Virtually every company claims to be on a journey toward digital transformation.
IDC predicts that by the end of this year, two-thirds of CEOs at Global 2000 enterprises will have digital transformation at the heart of their corporate strategy. Most current digital transformation initiatives are being led by consulting firms and on average take five years to deliver business value.
So, what is digital transformation, anyway?
At the broadest level, digital transformation is the digitization of critical decisions in every major decision flow across the enterprise, where employees manage, operate and maintain the assets and workflows of companies. In other words, digital transformation is complete when every decision flow in the organization is powered by digital knowledge, which is a network of models. This network of models turn human expertise and data from across silos into digital knowledge and provides actionable recommendations to help employees make faster and better decisions.
A typical Fortune 500 company will need to rapidly build a network of thousands of models for the top high-impact assets and decision flows of their enterprise.
The fundamental difference when driving digital transformation with digital knowledge is speed, enabling companies to complete transformation in two years vs. five years.
What’s the missing piece?
Today Fortune 500 companies spend tens of millions of dollars over five years to achieve digital transformation, yet there is a critical part missing in these current initiatives. At the largest corporations in the world, the wealth of knowledge resides with the employees who are experts at operating some of the most sophisticated equipment and operations in the world. That knowledge does not reside in data. It resides in various workflows, documents, notes and systems across the enterprise and only the subject matter experts know where they are.
Analyzing data is an important part of the digital transformation, but only when the most relevant data from across the enterprise is combined with human expertise will it lead to tangible business transformation.
Turning Human Expertise and Data into Digital Knowledge
Digital Knowledge Technology mathematically models not only data, but most importantly human expertise and creates a network of models that provide actionable recommendations on key decisions flows to help subject matter experts make better and faster decisions.
The most innovative companies are quickly creating digital knowledge, transforming their business at a much faster rate and gaining a competitive advantage. These includes the biggest oil and gas companies in the world such as Saudi Aramco, Shell, and Chevron as well as Maersk the largest transportation & logistics company in the world and GE the largest manufacturer of industrial products.
For instance, a leading shipping company wanted to capture and share the knowledge of logistics and port operations experts that must make contingent re-routing decisions, if a ship is not allowed to dock at a port due to a variety of reasons, such as a strike. Each port omission can cost the company up to $300,000 per omission.
Before using the Maana Knowledge Platform™ the port operations and logistics experts had to manually consider hundreds of variables, including the customer involved, cargo stowage, schedules, bunker, inland operations and port and vessel information. The entire process took up to six hours.
To reduce this time without compromising outcomes, they created a logistics and contingency optimization application that combined their process expertise with the most relevant data related to making port re-routing decisions. Now, decision makers use the application to simulate the most optimized re-routing options to make the most efficient re-routing decision in 60 seconds instead of six hours. By incorporating the knowledge of the port operations experts and the most relevant data, the knowledge application quickly serves up the most pertinent information they need to route the ship to the most optimized port to maximize revenue and customer satisfaction.
Similarly, a global Fortune 10 oil and gas company wanted to capture and share the knowledge of crude engineers around the globe to help mitigate risks associated with over 200 crude types, such as oil corrosion causing equipment failures.
The process of refining crude oil into a finished good involves many risks, from equipment failures to unplanned downtime. Over the years, corrosion engineers gathered a large amount of knowledge about this process, from the chemical composition of the crude to how different kinds of crude oil respond to different environments. But the company struggled to capture their insights and share them with crude engineers around the globe.
The inability to quickly share knowledge resulted in unplanned equipment downtime and failure due to crude corrosion. However, once they set out on a path toward digital transformation, they began to encode this data and human knowledge into a knowledge application that all engineers across the globe could use to assess risk. Now corrosion engineers can promptly search for a particular crude oil and discover all the relevant information related to lessons learned and risk mitigation strategies.
Digital Knowledge Increases Gross Margins
The innovators in the industrial sector are at the forefront of using digital knowledge to transform their organizations. For the top 700 major industrial companies, digital transformation equates to the creation of 1,000,000 models using information locked in 400,000 disparate sources to aid 2,500,000 subject matter experts on 65,000 workflows making 10,000,000 daily decisions better and faster. Which translates into $1.5 Trillion dollars in additional annual profitability contributing to the global economy.
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