................................................................................................... 33
Deduce which digital transformation technologies are most relevant to you........................ 33

5.5
5.6

Identify key vendors .............................................................................................................. 34
Plan for deployment .............................................................................................................. 34

6 Acknowledgements and Legal ............................................................................................. 35- ii -

Digital Transformation in Industry White Paper

Contents

FIGURES
Figure 0-1: Digital Transformation in Industry–source IIC ......................................................................... 4
Figure 1-1: Digital Transformation Journey–source IIC ............................................................................. 5
Figure 1-2: Digitization, Digitalization and Digital Transformation–source IIC ........................................... 6
Figure 3-1: Convergence of IT-OT and IoT Trustworthiness–source IIC ................................................... 26
Figure 3-2: Different Trustworthiness States–source IIC ......................................................................... 26
Figure 3-3: Example of Trustworthiness Analysis–source IIC .................................................................. 28
Figure 4-1: Cross-functional Digital Transformation Program Team–source IGnPower ........................... 30
Figure 4-2: Digital Transformation Programs and IIoT Projects–source IIC .............................................. 31
Figure 5-1: First Steps for Adoption Framework–source Transforma Insights ......................................... 32

TABLES
Table 2-1: Edge Technology ..................................................................................................................... 9
Table 2-2: Hyper Connectivity ................................................................................................................ 10
Table 2-3: Data Security ......................................................................................................................... 11
Table 2-4: Artificial Intelligence and Analytics ........................................................................................ 12
Table 2-5: Digital Twin ........................................................................................................................... 14
Table 2-6: Distributed Ledger ................................................................................................................ 15
Table 2-7: Human-Machine Interface .................................................................................................... 16
Table 2-8: Additive Manufacturing......................................................................................................... 17
Table 2-9: Data Sharing.......................................................................................................................... 18
Table 2-10: IIoT...................................................................................................................................... 19
Table 2-11: Autonomous Robotic Systems ............................................................................................. 20
Table 2-12: Innovation at the IT/OT Boundary ....................................................................................... 21
Table 2-13: Micropower Generation–Energy Harvesting ........................................................................ 23
Table 2-14: Servitization ........................................................................................................................ 24
Table 2-15: Technical Platforms for New Business and Payment Models................................................ 25- iii -

Digital Transformation in Industry White Paper

IIC Approach to Digital Transformation

Digital transformation (“DX”) is a general term used in several market spaces and domains, forexample:•••in the consumer space, disruptive technologies have transformed how media content isdelivered to consumers (for example, Netflix and Uber),in business, mobile payment applications have transformed the way individuals andcorporations consume banking services andin industry, disruptive technologies are transforming how companies operate, service,
and maintain equipment.

These DX domains are all based on internet connectedness, consumer-to-consumer, service
consumer-to-service providers, consumer-to-business, and systems-to-machines and otherphysical things. The arrows in figure 0-1 suggest a timeline of when things started for these typesof digital transformation. The ends of the arrows represent today. The thicknesses are indicationsof market impact.

Digital Transforma�on for Consumers
Digital Transforma�on of Business (IT)
Digital Transforma�on in Industry (IT-OT)
Leverage connected things to transform processes
and operations and produce better outcomes

Figure 0-1: Digital Transformation in Industry–source IIC

Disruptive technologies are transforming industries into digital industries, a “caterpillar-tobutterfly” journey, which in some cases is a “do-or-die” proposition. This transformation canpresent major challenges, outside of normal business models and technological concerns, forexample, compliance with security and regulatory pressures.
We provide a general overview of digital transformation (DX) in industry and the types of better
outcomes that organizations seek when they embark on DX journeys. We also highlight:•••

the business factors (section 1),
key technologies (section 2) andtrustworthiness factors (section 3) that underpin these journeys.

The paper targets business managers who are involved in setting the digital transformation
strategy and journey for an organization, and technology managers who need to identify andassess how technologies can be leveraged to facilitate the DX journey. Finally, we target risk,-4-

Digital Transformation in Industry White Paper

IIC Approach to Digital Transformation

security and safety managers responsible for implementing protection and mitigation strategies
to minimize the impact of disruptions, attacks, errors and faults along the journey.

1 IIC APPROACH TO DIGITAL TRANSFORMATIONThe Industrial Internet Consortium (IIC) 1 is transforming business and society by accelerating theIndustrial Internet of Things 2 (IIoT 3). Since its founding, IoT has matured, with an explosion of use
cases and applications that continue to transform business, industry, and society.
With the continued maturation of IoT, there is a growing realization that it is one of several sets4of technologies that are driving the transformation of business, industry, and society. The IIC has
thus widened its focus to include this broader set of technologies and how they empower this
digital transformation in industry.
The transformation of industries into digital industries can present major challenges in terms of
security and regulatory pressures. Digital transformation is primarily a business objective. It is
the innovative and principled application of digital technologies, and the strategic realignment of
the organization towards the improvement of business models, industrial models, and processes
and ultimately the creation of entirely new ones.
Definition: Digital transformation in industry leverages connected things to transform
processes and operations to produce better outcomes (figure 1-1).
Moun�ng Challenges
Higher Process Eﬃciencies
Disrup�ve Innova�on
Moun�ng Market Pressures
Growing Regulatory Pressures
Exponen�al Growth of Big Data
Evolving Demographics

Be�er Outcomes
New business models
New partnership models
New opera�onal models
New service models

Digital Transforma�on Journey

Business Factors

Technology Factors

Trustworthiness Factors

Corporate Strategy
Investment & ROI
Organiza�on
Processes
Supply Chains

Cloud / Edge
Hyper Connec�vity
Cybersecurity
AI & Analy�cs
Digital Twins
Distributed Ledger

Security
Privacy
SafetyReliability
Resilience

Figure 1-1: Digital Transformation Journey–source IIC

1
2
3
4

https://www.iiconsortium.org/
https://www.iiconsortium.org/vocab/IIC_Vocab_Technical_Report_2.2.pdf
In this paper the terms IIoT and IoT are used interchangeably to refer to Industrial IoT.
Refer to section 2 for details.

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IIC Approach to Digital Transformation

A distinguishing aspect of digital transformation in industry, as opposed to digital transformation
for consumers and in wider business, is the convergence of Information Technology (IT) andOperational Technology (OT). In DX in industry, the innovative use of sensor-driven data anddata-driven actuators affect people, business, operation, and the physical environment andempower the creation of better business outcomes.
We focus on digital transformation from the perspective of filling the gap between strategy andprocesses of innovation, and new technologies that enable more complex interaction of IT and
OT technologies. The IIC’s mission. of “delivering a trustworthy IIoT in which the world’s systems
and devices are securely connected and controlled to deliver transformational outcomes”, isclosely associated with the innovation projects of member companies. The IIC is well positioned
to fill the gap between industrial transformation strategy and processes of innovation and also
the gap between the process of innovation and resources of firms.
Digital transformation in industry should encompass innovation processes when integrating IT
and OT. This is based on the view that DX can best be achieved by adopting new business models.
This includes new value propositions made possible by accumulating successes in innovation andby reducing the conflicts between these new and incumbent processes, and other parts ofmanagement systems. This is done by changing the designs of management systems.
Before delving into the details of digital transformation, we examine three related terms that are
sometimes used interchangeably:•••

digitization,
digitalization anddigital transformation.

Figure 1-2 below illustrates the differences between these terms and their progressive nature:

Digi�za�on

Digitaliza�on

Digital Transforma�on• Transi�on from analog
informa�on to digital
informa�on• Make informa�on available
and accessible in digitalformat• Build on digi�za�on• Leverage digi�zed
informa�on in processes• Standardize digital work

• Build on digitaliza�on tocreate new businessconcepts• Devise new businessapplica�ons and models

Figure 1-2: Digitization, Digitalization and Digital Transformation–source IIC

Important: Although we focus on digital transformation, some industrial organizations use theterm to encompass digitization and digitalization. These organizations may be focused on
digitizing and improving their process and operational efficiencies only or it may be a first phaseof a gradual progression towards digital transformation.
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Digital Transformation in Industry White Paper

IIC Approach to Digital Transformation

The driving force for DX is often market pressure: competition, or the threat of competition. If
one participant in a market successfully implements a digitally transformative project, thencompetitors in that market will feel compelled also to transform—or risk losing competitivenessand market share.
The routes by which such competitive advantages come about range from higher process
efficiencies enabling lower pricing to customers through to disruptive innovation and theimplementation of a new customer proposition in the marketplace that is significantly different
from existing propositions.
Regulatory pressures have historically been a significant driver of business transformation, andthis will increase in the wake of COVID-19, with an increased focus on ‘safe’ working practices
and social distancing.
Beyond these driving forces are a range of indirect forces that may prompt enterprises to rethink
how they do business. For instance, evolving demographics and an aging population may force ahealthcare insurance provider to rethink how their services are provided to older clients.
There are network effects at play too. The simple availability of new technologies and techniquesmeans that enterprises can consider transforming their businesses in ways that, until now, havenot been possible. One of the most significant considerations in this context is the quantity,
quality and timeliness of information and the exponential growth of big data.
In all, the motivations for deploying digitally transformative solutions are diverse, but they sharea need (or desire) to do business in a new and better way.
Digital transformation initiatives fall into three categories:•••

those encompassing new business models and that affect both enterprise value
propositions and efficiency,
those that affect enterprise operations and support activities but not customer
experience andthose that affect customer experience, but not operational efficiency.

New business models entail an enterprise transforming to offer a substantially changed service
to end users, often associated with new ways of charging for services. A classic example is avendor of hardware assets offering those same assets as a service. Such changes often involve
far-reaching changes to the operating model of an enterprise, including the need to instantiate
new kinds of ongoing client support capabilities such as customer service capabilities, recurringbilling capabilities, field support capabilities and enforceable and auditable protocols for service
and maintenance compliance.
Some digital transformation projects focus on either new partnership models or new operationalmodels and leave the value proposition of the enterprise deploying the solution relatively
unchanged, focusing primarily on increasing the efficiency (or reducing the cost, or risk) of-7-

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

providing products and services to end users. An example is an airline changing the way thatspare parts are purchased to provide additional transparency of stock levels through the supply
chain and increase efficiency. Such a project does not affect the airline’s overall proposition to
its passengers and is instead a ‘behind the scenes’ change. A project of this kind could rely on
distributed ledger technologies to allow for new levels of sharing information between parties inthe supply chain for any parts and reduce the service and maintenance costs of aircraft.
A final category of digital transformation focusses on changing the customer experience in theabsence of or in addition to other changes. This kind of project tends to focus on generating newservice revenues or providing new services to customers, particularly field services. Such projects
leave the overall existing operations of an enterprise relatively unchanged, while overlaying a
new capability for an improved overall customer proposition. If a company deploying such a
service were to take the next step to guarantee the performance of an asset, then it would
inevitably impact both support operations and the end user proposition.

2 KEY TECHNOLOGIES UNDERPINNING DX
Digital transformation is a journey from the Mounting Challenges to the Better Outcomes (figure1-1). The journey is underpinned by three factors: business, technology and trustworthiness.
Industrial IoT is about connecting “things” to a network and capturing operational and contextual
data (potentially big data) about these “things” with the purpose of controlling them andoptimizing their operation. This opens the door to innovative use of a wide range of emerging(and some well-established) technologies that together enable the digital transformation sought.
The following sections provide an overview of some of these emerging technologies1 and their
key usage scenarios within a DX context.

2.1

CLOUD/EDGEDX Technology: Edge
Edge technologies bring processing intelligence closer to data sources, allowing (near-)realtime responsiveness and improved functionality in situations where local devices may not be
continuously connected to data center resources.

1

The list of innovations and advancements in technology that can affect digital transformation is toolong to be covered here, and includes innovations around sensors and actuators, advancements in
nanotechnology (nano robots, supercapacitor batteries, etc.)-8-Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Edge
Key usage scenarios:•••

Edge computing can enable improved solution performance, including more responsive
applications, improved robustness and reliability and autonomous operation.
Storing and processing data nearer to data sources can help with regulatorycompliance, including privacy and security.
Redaction at the edge can reduce connectivity, data migration and bandwidth costs
associated with sending data to the data center.

Relevant IIC publications:•••

Journal of Innovation: September 2017
Introduction to Edge Computing in IIoT (White Paper)
The Edge Computing Advantage (White Paper)

Opportunities for the IIC:•••

Develop guidelines for how artificial intelligence applications can be optimized acrossdata center and edge assets.
Investigate how multi-access edge computing (MEC) can be used to support industrial
users, including the limitations of MEC solutions.
Develop guidelines for how local processing capabilities can be most effectively shared
between local edge devices, deployed in a solution.
Table 2-1: Edge Technology

2.2 HYPER-CONNECTIVITYDX Technology: Hyper-Connectivity
Hyper-connectivity describes an environment of ubiquitous connectivity, often withspecialized functionality adapted to the demands of a particular application. Key technologies
from an IIC perspective include 5G Ultra-Reliable Low Latency Communications (URLLC),
Enhanced Mobile Broadband (EMB) and Massive Machine Type Communications (mMTC) inboth public and private networks and alternative Low Power Wide Area networks (LPWA)
technologies. Additional technologies include mesh networks, high altitude low orbit (HALO)
platforms and evolving Wi-Fi standards.
Key usage scenarios:•

5G URLLC allows wireless networks to be deployed to support critical and low latency
communications needs, such as wireless emergency-stop functionality for industrial
machines.
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Key Technologies Underpinning DX

DX Technology: Hyper-Connectivity••

The interworking of public and private 5G networks will allow for applications that work
seamlessly when roaming between campus and off-campus locations.
LPWA technologies will enable new IIoT applications by decreasing the cost of widearea connectivity and allowing for extended battery life.

Relevant IIC publications:•

Industrial Networking Enabling IIoT Communication (White Paper)

Opportunities for the IIC:••••

Determine how best to interwork public and private 5G networks, including support foredge computing applications.
Develop guidelines for how to develop power-efficient applications to maximize thepotential of NB-IoT.
Develop guidelines to identify the most suitable LPWA technologies in different
scenarios.
Profile the strengths and weaknesses of different connectivity alternatives in different
circumstances.
Table 2-2: Hyper Connectivity

2.3 DATA SECURITY
DX Technology: Data Security
Protecting sensitive data created, stored, and consumed by IIoT technology and applications is
one of the foundations of trustworthy 1 IIoT systems, itself one of the underpinnings of DX.
Data security is a property of being protected from unintended or unauthorized access, change
or destruction ensuring availability, integrity, and confidentiality. It falls under the broader
umbrella of data protection and encompasses several adjacent and overlapping domains, suchas data security, data integrity and data privacy. Data security covers a wide range ofprotection mechanisms such as key management, root of trust, authentication, access control
and audit & monitoring.
Key usage scenarios:•

1

Allows organizations to protect data-in-motion, data-at-rest and data-in-use to prevent
unauthorized access to such data and tampering with such data.

Refer to section 3 Digital Transformation and Trustworthiness for further details.

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Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Data Security•••

Plays a central role in the enablement of IoT trustworthiness and its characteristics:
privacy, reliability, resilience, and safety.
Prevents unauthorized tampering with data that could lead to safety incidents. The IEC
61508 1 standard applies to functional safety for electronic controllers used in industrial
IoT systems. Tampering with the system commands sent to such systems that
determine how the operating state of the system would change, can push the system
into a dangerous state.
Security can also affect the safety of systems that rely on software for safe operation.
Thus, this software must be protected throughout its lifecycle.2

Relevant IIC publications:
•
•
•
•
•

IoT Security Maturity Model (White Paper)
Industrial Internet Vocabulary (Technical Report)
Data Protection Best Practices (White Paper)
IoT Security Maturity Model (SMM): Practitioner's Guide (Technical Report)
Software Trustworthiness Best Practices (White Paper)

Opportunities for the IIC:••

Develop guidelines for how the IIC Security Maturity Model can be used to ensure theDX journey is not affected by security risks and threats.
Develop guidelines for how security can be used to ensure compliance with data privacy
requirements.
Table 2-3: Data Security

2.4 AI & ANALYTICSDX Technology: Artificial Intelligence and Analytics
The Merriam-Webster Dictionary defines Artificial Intelligence (AI3) as “a branch of computerscience dealing with the simulation of intelligent behavior in computers” and as “the capabilityof a machine to imitate intelligent human behavior”.

1

2
3

http://www.iloencyclopaedia.org/part-viii-12633/safety-applications/94-58-safetyapplications/electrical-electronic-and-programmable-electronic-safety-related-control-systems
As-written, in-delivery, at-rest, in-operation, end-of-support, and end-of-life.
https://www.merriam-webster.com/dictionary/artificial%20intelligence- 11 -

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Artificial Intelligence and Analytics
AI and analytics provide an enhanced ability to understand and learn from data; informationfrom IIoT systems provide a plethora of data that can be broken down and analyzed using AI
algorithms, allowing organizations to make more informed decisions.
Key usage scenarios:
•

•
•
•
•

The capabilities provided by AI lend themselves to convergence with other emerging
technologies in the pursuit of automated trust, immersive interfaces, hyperconnected
networks and working autonomy.
AI can provide accelerated feedback from IIoT field data for improvements inoperational processes and best practices.
Advanced analytics can allow organizations to find insights in extremely large sets ofdata (i.e., big data), providing increased quality and accountability.
AI algorithms can “learn” from previous experiences and adjust real-time to theenvironment.
Improved feedback loops from IIoT systems can allow for increased safety measuresand higher overall quality.

Relevant IIC publications:••

Industrial Internet of Things Analytics Framework (Technical Report)
Industrial Analytics: The Engine Driving the IIoT Revolution (White Paper)

Opportunities for the IIC:••••

Gain understanding of ethical decision-making during the implementation of AI in IIoT.
Research how risks, controls and the auditability of AI and analytics can be monitored
and controlled as they relate to IIoT.
Develop frameworks to provide guidance and assistance in the development,
documentation, communication, and deployment of AI in IIoT.
Establish how best to operationalize AI to ensure it works 24/7 across functions andbusiness units in coordination with other emerging technologies such as blockchain andextended reality.
Table 2-4: Artificial Intelligence and Analytics- 12 -

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

2.5 DIGITAL TWINSDX Technology: Digital Twin
A digital twin (DT) is “a digital representation of a real-world entity or system”, 1 including
attributes and behaviors, sufficient to meet the requirements of a set of use cases. The entity
in the definition of the digital representation is typically an asset, process or system. Digitaltwin information covers combinations of various data categories, such as:
•
•
•
•
•
•
•

physics-based models and data,
analytical models and data,time-series data and historians,
transactional data,
master data,visual models andcomputations.

Key usage scenarios:
•
•
•

•
•

Manufacturing: help with predictive maintenance, optimize operational efficiencies,and define asset maintenance strategies.
Energy & utilities: optimize operation in real-time and conduct real-time computations
on quality parameters.
Oil & Gas: subsurface well monitoring starting from the drilling stage to production,
maintenance, and abandonment stages. Enables assessment of cost saving strategies
and optimization of operation.
Mining: processing asset health data to optimize decisions on maintenance.
Process Automation: monitor relevant aspects of product status and assist with
detection of product quality issues.

Relevant IIC publications:••

Digital Twins for Industrial Applications (White Paper)
Journal of Innovation: November 2019

Opportunities for the IIC:••

1

Investigate opportunities for interoperability between different digital twins as well as
between digital twins and IoT systems.
Work with industry consortia and standards-setting groups to define best practices forinteroperability between digital twins and IIoT.

Gartner: https://www.gartner.com/en/information-technology/glossary/digital-twin- 13 -

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Digital Twin••

Investigate empowering role of digital twins in DX in Industry.
Liaise with the Digital Twin Consortium 1 (DTC) to ensure open channels for informationexchange and collaboration between the IIC and DTC.
Table 2-5: Digital Twin

2.6 DISTRIBUTED LEDGERDX Technology: Distributed Ledger Technology
Distributed ledger technology (DLT) provides a trusted, immutable ledger on whichorganizations can transmit and store valuable information based on internal operations orinteractions with the organization’s environment, including IIoT devices.
Key usage scenarios:•••

DLT is a shared ledger, meaning that each organization in a supply chain can always
view the most up-to-date version of the ledger with full confidence that noreconciliations will need to be made with other organizations in the supply chain.
DLT complements IoT by ensuring that IoT data flows and transactions are secured andshared across an ecosystem of participants, automating trust within the DLT
environment. In coordination with IoT and AI, DLT can validate the authenticity of data,
verify identities, and enable secure, multi-party transactions.
Information in DLT is considered tamper-resistant, 2 this implies that the undetected
alteration of data within the ledger is nearly impossible. Permissions to view data
within the ledger, as well as the ledger itself, can be customized to each situation.

Relevant IIC publications:••

Distributed Ledgers in IIoT
Implementation Aspect: IIoT and Blockchain

Opportunities for the IIC:
•
•

1
2

Investigate opportunities for interoperability between different distributed ledgers aswell as between DLT and IoT systems.
Work with industry consortiums and standards-setting groups to define best practices
for interoperability between DLT and IIoT.

https://www.digitaltwinconsortium.org
Advances in quantum computing can weaken the effectiveness of encryption mechanisms.

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Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Distributed Ledger Technology•

Research best practices to balance decentralization, security and scalability as they
apply to DLT in IIoT.
Table 2-6: Distributed Ledger

2.7 HUMAN-MACHINE INTERFACEDX Technology: Human Machine Interface
Human-machine interfaces (HMIs) are combined hardware and software components thatenable humans to interact with machines by inputting information to trigger outputs; theycome in many forms, from simple buttons to complex graphical displays. Here, HMI refers tonovel interfaces that have yet to become mainstream in industrial settings—such as
augmented reality (AR) displays in which a person’s physical environment is enhanced with avisual or audio “overlay,” or virtual reality (VR) headsets that enable humans to immersethemselves completely in computer-generated environments.
Key usage scenarios:•

AR and VR can provide effective and cost-efficient job and soft-skills training.
o AR can enhance learning by providing users with additional tools (e.g., overlay of
blueprints, workflows or checklists) or communications (e.g., voice and video
connectivity to remote experts) to help them complete their tasks.
o VR simulations can enable learners to practice both tactical and soft skills until
they are mastered.

•

Digital twins of objects, manufacturing floors, entire factories or construction sites canbe created using real-time data and imagery collected by IoT devices and mixed reality(XR) technologies. This enables activities like remote quality assurance or monitoring.
AR imagery constructed from real-time data from IoT devices can inform businessstrategy and decision making (e.g., civic planning, law enforcement and crisis
management).

•

Relevant IIC publications:•••Intelligent Realities for Workers Using Augmented Reality, Virtual Reality and Beyond(Journal of Innovation)
Artificial and Human Intelligence with Digital Twins (Journal of Innovation)
The Digital Transformation of Workers' Realities (Webinar)- 15 -

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Human Machine Interface
Opportunities for the IIC:•••

Develop controls and best practices for maintaining security and trust related to IoT-XR
devices and equipment.
Research how IIoT and XR can converge to provide value in business settings.
Develop thought leadership about how autonomous IIoT devices can generate
additional value through well-designed HMI.
Table 2-7: Human-Machine Interface

2.8 ADDITIVE MANUFACTURING
DX Technology: Additive Manufacturing 1
Additive manufacturing technology changes the way things are made by turning a digital threedimensional design into a physical object by adding layers of material successively. Raw
materials are typically plastics and other polymers, metals or ceramics and may be in the formof a liquid, powder or a sheet.
Key usage scenarios:
•
•

•
•

•

•
•

1

Economical production of mass personalized products enabled by extreme flexibility ofcustomization of manufactured goods.
Manufacturing complex parts in a single process reduces manufacturing cost, improves
quality, and simplifies supply chains (by reducing the number of components). Throughinnovation, manufacturing in a single process can also lead to products with complex
designs that are impossible to produce using traditional methods.
‘Hybrid manufacturing’ combines automated machines with additive manufacturing:e.g. tool production lines with robots and 3D printers together.
Multi-modal factory that can produce a diverse range of products, going beyond aboundary of an industry: e.g. additive production lines for automobile components thatcan produce a medical device.
Additive manufacturing for faster development processes integrated with
manufacturing through directly making a physical object as a physical representationof a virtual design of digital twin in real time.
Usage item: prototypes, models and tools, components, jig and fixtures.
Applied industries: automotive, aerospace, defense, medical devices, jewelry casting
and buildings, batteries, transistors, and LEDs.

Prepared in collaboration with Ilyong Jung (GE additive Korea).

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Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Additive Manufacturing 1
Relevant IIC publications:•

N/A

Opportunities for the IIC:
•

•
•
•
•

User industry driven thought leadership or test beds on next generation factory driving
digital transformation of user firms: some relevance with Smart Factory Web andAutomated Negotiation test beds.
Interoperability of additive manufacturing with security and IoT enabled manufacturingmodels.
Test beds or test drives or challenges utilizing additive manufacturing platforms toensure interoperability.
Develop frameworks for management of IP in a distributed additive manufacturingcontext.
Develop guidelines for type-approval for additive manufactured objects.
Table 2-8: Additive Manufacturing

2.9 DATA SHARINGDX Technology: Data Sharing
Data sharing is the ability to share IoT production and operational data across ecosystems andsupply chain partners. The data may be also monetized with third parties. Data sharing cansometimes be the main driver for an IoT project. The sharing of IoT data must be done incompliance with mandatory obligations (legal and regulatory), 1 and in accordance with dataprotection requirements: privacy, confidentiality, IP, ownership, best practices, etc., as applied
to data-at-rest, data-in-motion and data-in-use.
The reasons for sharing of data across an ecosystem may be vary. Data may have:
•
•
•

1

intrinsic value that can be monetized,
research value andhistorical value.

Example Privacy, such as GDPR (EU) and CCPA (California)- 17 -

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Data Sharing
Key usage scenarios:•••

Smart Cities: share infrastructure data and traffic data across the city ecosystem (smart
city exchanges).
Oil & Gas: share operational data across entities in the supply chain.
Manufacturing: share equipment operational and maintenance data with OEMs andoperators.

Relevant IIC publications:••

Data Protection Best Practices (White Paper)
IoT Security Maturity Model (SMM): Practitioner's Guide (Technical Report)

Opportunities for the IIC:•••

Develop guidelines for how to develop data sharing policies across an ecosystem.
Develop guidelines for how security can be leveraged to ensure compliance with data
privacy (and data sharing) requirements.
Develop frameworks and protocols for the documentation of shared data, so that data
can be interpreted by relevant parties in context. Liaise with the Digital Twin
Consortium on this topic.
Table 2-9: Data Sharing

2.10 IIOTDX Technology: IIoT
IIoT is a core technology in the fourth industrial revolution. It refers to the extension and useof sensor-driven internet of things to non-consumer applications (see below). IIoT systems
connect and integrate the edge with enterprise systems, business processes and analytics.
Key usage scenarios:••••

Smart manufacturing systems that optimize production and minimize unplanned
shutdowns through predictive maintenance.
Medical: connected medical devices, remote patient monitoring, cooperation between
healthcare providers, etc.
Smart infrastructure: mobilize, monitor, and manage operation of utilities, gas, water,roads, buildings, power grids, etc.
Intelligent transportation systems: package logistics (air, sea, land), autonomousvehicles, internet of logistics, navigation, traffic management, public transportmanagement, pay-as-you-drive insurance and parking, etc.
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Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: IIoT
Relevant IIC publications:••

Common Logical Data Model: Basis for Global ITS Innovation (Journal of Innovation)
Creating the Internet of Logistics (Journal of Innovation)

Opportunities for the IIC:•••

Investigate and define opportunities for interoperability between different connected
systems (potentially use case dependent).
Work with industry consortia and standards-setting groups to define best practices forsuch interoperability.
Investigate impact of ITS on the digital transformation of smart cities.
Table 2-10: IIoT

2.11 AUTONOMOUS ROBOTIC SYSTEMSDX Technology: Autonomous Robotic Systems
Autonomous robotic systems enhance human productivity in areas ranging from autonomousvehicles to unmanned drones and from manufacturing robotics. It allows a device to perform
its tasks without requiring human control or oversight. Autonomous robotic systems are
particularly beneficial in situations that require the remote operation of devices in real-time, 1e.g. for protecting human worker safety or avoiding hash or hazardous work environment, or
applications that require greater speed and precision than humans can provide.
Key usage scenarios:
•
•
•
•
•
•

Transportation, including autonomous vehicles and other passenger vehicles.
Automated distribution, delivery, and warehousing.
Unmanned Aerial Vehicles (UAVs) used in multiple deployment scenarios, including site
and asset surveying.
Manufacturing and production line processing robots.
Automated operations in agriculture.
Precision robotics in healthcare

Relevant IIC publications:
•

1

N/A

Example: dangerous locations.

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Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Autonomous Robotic Systems
Opportunities for the IIC:•••

Define the landscape of emerging autonomous robotic systems.
Establish how, and in what contexts, autonomous robotic systems can benefit industry.
Analyze trustworthiness in the context of autonomous robotic systems and develop amapping between trustworthiness in the context of an automated system and existing
IIoT frameworks.
Table 2-11: Autonomous Robotic Systems

2.12 INNOVATION AT THE IT/OT BOUNDARYDX Technology: Innovation at the IT/OT Boundary
The boundary between the digital and physical world is delineated by IoT device—actuatorsthat can change properties in the physical world in response of information and sensors thatobserve properties in the physical world and convert them into information.
Innovations around sensors and actuators enhance the usage of existing operational
technology or provides new purposes and markets.
Core innovations are:
•
•

•

•

1

2
3

4

Sensors on a single chip including wired or wireless digital communication forminiaturized usage.1
Sensors with wireless digital communication, taking the complete power supply via astamp-sized antenna from existing Wi-Fi and cell phone signals, replacing “dumb”
passive RFID tags.2
Single-chip sensor cameras and microphones receiving and locally processing complex
pictures and sound pattern instead just single signals to detect specific analog status
variations. 3
Micromechanical actuators permit executions in the physical world, direct connectedwith wired or wireless digital communication.4

Multidisciplinary Digital Publishing Institute (MDPI), “sensors“, special issue “on-chip sensors”,
https://www.mdpi.com/journal/sensors/special_issues/on-chip-sensors
A non-battery Bluetooth solution is developed by Wiliot, https://www.wiliot.com/
AT&T replaces IoT sensors with cameras, https://enterpriseiotinsights.com/20171102/news/att-seesvideo-replacing-lower-bandwidth-iot-traffic-tag4
Technology Brief 15 Micromechanical Sensors and Actuators,
http://cad.eecs.umich.edu/techbriefs/tb15.pdf- 20 -

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Innovation at the IT/OT Boundary•

A new generation of industrial machines are being built as Cyber-Physical Systems(CPS), in which computational capabilities and physical capabilities are co-designed, cotested and co-verified, and co-manufactured so that these capabilities are fused
together by-design, rather than the conventional approach by which computational
capabilities are more or less an after-thought add-on to the physical machines. CPS has
unprecedented ability to control, monitor, adapt, enhance, extend and upgrade thecapability of the machines by software. CPS fuses the digital and physical world andblurs the boundary between them.

Key usage scenarios:••

Sensors and actuators implanted into humans and animals to detect sickness or replacedamaged organs, like pacemakers but in greater variety.
Sensors and actuators with wireless communication on movable parts, for example todetect and correct degradation in gears or hydraulic systems, like tire-pressure warning
systems in today’s cars, but in greater variety.

Relevant IIC publications:•

N/A

Opportunities for the IIC:•••

Define the landscape of innovation at the edge, a unique aspect of digitaltransformation in industrial systems.
Follow inventions in research centers and the development of products by startup
companies.
Analyze the effect of edge innovation on trustworthiness in the context of automatedsystems and existing IIoT frameworks.
Table 2-12: Innovation at the IT/OT Boundary

2.13 MICROPOWER GENERATION FOR IIOT END DEVICES - ENERGY HARVESTINGDX Technology: Micropower Generation-Energy Harvesting
Incorporating wireless technology into IIoT solutions results in highly distributed solutions
where some components may be in remote areas that are physically inaccessible, or
hazardous. IoT devices may be connected to movable parts1 that cannot have wired power
supply.

1

An example is a pressure sensor in a car tire–any wired power supply is not possible.

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Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Micropower Generation-Energy Harvesting
Batteries have several downsides. The lifetime is always limited, especially with traditional
batteries self-discharging over time, and, with chemical liquid processes, a guaranteed lifetimeis hard to ensure. Rechargeable batteries can be refilled via environment power from sources
such as solar cells, wind or heat, but again due to chemical liquid processes, the number ofguaranteed charging cycles is hard to predict.
Core Innovations are:••••Solid-state batteries without liquids have a higher and better predicted lifetime ornumber of charging cycles.1
High-density electrical capacitors have a higher number of predicted charging cycles.2
Energy harvesting from Wi-Fi and cell phone signals via antenna can replace batteries
in some cases.3
Bioelectrical processes that create energy from microorganisms.4

Key usage scenarios:
•
•
•
•
•
•

Pipelines: power for remote sensors and actuators.
Smart Cities: solar panels for smart light poles.
Transportation: generate power from wasted engine heat to improve efficiency.
Building and Structures: detecting damage on concrete and steel by embedded sensors.
Medical: power for body-embedded devices (including sensors) in Wireless Body Area
Networks (WBAN) beyond what batteries can provide in autonomy and power density.
Devices on movable parts to detect status changes around damage, degradation, cracks
etc.

Relevant IIC publications:•

N/A

Opportunities for the IIC:
•
•

1
2

3
4

Define the landscape of new emerging micropower generation technologies.
Establish how and in what contexts, micropower generation technologies can benefit
industry.

https://en.wikipedia.org/wiki/Solid-state_battery
https://www.arrow.com/en/research-and-events/articles/supercapacitor-vs-battery-ultracapacitorpros-and-cons
A non-battery Bluetooth solution is developed by Wiliot, https://www.wiliot.com/
https://www.sciencedirect.com/topics/agricultural-and-biological-sciences/bioelectricity- 22 -

Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Micropower Generation-Energy Harvesting•

Analyze the impact of micropower generation technologies on the trustworthiness of
automated systems and existing IIoT frameworks (especially regarding reliability,
resilience and safety).
Table 2-13: Micropower Generation–Energy Harvesting

2.14 SERVITIZATIONDX Technology: Servitization
Servitization is not a new technology, rather it is a new and fast-emerging application of othertechnologies discussed in this section. Most critically, it relies on IoT and Hyperconnectivity,
but also often Artificial Intelligence and Data Sharing.
It includes a range of concepts related to supplying hardware as a service so that end users
may not need to purchase the servitized equipment or may benefit from associated services
from the equipment provider. Often servitization is implemented as part of a pay-as-you-go
commercial model, often including pre-emptive maintenance and with performancecommitments underwritten by a supplier.
Key usage scenarios:••••

Charging end users for equipment (and associated consumables) on the basis of usage.
Remote and pre-emptive maintenance of equipment.
Remote sale and activation of enhanced capabilities through software updates, orsoftware configuration changes.
‘Outcome as a service’, where companies sell a certain result rather than theequipment to achieve that result.

Relevant IIC publications:•

N/A

Opportunities for the IIC:•••

Develop a framework for analysis of the benefits of servitization from a manufacturer
perspective, and also from an end user perspective.
Develop guidelines to establish the equipment types that will most benefit fromservitization.
Establish frameworks for assignment of maintenance responsibilities for servitizedequipment between end users and suppliers, including considerations of tools (such asAI) that may support shared maintenance support.

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Digital Transformation in Industry White Paper

Key Technologies Underpinning DX

DX Technology: Servitization••

Liaise with the Digital Twin Consortium (DTC) to ensure alignment between the needsof servitization and ongoing DTC work.
Analyze the commercial implications of servitization including tax, financing, insurance,and risk management and also the impact on secondary markets for equipment (andparts).
Table 2-14: Servitization

2.15 TECHNICAL PLATFORMS FOR NEW BUSINESS MODELS AND PAYMENT METHODSDX Technology: Technical Platforms for New Business Models and Payment Models
Traditionally industrial components are sold as physical goods before their usage. But by
connecting such components to the internet, the component provider can track component
usage exactly. This permits business and payment models for such components similar to what
we have today with software components in the cloud and on premise. Such arrangements
will be supported by a new concept that the IIC terms an Industrial Internet Monetization
Model (I²M²) platform.
Complete industrial systems are a collection of components based on a specific setup.
Therefore, such business models and payment models can be expanded to whole systems
including the system integration work.
Such business models and payment organizations include:
•
•
•
•
•
•

Leasing/subscription: a component is paid in frequent intervals, for example monthly,
during the time of the usage.
Feature on demand: a component part is not paid until it is required for the first time.
Pay per use: the component or specific features are only paid for if they are used.
Revenue and profit sharing: The provider of the component is paid depending on
specific business value the component provides to the user.
Freeware: core features are free; only advanced features are sold.
Trialware: specific features can be tried for a limited time for free before the user ischarged.

Key usage scenarios:•••

Reducing upfront payments for risky industrial systems with the opportunity for future“share of success” of the component deliverer.
Setup of industrial systems that cannot be realized today due to high investment risk
and lack of funds.
Repeated revenue of component deliverers during the full lifetime of the component.
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Digital Transformation in Industry White Paper

Digital Transformation and Trustworthiness

DX Technology: Technical Platforms for New Business Models and Payment Models•

Active lifetime business relationship between component manufacturer and user.

Relevant IIC publications:•

I²M²—the Future of Industrial System Monetization, Journal of Innovation March 2018 1

Opportunities for the IIC:•••

Refining specific business processes around IIoT systems.
Presenting and discussing new business and payment models to component
manufacturers, system integrators, payment processors and end users who operateindustrial systems.
Preparing work for standardizing the automatic installation, processing andmanagement of new business and payment models
Table 2-15: Technical Platforms for New Business and Payment Models

3 DIGITAL TRANSFORMATION AND TRUSTWORTHINESSThe word “trustworthy” is an adjective that describes the quality of an object: a person, an
organization, a system and so on. We cover trustworthiness here as it applies to IoT-enabled
systems in the context of digital transformation.

3.1 WHAT IS TRUSTWORTHINESS IN IOT?
IoT technologies are a foundation stone of digital transformation. IoT technologies must be
trustworthy so they can enable a DX journey using the techniques and approaches below.
Trustworthiness of IoT-enabled systems is the degree of confidence that an IoT system will
perform as expected with characteristics including safety, security, privacy, reliability andresilience in the face of environmental disturbances, human errors, system faults and attacks.
Individuals and organizations are increasingly aware of how data is used and protected, leading
to increased regulation and social standards around trustworthiness.

1

https://www.iiconsortium.org/news/joi-articles/2018March_IIoTFuture_Industrial_System_Monetization_Wibu.pdf- 25 -

Digital Transformation in Industry White Paper

Digital Transformation and Trustworthiness

Figure 3-1: Convergence of IT-OT and IoT Trustworthiness–source IIC

3.2 IOT TRUSTWORTHINESS REQUIREMENTS
An IoT system is trustworthy if it meets the minimum requirements for each of the fivecharacteristics as defined above. These minimum requirements are in some cases mandated bylaws, regulations, standards, and industry-accepted best-practices. These requirements areapplicable throughout the lifecycle of an IoT system.
Privacy and safety examples of regulatory constraints include EU GDPR privacy laws or OSHA
workplace safety standards. Reliability and resilience are often driven less by laws than bycompetitive forces, though some are heavily regulated, such as aerospace or healthcare. Most
organizations should strive to remain at, or above, the minimum requirements for each of thefive factors to ensure that they comply with regional requirements and industry best practices.
Beyond this minimum level, enterprises can establish higher targets for trustworthiness basedon corporate vision, roadmap, and market positioning.
Figure 3-2 below depicts the trustworthiness states of an example IoT-system: current (red),minimum (blue) and target (green). In this spider diagram, the current state of safety for thatexample system appears to meet the minimum requirements while the other characteristics oftrustworthiness, namely security, privacy, reliability and resilience fall short.
Security

Current State• Actual state as it exists now• May change over �me

Privacy

SafetyResilience

Reliability

Minimum State (external drivers)• Min non-nego�able and mandated level• Laws, regula�ons, standards, bestprac�ces, etc.
• Jurisdic�onal varia�ons
Target State (internal drivers)• Objec�ve level to achieve• Alignment with corporate vision, ROI,
risk, etc.

Figure 3-2: Different Trustworthiness States–source IIC- 26 -o Laws, Regulations
o De-Jure Standards

o Best Practices
o Example: OSHA 29 CFR 1910, IEC

61508, EU GDPR, CCPAo Corporate vision & mandateo Competitive positioningo Strategy for risk reductionso Technical Roadmap

Digital Transformation in Industry White Paper

Digital Transformation and TrustworthinessIn IoT trustworthiness, the consequences of “acting badly” (red line falling short of the blue line)
can include the loss of human life, negative long-term impact on the environment or theinterruption of critical infrastructure, and the unintended disclosure of sensitive data,
destruction of equipment, economic loss and reputational damage.

3.3 IMPACT OF TRUSTWORTHINESS ON DIGITAL TRANSFORMATION
These negative consequences can put a digital transformation journey at risk. A lack oftrustworthiness may mean that windows of opportunities in the market may be missed forever,placing the organization at a disadvantage vis-à-vis its competitors.
Even with the benefits associated with achieving baseline levels of trustworthiness, too muchtrustworthiness is not always a net-positive for an organization, as listed below:
Trustworthiness Characteristics

Possible consequences of excessive emphasis

Security

Increased costs, loss of agility and reduced usability.

SafetyReduced solution flexibility, more complex processes andreduced productivity.

Reliability

Excessive capital and maintenance costs; reduced usability.

Resilience

Excessive capital and maintenance costs, reduced flexibility
and functionality.

Privacy

Unnecessarily cumbersome processes.

Therefore, there are often compromises made between the risk of underinvesting intrustworthiness efforts and the consequences of overinvesting in it. Putting trustworthiness inthe context of a business case often highlights trade-offs, as illustrated in figure 3-3 below.
This example relates to a small batch assembly line for electronic boards. The nature of thisprocess is such that the assembly machines may need to be recalibrated and reconfigured
between different batches. Slowing down the assembly line may reduce the risks personnel injury
and levels of equipment wear and tear, and it may reduce productivity and profits 1.

1

Refer to the Managing and Assessing Trustworthiness for IIoT in Practice whitepaper
https://www.iiconsortium.org/pdf/Managing_and_Assessing_Trustworthiness_for_IIoT_in_Practice_Whitepaper_2019_07_29.pdf- 27 -

Digital Transformation in Industry White Paper

Digital Transformation and TrustworthinessChange Factors
Processchanges

Policymodiﬁcations

System andconﬁguration changes

Impact-Business Criteria

Any otheractionAdjustment++

Trustworthiness Criteria
SafetyOpera�on performance criteria-

Business Impact

Resilience

Trustworthiness Impact
Reliability++

Business performance criteria

Security
Privacy

Industrial IoT System

Figure 3-3: Example of Trustworthiness Analysis–source IIC

Of course, there can be financial benefits associated with investing more in trustworthiness:
•
•
•
•
•
•
•

reduced number of compensatory payments to customers for failures,
reduced legal and regulatory risk and of fines for non-compliance with regulations,
reduced reputational risk,increased sales and revenue due to stronger brand image,reduced costs of business insurance,
reduced costs of funding for non-determined risks andincreased shareholder-value.

The main challenge and goal are to identify an ‘optimum’ balance of trustworthiness as definedby an organization’s current state, minimum requirements, and target state. This optimization
approach also applies to the organization’s entire digital transformation effort and to the overall
trustworthiness strategy and associated level of investment.1

1

Refer to the Managing and Assessing Trustworthiness for IIoT in Practice whitepaper
https://www.iiconsortium.org/pdf/Managing_and_Assessing_Trustworthiness_for_IIoT_in_Practice_Whitepaper_2019_07_29.pdf- 28 -

Digital Transformation in Industry White Paper

Context for the DX Journey

4 CONTEXT FOR THE DX JOURNEY
Digital transformation is a strategy that requires a “by design” approach and way of thinking(rather than “by accident”). We provide context for the role of innovation in DX and theorganizational changes that such transformation requires.

4.1 ROLE OF INNOVATION IN DIGITAL TRANSFORMATION
An industrial organization needs to set up innovation processes that are different from existingprocesses in several ways, including:
•
•
•

•

This process includes exploring feasibility of applying new technologies, integrating IT andOT and the creation and operation of solutions that combine OT and IT.
The process is a “fast” process based on building a “minimum viable product”, inheriting
the traditions of lean start-up, design thinking and BizDevOps. 1
An “open” process of innovation dealing with the complexity of integrating OT and IT,
enabled by cooperation among different divisions and different firms (including IT and OT
organizations). With extensive use of IT, leveraging connected things and people, theprocess should enable open interaction with partners, customers and suppliers in IT and
OT domains. In the “open” process, the IT & OT organizations learn each other’s domain
knowledge and understand each other’s constraints, problems and discover collaboration
issues for solving the problems.
Optimized processes for creating solutions for customers, delivering better customer
experiences and/or outcomes, leveraging connected things and people including
customers, which can be achieved with a customer centric mind set.

Important: The innovation processes are continually vulnerable to resistance from both OT and
IT organizations and are likely to conflict with incumbent processes and organizational
structures and other aspects of existing management systems.
The process change is made possible by creation and diffusion of innovation tools (for example,
GE’s FastWorks2) for ‘fast, open and efficient’ innovation processes integrating IT and OT. The
diffusion of tools can be facilitated by removal of conflicts of new innovation processes withincumbent management systems including incumbent processes, organizational structures,
employee evaluation system, cultures and innovation funding system through changes of the
management system.

1

2

BizDevOps is a collaborative culture which enables a new model of operating (business, operations andtechnology together) to produce superior products and services through an automated pipeline (PwC)
https://www.digitalpulse.pwc.com.au/bizdevops-competitive-advantage/https://www.gartner.com/smarterwithgartner/why-big-companies-need-lean-startup-techniques/- 29 -

Digital Transformation in Industry White Paper

Context for the DX Journey

The changes lead to gradual progress in digital transformation. Digital transformation can thus
be achieved by accumulating results from ongoing innovation initiatives exploring new value
propositions. Better customer experiences and outcomes gradually emerge from the integrationof IT and OT, with a customer-centric mind set to leverage connected things and people.

4.2 THE DIGITAL TRANSFORMATION PROGRAM
Digital transformation is not a project. It is strategy, and a journey, led by a vision, powered by acommitted program, which in turn is a set of related activities with long-term aim.
The DX program must have a well-defined objective, charter, mission, and governance structure.
The program must also be guided by a cross-functional team with a clear leader and a corporate
sponsor, with active participation from several cross-functional stakeholders (figure 4-1) who
must work together in a structured way to achieve the better outcomes.
Moun�ng Challenges
Higher Process Eﬃciencies
Disrup�ve Innova�on
Moun�ng Market Pressures
Growing Regulatory Pressures
Exponen�al Growth of Big Data
Evolving Demographics

Digital Transforma�on JourneyCxO Sponsorship

Corporate

BusinessBe�er Outcomes
New business models
New partnership models
New opera�onal models
New service models

DesignDigital Transforma�on Program
Team (cross-func�onal)

Implementa�on

Opera�ons

Field Services

Technology

Security

Figure 4-1: Cross-functional Digital Transformation Program Team–source IGnPowerThe DX program corporate sponsor directs the DX program team leadership to achieve the DX
objectives and empowers it with authority, resources, and funding. Depending on theorganization, this individual may have a CxO title, such as CEO, CDO (Digital), CMO, COO, CIO, etc.
The DX program team leader leads the DX program and reports (may be dotted line) to thecorporate sponsor. The type of organization, industry and scope of digital transformation affects
from which group the leader comes. The team leader must maintain a communication strategy
with the corporate sponsor and the various stakeholders of the DX program:
•
•
•
•
•

progress of the DX program and projects within it,
coordination and alignment of activities by different stakeholders,value being delivered by the DX program to individual stakeholders,challenges facing the program and its projects andplanning of program and project activities.
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Digital Transformation in Industry White Paper

Context for the DX Journey

The DX program team directs and supervises the DX program. It is tasked, empowered, and madeaccountable for delivering the concrete “output” and tangible “business benefits” of the
program. The team brings together multiple stakeholders that come from siloed communities
with their own budgets, reporting structure, techniques, assessment practices, standards, andregulations), based on considerations such as:
•
•
•
•
•

type of organization and industry,
drivers and urgency levels behind the transformation,competitive landscape,nature of the disruptive technologies enabling the transformation andscope of expected better outcomes.

One of the main responsibilities of this team is to market the value of DX strategy to the different
DX stakeholder groups in the organization effectively.
Moreover, the DX program may involve several IIoT projects. Each project may have its own setof stakeholders and expectations. It is the responsibility of the DX program team to coordinate
with the various IIoT project teams to ensure that the projects remain aligned with the DX
strategy and continue to deliver the benefits to the organization intended by that strategy.
Note: Some organizations have an established Chief Digital Officer role (CDO). This individual
may be the corporate sponsor of the DX program or the leader of that team.

4.3

DX PROGRAMS AND IIOT PROJECTSThe organization’s journey of digital transformation in industry may involve the implementationof multiple IIoT technology projects that can enable and, in some cases, drive the transformation
sought. These projects must support, within their requirements and the definition of theirdeliverables, the ability to address the mounting challenges and achieve the desired better
outcomes (figure 4-2).
Moun�ng Challenges
Higher Process Eﬃciencies
Disrup�ve Innova�on
Moun�ng Market Pressures
Growing Regulatory Pressures
Exponen�al Growth of Big Data
Evolving Demographics

Digital Transforma�on Journey

IIoT System 1

IIoT System 2Be�er Outcomes
New business models
New partnership models
New opera�onal models
New service models

IIoT System n

Figure 4-2: Digital Transformation Programs and IIoT Projects–source IIC- 31 -

Digital Transformation in Industry White Paper

First Steps for Adoption

For IIoT projects that are already under way when the digital transformation strategy is defined,
the scope of these projects must be reviewed to analyze, assess and perhaps adjust their scope
to maximize their impact and contribution to the digital transformation strategy.

5 FIRST STEPS FOR ADOPTION
Digital transformation is a type of disruption. It will unlock new possibilities in business models,value propositions and operational efficiency. Competitive dynamics will ensure that entire
industries must transform to become a market leader or keep pace with market leaders, or faceloss of market share. As ever, this kind of disruption is not risk-free.
The key is to minimize the attendant risks. Our recommended approach is that industry users
follow the ‘First Steps for Adoption’ framework, shown in figure 5-1, and discussed below.
Find out what theleaders in yourindustry are doing.

Inves�gate
developments incomparable
industries.
Iden�fy your key
use cases.
Deduce which DX
technologies aremost relevant toyou.
Iden�fy key
vendors.
Plan fordeployment.

Figure 5-1: First Steps for Adoption Framework–source Transforma Insights

5.1 FIND OUT WHAT THE LEADERS IN YOUR INDUSTRY ARE DOING
The first question is to determine what your competitors are doing, since competitor actions arelikely to be the source of the most immediate threats and risks.
Unless you are the established technology market leader in your industry, then the most effective
strategy is usually that of a ‘fast follower’. The advantages of a fast follower strategy are a
combination of reduced risk (only matching competitor initiatives that seem likely to be effective)
and speed (taking action quickly, before any initiatives that competitors have undertaken havebeen able to have a material market share impact).

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Digital Transformation in Industry White Paper

First Steps for Adoption

5.2 INVESTIGATE RELEVANT DEVELOPMENTS IN COMPARABLE INDUSTRIES
Next, research digital transformation initiatives in comparable industries, and assess thepotential impact of these for your own situation. While many industries might at first appear tobe fundamentally different, there may be digital transformation approaches and solutions being
pioneered in one that are potentially relevant to another. Examples include:•••

solutions to support the management of construction machinery on building sites,
providing insight into the best approach for managing the availability of medical devices
in medical environments,
facial recognition and people-tracking solutions used in the public sector can be adapted
for use in arts & entertainment industries, or in retail parks andthe advent of pay-as-you-drive insurance solutions supporting shared-car propositions,providing lessons learned for warranty management when offering goods-as-a-service.

Another approach is to identify projects in other industries that have in some way faced ‘similar’
challenges to those at hand. For instance, if you are planning to roll out multiple-millions ofdevices into a highly regulated market, then analysis of others who have already overcome thesechallenges might yield useful lessons.
The range of possibilities for cross-pollination of digital transformation ideas between industries
is endless. This kind of analysis can provide a ready-made list of best practices drawn from acrossall industries, and can provide insight into the likely future development of any given industry.

5.3 IDENTIFY YOUR KEY USE CASES
Benchmarking research has focused on analyzing real-world digital transformation projects, butthese can be aggregated to a generic ‘use case’ level. For instance, multiple competitors might
be working on fleet management solutions. But what is most relevant to you in planning yourown solution is the generic capabilities and benefits that fleet management solutions can unlock
rather than the detail of any specific case study.
The approach is for the end-user to develop a vision of their own fleet management solution,
informed by the lessons learned and results achieved from the identified case studies.

5.4 DEDUCE WHICH DIGITAL TRANSFORMATION TECHNOLOGIES ARE MOST RELEVANT TO YOU
The next step is to identify which are the critical enabling technologies for the identified use
cases. Continuing with the fleet management use case, key technologies would be IIoT, edge
computing and AI. An industry user must develop some familiarity with these underlying
technologies, as it will make future interaction with the vendor community more efficient andeffective.

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Digital Transformation in Industry White Paper

First Steps for Adoption

5.5 IDENTIFY KEY VENDORS
Many technology vendors have broad experience of digital transformation in a range of verticals.
But the key vendors for an individual industry user will have deep knowledge of the technologies
most relevant to the user in question, and extensive experience of that users’ industry. Ideally,
key vendors will also have experience across multiple geographies, so that ‘lessons learned’ fromone geography can be more readily ported to the users’ home geographies.
Many large vendors will offer extensive educational documentation, together with independent
analyst and consulting publications identifying opportunities, sharing best practices and lessons
learned from case studies. Many leading vendors will also offer ‘experience centers’ where newtechnologies can be tried in an environment that is supported by the vendor, and with easy
access to vendor expertise.
It is critical for any end user considering the deployment of DX solutions to identify their own key
vendors, and to build strong relationships with them.

5.6 PLAN FOR DEPLOYMENTThe IIC has a range of resources that help planning for next steps, including framework
publications (for example the Business Strategy Innovation Framework 1), technical publications(for example the Introduction to Edge Computing in IIoT white paper), and web tools available
via the Resource Hub. 2
Additionally, the Accelerator Program has testbeds, test drives and challenges that aretechnology-, solution- and application-focused respectively.

12

https://www.iiconsortium.org/BSIF.htm
https://hub.iiconsortium.org/homepage- 34 -

Digital Transformation in Industry White Paper

Acknowledgements and Legal

6 ACKNOWLEDGEMENTS AND LEGALThis document is a work product of the Industrial Internet Consortium Digital Transformation
Working Group, co-chaired by Jim Morrish (Transforma Insights), Dirk Slama (Bosch) and Bassam
Zarkout (IGnPower).
Editors:••

Jim Morrish (Transforma Insights)
Bassam Zarkout (IGnPower)

Authors (in alphabetic order):
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•
•
•
•
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Marcellus Buchheit (Wibu-Systems)
Alex Ferraro (PwC)
Chaisung Lim (Korea Industry 4.0 Association)
Shi-Wan Lin (Yo-i Information Technologies, Ltd.)Jim Morrish (Transforma Insights)
Bassam Zarkout (IGnPower)

Technical Editor: Stephen Mellor (IIC staff) oversaw the process of organizing the contributions of

the above Authors and Contributors into an integrated document.

Copyright © 2020, Industrial Internet Consortium, a program of the Object Management Group ©.

All copying, distribution and use are subject to the limited License, Permission, Disclaimer andother terms stated in the Industrial Internet Consortium Use of Information – Terms, Conditions& Notices, as posted at http://www.iiconsortium.org/legal/index.htm#use_info. If you do not
accept these Terms, you are not permitted to use the document.

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