DATE: JUNE 2018VER: 1PREPARED BY: SIEMENS LTD

Conference Summary June 2018

Driving your Digital Transfomation

DRIVING YOUR DIGITAL TRANSFORMATION | WHITE PAPER

Digitalisation is no longer an option for organisations, it is a prerequisite for survival in a digital world. It also presents massive opportunities for those businesses willing to embrace change and digital transformation. It offers businesses opportunities to become more efficient, improve quality, scale faster, gain competitive advantage, and win new customers. Yet, according to a survey carried out by Siemens in December 2017, almost one-third of Irish companies have no strategy for this.

These were the core underlying themes of the ‘Driving Your Digital Transformation’ conference jointly hosted by Siemens and IRDG Innovation Network in Croke Park on 13 June last. The conference followed on from a series of meetings and a roundtable event held with Siemens clients during 2017 and earlier this year, and was aimed at assisting attendees to take the next steps on their digitalisation journey.

“We are living in a VUCA world,” he said. “It is Volatile, Unpredictable, Complex and Ambiguous. Despite this, the digitalisation of Ireland’s industrial landscape presents a window of opportunity for boosting competitiveness by increasing productivity and enabling Irish companies to achieve greater integration into the global value chain.”

According to O’Callaghan, many companies in Ireland still have room to grow when it comes to implementing a holistic digitalisation strategy and should seek to improve their internal processes, productivity and cooperation with suppliers and customers. “Times are changing and we all have to change with them,” he said.

Taking the next steps on the digitalisation journey

Managing a VUCA world

The conference heard from a wide range of speakers from industry, government organisations, and academia, who explored a variety of digitalisation themes. These included the need to view digital transformation as a set of strategies for a digital world rather than as a digital strategy, the fact that digitalisation is fundamentally about people rather than technology, the technologies that will be at the heart of the new digital era, the requirement to place the value proposition front and centre in digital initiatives, and how a vibrant digital ecosystem is taking shape here in Ireland.

Opening the conference, Siemens Ireland CEO Gary O’Callaghan outlined how there are three recurring barriers on the route to digitalisation: understanding the technologies that are available, addressing concerns about digital skills gap within an organisation, and how to build and evaluate the investment case around new business models.

IRDG managing director Denis Hayes said that digital technology is key enabler of innovation across all society. “It is highly relevant and highly connected with innovation”, he noted.

And its impact will be profound. “Eighty per cent of current business process and practices will either be changed or eliminated by 2025,” he noted. “That makes digital transformation a must. It’s an imperative. Technologies such as data analytics, artificial intelligence, blockchain, augmented reality, and virtual reality will give us new capabilities to analyse, personalise, predict, correct in real time, automate, and reduce risk. That will offer new opportunities to engage customers, empower employees, optimise operations, develop new products and services, and create new business models.”

Gary O’CallaghanCEO, Siemens Ireland

Denis HayesManaging Director, IRDG

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Domhnall Carroll, Division Head with Siemens, introduced the first of two Technology Showcases which took the audience on a whistle-stop tour of several of the various technologies that will make digital transformation work for business and society in the coming years.

Orla Fagan, lead designer with mobile app development company Tapadoo, addressed the issue of user experience design. She explained that her job is to channel the user and champion their goals and needs when it comes to app design. To deliver a good user experience apps have to be useful, usable, desirable, findable, accessible, credible, and delightful. Above all, they have to be trusted: “It all boils down to trust. That’s the most valuable and important quality.”

Professor Theo Lynn of the Irish Centre for Cloud Computing and Commerce at DCU described sensors as ‘the sparkplug in the engine of the Internet of Things’ and indeed the Internet of Everything (IoE). The value of IoE to society is significant and is projected to be worth up to US$19 trillion by 2022. “It’s called IoE because it impacts on everything – machine to machine communications, human to machine communications, industrial networking, everything. There will be great opportunities everywhere and Ireland is very well-positioned to exploit them.”

Siemens applications engineer John Cleary spoke about the Siemens MindSphere open IoT operating system and the four main cloud models in use today. The private cloud which is for the exclusive use a single organisation; the infrastructure as a service cloud where the customer runs their own applications, operating systems and other services, but virtualisation, servers, storage and so on are shared; the platform as a service where the operating systems are also shared; and the software as a service model where everything is shared and paid for on a usage model. “Whatever model is chosen, the

Technology showcaseultimate goal is to make it seamless and as easy as possible to manage for the customer. The cloud is now a key service for modern business.”

Peter Rose of IT consulting and digital transformation specialist TEKenable looked at the evolution of technology and apps from the earliest days of mainframe computers to the latest cloud-based technologies. He pointed to state-of-the-art applications such as Ikea’s augmented reality offering which “places” furniture items in the potential buyer’s home and smartwatches with the capability to record and share complex physiological data. He also pointed to the barriers to the acceptance of such technology which include social acceptability and fear of loss of privacy and so on. Looking at apps which know who we are, what we want and when we want it he posed the question: “is this the future or is it now?”

Application Programming Interfaces (APIs) are the workhorse of computing platforms, according to Eric Robson, Research Unit Manager for Artificial Intelligence and Machine Learning at TSSG in Waterford. Noting that APIs are now ubiquitous and form the connections between the various pieces of software underlying apps such as Google Maps, internet banking, and MyTaxi, he described them as the universal translator of modern technology. A current example he pointed to is the CareLink app, which brings together a number of different apps and technologies to analyse the behaviour of patients with dementia and protect them from danger. The key to success, he pointed out, was to keep it as simple as possible and not to over-complicate.

Wayne Bursey, Digitalisation Account Manager with Siemens, addressed the hot topic of cybersecurity. He looked at the five most important things for security within the digitalisation environment. These are the increasing need for organisations to include cybersecurity in their board reports; the interconnection between IT systems and manufacturing and other operational technologies; the increasingly hazardous cyberthreatscape; the need to train people in cybersecurity and foster collaboration between IT staff and other groups within organisations; and the Siemens Holistic 3 Step Approach which assesses current security status, implements a strategy to improve it through managed proactive protection, and continuously improves defences. Bringing all these together results in multi-layered strength in depth for an organisation’s cyber defences.

Domhnall Carroll, Siemens

Orla FaganTapadoo

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Siemens business development analyst Seamus Murray then took to the stage to explain how innovative companies can generate new digital business models. Murray pointed out that digital technologies were not an end in themselves and that they must offer a value proposition which fits into a sensible business model.

Traditional record shops have largely migrated to online streaming and downloading platforms; domestic manual heating and lighting controls are giving way to smart home technology; the electricity generation industry is moving from turbines to power by the hour; and traditional haulage is moving from trucks to data-driven fleet logistics.

However, for digital solutions to be successful they have to be built around customer wants and needs. This sees customers become co-creators of new products and services.

“At Siemens, we have a five-step customer value co-creation framework”, he said. “This begins with understanding and ideation; creating a value proposition; design value creation logic; piloting and implementation; and scaling.”

Murray also explained the Siemens BizMo value proposition design framework, which is built around what customers and users need and how to design the successful offerings that

Digital is people was the central message delivered by Alessandro Rimassa, co-founder of the Talent Garden Innovation School. Talent Garden is a coworking network for a selected community of digital innovators. “We provide the space, the community and the services needed to succeed,” said Rimassa.

Rimassa explained how digital technologies can work to make the hotel experience better for people. Highly automated check-in processes not only speed up and smoothen the experience for guests but give back vital square meterage to hotels for other uses.

“When you change the user experience you change the perception of people towards your business”, said Rimassa. “You can change the future through digital transformation.”

He stressed the people-centred nature of such solutions. “Digital transformation is putting people at the core,” he said. “It is about using technology to create a better experience for people and doing it in a smarter way. It means a better experience for customers and more money for the company. But it has to be a human-centred solution. Digital transformation is not about technology. It also changes values, in companies and society.”

He believes there will be five core values in the digital era: transparency, feedback, change, beta, and trust. “Leaders will have to be crystal clear when speaking to people. Transparency wins in the new era. They must also give continuous feedback

Value Proposition Design

Digital is People

they want. “We choose the market segment we are aiming at, jobs which need to be done there, existing solutions for those jobs, and the frustrations and pain being experienced by customers. After that, we look for gain creators and pain relievers on our search for a value proposition.”

He offered a real-world example of this process in action in the English water industry. “We used the Siemens MindSphere open IoT operating system to enable real time water quality monitoring by remote sensors. This allows the company to respond to water quality events very quickly. In future, a predictive element may also enable the company to avoid such events. We have a pilot project running at a service reservoir in England at the moment and hope to scale it up in future. It’s no longer about selling a product. Revenue is tied to analytics and a water quality data as a service model.”

and help people be better tomorrow. Promoting change and failure is important: you mustn’t think that every new product will be perfect. You know that some will fail. If you don’t have failures, you won’t have a business. You have to work in beta-mode and learn as you go. You have to give and ask for trust if you want to promote change. Finally, you must put feedback at the centre of working and believe in the future of your company as one that is centred on people.”

“When you change the user experience you change the perception of people towards your business”

Alessandro RimassaTalent Garden

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Bernadette McGahon, Research and Innovation Services Manager with IRDG, introduced the second technology showcase, noting the difference in emphasis and focus from the earlier session. “This morning was about the background technologies which underpin digital transformation. This session is about the technologies we will work with and how we work with them.”

The Showcase kicked off with a presentation on Agile by Ding Chief Technology Officer, Hugh O’Donoghue. “About 18 months ago we looked at how we could become more agile. It was a six-month process, but we are now in a far happier place than we were. Team are at the core – multi-disciplinary, self-organised teams which are 100% dedicated. Culture is also important. You have to embrace change and not be afraid of experimentation. These are key characteristics. We have increased our speed to market by 50%, but if you don’t have the technology tools in place it is very hard to be agile.”

Edward McDonnell of the CeADAR Centre for Applied Data Analytics and Machine Intelligence addressed the fear factor which surrounds AI and related technologies by highlighting its potential benefits. “When people hear about AI or machine learning it often provokes a visceral reaction and visions of a brave new world populated by malevolent robots like the Hal 9000 computer in 2001: A Space Odyssey,” he noted. But there are much more positive applications such as taking the pressure of call centre staff through automated topic and issue recognition; the real-time analysis of big data to improve spam and financial fraud detection systems; voice-controlled interrogation of software applications and devices; and machine intelligence to improve productivity in manufacturing facilities.

Asavie Technologies Cloud Architect John McBride continued on the same theme when he addressed machine learning, which he defined as “computers with the ability to learn without being specifically programmed.” Noting that it is already in use today by organisations such as Netflix which utilities it to predict user preferences, he said the process of applying it begins with asking a good question. “You have

Technology Showcase

to describe clearly what you want to know and the business value of the question you need to answer.” After that, it is a matter of being able to collect the required data, having the technology and data science expertise to process it, and being able to compete for the talent required for the task.

Geoffrey Allen, Chief Executive Officer of 3Ms Imagineering addressed the topic of virtual reality and its role in modern manufacturing organisations. “We help companies assess the data they have and understand how to use it in their digital transformation.” One example he cited was the creation of a ‘digital twin’ in a factory environment. This would see sensors being placed on all equipment, with data being sent back to a computer operating the Mersus virtual reality platform. This allows users to see how a manufacturing process will operate under different conditions in a virtual environment, with none of the costs associated with physical testing.

The next step on this journey is augmented reality and its ability to combine the physical and real world. This was the topic explored by Colin Couper, Senior Technical Sales Specialist with Daqri. The Daqri Worksense suite of wearable devices, augmented reality software and workplace integration services allow a user to wear a set of smart glasses which overlay key information such as design specifications in a context-sensitive way on whatever it is they happen to be looking at.

Cilian Leonowicz, Head of Business Development for EMEA with Deloitte’s Blockchain Lab concluded the session with a look at the potential impact of the distributed ledger technology on industry and society. “The value of blockchain won’t be to individual organisations,” he said. “It will be across the value chain. A network today can allow the exchange of information, but not value. Blockchain will allow the exchange of value.” But the security features of the technology can also be used for applications such as the centralised storage of educational qualifications, medical record transfer, know your customer information for anti-money laundering compliance, and other forms of certification. This makes its potential use extend far beyond cryptocurrencies.

Hugh O’DonoghueDing

Edward McDonnellCeADAR

Cilian LeonowiczEMEA

John McBrideAsavie

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TCD Computer Science Professor Siobhan Clarke told the conference that the digital ecosystem needs to be connected at speed if benefits to citizens are to be maximised. Professor Clarke is also Director of the Science Foundation Ireland-funded Enable research programme. The €14.5 million programme is examining how the Internet of Things can be used to improve the quality of life for ordinary citizens living in urban environments, and is addressing a wide range of topics, including water management, air pollution, transport congestion, data privacy and cyber security.

Among other projects, Enable is working with Dublin City Council on the Smart Docklands Initiative. “Our aim is to turn the Docklands into the world’s most connected business and living district,”Professor Clarke said. “We organised a number of workshops with stakeholders in the area and have done a good job of including the people living there. We have now come with a list of 300 challenges to meet and this will form the basis of a two-year workplan for the initiative.”

Connecting the Ecosystem

The digital ecosystem now exists and is alive and thriving here in Ireland. That was Gary O’Callaghan’s conclusion at the end of a lively, informative and entertaining day which also featured a large number of exhibition stands from participating organisations and some great networking opportunities for attendees.

“Each organisation represented this morning is now open for business,” said O’Callaghan. “What we are now looking for are projects – of any size. Projects where we can work with you to bring your digital product, service or app to a ready state, and help you to scale. Siemens is ready to help. If you are in any doubt where to start your digitalisation journey, IRDG is a great place to start and help you navigate its complexity.”

IRDG also stands ready to help, according to Denis Hayes. “At IRDG, we see ourselves taking a leadership role in this. We are looking for people to come to us with projects they want to take forward. Please come and talk to us at IRDG. We will be very happy to help facilitate your next steps.”

Conclusion

“We organised a number of workshops with stakeholders in the area and have done a good job of including the people living there. We have now come with a list of 300 challenges to meet and this will form the basis of a two-year workplan for the initiative.”

Prof. Siobhan ClarkeTrinity College

Further information on the content is available from:Siemens Ltd., DublinInnovation House,DCU Alpha,Old Finglas Road, GlasnevinDublin 11

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