How digital transformation programs are delivering real results for process industries.

It is said that automation without digital transformation is possible, but digital transformation without automation is impossible. Traditionally process industries are highly automated, but when it comes to digital transformation, there are often issues in implementation. Automation speeds up processes and reduces costs, but digital technologies improve everything in the process, and hence the need for transformation. So

what exactly is the current state of digital transformation in process industries?

“In my point of view, there are different maturity levels of digital transformation efforts and

advances for different industries. In the crude oil refining industry, for example, I understand that we had good advances in the last years, but the concerns related to cybersecurity and the potential risks can act as a delayed agent for the digital transformation investments in this area. Recent events like the ransomware attack on Colonial Pipeline is perhaps the most well-known of all the recent cyberattacks in the energy industry, which reinforces the necessity of more investments and cybersecurity by the process industries players, mainly the high process safety risk industries like the crude oil refining processing chain,” says Dr Marcio Wagner da Silva, Process Engineering Manager. An industry veteran working with a crude oil refinery based in São José dos Campos, Brazil, Dr Marcio Wagner da Silva has the right credentials.

According to Kapil Agarwal, Senior Vice President & Local Division Manager, Process Industries, ABB India, the current state of digital transformation in process industries is characterised by widespread adoption of advanced technologies aimed at enhancing productivity, efficiency, and sustainability. Indian manufacturing players, among others, have embraced digital transformation, driven by the need for higher productivity, shorter product life cycles, and stringent safety and environmental standards. Key technologies such as advanced analytics, artificial intelligence, and process automation solutions are central to this transformation, enabling real-time monitoring, predictive maintenance, and optimisation of energy and resource efficiency. “Companies across sectors like cement, hydrocarbons, chemicals, mining, metals, and power generation are leveraging these digital tools to reduce emissions, improve cybersecurity, and increase operational efficiency, thus achieving significant value creation and sustainability goals,” he adds. ABB ranks #2 in the Process Automation market globally, the Company offering a broad range of solutions in the areas of integrated automation, digital solutions, control technologies, software and advanced services, as well as measurement & analytics.

“The process industries are at various stages of digital transformation, with some leading the way and others still in the early phases. Integrating advanced technologies is driving significant efficiency, productivity, and sustainability improvements. However, challenges like legacy system integration, cybersecurity, and workforce skills need special attention to realise the full potential of digital transformation,” says Darshana Thakkar, Founder, Transformation – The Strategy HUB, who helps MSMEs define growth paths, derive marketing strategies, improve business operations, adopt digital transformation, and increase profitability. “As companies continue investing in digital initiatives, those who can successfully navigate these challenges will likely gain a competitive edge in the evolving industrial landscape,” he adds.

The Internet of Things (IoT) has now become the key driving factor for industrial automation systems with many emerging technologies driving digital transformation. What are key technologies when it comes to process industries?

“The basic idea underlying industrial digital transformation is to use data and technology to increase flexibility in production processes, enhance the organisation’s ability to address customer needs, and improve competitive positioning. With a digital transformation mindset, the core business model by which a company produces and/or offers services to the marketplace can be modified or replaced by new business models that more fully leverage the cloud, multiple forms of AI, digital twins, predictive technologies, or other technologies that enable the company to expand their worldview, embrace competitive excellence as a goal, and thereby move beyond production efficiency to a much more dynamic, responsive, and resilient business model,” says Larry O’Brien, Vice President, Research, ARC Advisory Group, who has an extensive background covering control systems, networks, sensors, and software for the industrial and critical infrastructure segments. In a survey conducted by ARC in 2023, between a third and half of the respondents prioritise smart connected products, IoT, edge computing, digital twin, and industrial metaverse strategies. The challenge for these companies is how to introduce and scale the underlying technologies.

Priyanka Kaul, Associate Chief Engineer, Instrumentation with Technip Energies, sees the following as the key technologies driving digital transformation in process industries:

• Mobile phones and apps, 5G
• Cloud computing
• Internet of Things (IoT)
• Digital Twins
• Artificial intelligence (AI) and machine learning (ML)
• Augmented reality and virtual reality (AR/VR)
• Blockchain
• Big data analytics
• Industrial robotics and drones, and
• Additive manufacturing (3D Printing).

Priyanka has 20 years of industry experience in the Oil & Gas, LNG, and Power sector. She has worked with various reputed EPC companies and MNCs like Fluor, KBR, L&T Hydrocarbon Engineering, L&T Technology Services, Desein, S&B, GS E&C, and Technip, and her views are based on her hands-on experience in the industry.

For Dr Marcio Wagner da Silva, AI is becoming extremely powerful and useful for the process industries. “Again, concerns related to cybersecurity act as a delay agent considering the severe consequences of an eventual cyberattack in some process plants. Furthermore, automation and IoT devices are essential to the success of any digital transformation program,” he opines.

Today data is among the key factors driving the digital revolution. What role does data analytics play in the decision-making processes within these industries?
“Data analytics plays a pivotal role in the decision-making processes within process industries by providing actionable intelligence derived from vast amounts of data. It enhances decision-making through real-time monitoring and analysis of resources and assets, allowing businesses to track and manage their operations efficiently throughout the product lifecycle. By identifying patterns and trends, AI algorithms, combined with data analytics, offer insights into resource optimisation and waste reduction opportunities. This enables businesses to implement circular strategies, optimise processes, and achieve higher levels of sustainability and efficiency in the era of Industry 4.0,” says Kapil Agarwal.

Darshana Thakkar views real-time data analysis as crucial for quick and effective decision-making. According to her, edge computing or cloud computing should be selected based on the organisational requirements and preference for data storage and retrieval. “Data analytics is integral to decision-making in process industries, providing the insights needed to optimise operations, reduce costs, enhance quality, manage risks, and drive innovation. By leveraging data analytics, companies can make more informed, evidence-based decisions that lead to improved performance and a stronger competitive position in the market,” she explains.

“There are seven major areas that constitute the building blocks of digital transformation. Analytics and modelling is one of those pillars. Each represents a portion of the broad set of technologies that must come together in a digitally transformed plant or factory. Each merits focus and attention, and in many cases, each may be assigned dedicated teams,” says Larry O’Brien. To him, it is knowledge management systems that can bring important contextual information to process, machine health, and other plant data and support frontline workers and supervisors in decision making. “One of two categories of digital transformation ‘building blocks’ that doesn’t fit easily in traditional conceptualisations of the plant/factory floor stack is data models and analytics. This is an important area that demands focused attention to manage and leverage it properly. Several important areas must be addressed here. With data ops or data management, data can be stored where most appropriate and made available to applications expeditiously. The broad group of analytics, including artificial intelligence, machine learning, and cognitive or reasoning systems, can increasingly be found in various plant and enterprise applications, but they also provide an important toolkit for digital transformation,” he elaborates.

One of the biggest stumbling blocks to change in any sphere is mindset. People resist change in the mistaken belief that it would be contrary to their interests. What are the biggest challenges or barriers to digital transformation in process industries?

According to Priyanka Kaul, the major challenges to digital transformation in process industries are:

• Outdated systems & lack of digital technology awareness
• Lack of skilled work resources and digital skill gap
• Company cultural resistance to change
• Rigid infrastructure/legacy systems integration
• Regulatory compliance and operational challenges
• Privacy concerns/Cybersecurity concerns/Data security
• Lack of overall Digitisation and Digital transformation strategy
• Cost management and return on investment (RoI)
• Lack of change management strategy
• Complex software and technology
• Driving adoption of new tools and processes, and
• Continuous evolution of customer needs and constantly evolving digital landscape.

“The main barrier is the concern related to the vulnerability to cyberattacks, which is understated to be proportional to the implemented digital transformation level,” says Dr Marcio Wagner da Silva. Cyberattacks can disrupt, damage and even destroy businesses. According to a report by IBM a few years ago, the average cost of a data breach is USD 4.35 million. This price tag includes the costs of discovering and responding to the violation, downtime and lost revenue, and the long-term reputational damage to a business and its brand, and hence companies are wary. “Another key factor is to promote a culture change in the organisation avoiding the well-known risk of sustaining the digital transformation efforts only in the technologies. It's necessary to promote a change of the mindset from process to a deep data analytics culture,” explains Dr Marcio.

For Kapil Agarwal, the biggest challenges to digital transformation in process industries include the substantial investments required for infrastructure development and the need for skilled personnel to implement and operate advanced technologies. “Companies must navigate the complexities of training or hiring individuals with the right expertise, which can be a significant hurdle. Additionally, there are ethical and legal implications associated with the large-scale deployment of automation, particularly concerning its impact on human workforces. Addressing these challenges is essential for ensuring a smooth transition to digital operations while balancing technological advancements with workforce considerations,” he elaborates.

Advancements in digital technologies and their increasing adoption are noted to result in enhanced efficiency, improved productivity, reduced wastage and optimised use of energy. In view of these advantages and more, how are sustainability and environmental concerns influencing digital transformation strategies?

“Sustainability and environmental concerns are becoming central to digital transformation strategies, driving companies to adopt technologies that enhance efficiency, reduce waste, and minimise their ecological impact. By aligning digital initiatives with sustainability goals, companies are meeting regulatory and societal expectations and positioning themselves for long-term success in an increasingly eco-conscious market,” maintains Darshana Thakkar. “The expectations and demands from various stakeholders, including Government, customers, the public, and investors, are becoming central forces for companies to adopt digital technologies. Increasing consumer awareness about environmental risk and global competition enables technology adoption,” she asserts.

To Larry O’Brien, sustainability is digital transformation and digital transformation is sustainability. A majority of industrial companies have implemented some level of a corporate sustainability program and strategy. These companies recognise the importance of integrating sustainability into their core business operations and have dedicated resources and commitments to achieve measurable outcomes. Their strategy often involves setting specific targets related to reducing environmental impact, improving resource efficiency, enhancing worker safety, and promoting ethical supply chain practices, aligning sustainability goals with their overall business objectives. “New digital tools are being created or adapted for new mines, new mineral refining processes, factories, manufacturing plants, power plants, and new energy distribution systems the energy transition is creating, as an example. The software available today is better than ever in part due to AI tools that have revolutionised the development of software. AI can generate code fragments or even entire programs based on high-level instructions. AI-powered tools automate repetitive and time-consuming tasks, such as testing, debugging, and code analysis,” he emphasises.

“The synergy between digital transformation and environmental sustainability has taken centre stage in an era marked by technological advancements and the urgent need for environmental conservation, growing consumer demand for sustainable products and regulations,” says Priyanka Kaul. Digital transformation brings with it the power to collect, analyse, and interpret vast amounts of data. Process industries are now equipped to monitor energy consumption, carbon emissions, and resource usage in real-time. With data-driven insights, they can make informed decisions about optimising operations, reducing waste, and adopting greener practices. For instance, smart sensors in industrial settings can track energy usage patterns, allowing for adjustments that lead to significant energy savings and reduced carbon footprints. “Digital technologies facilitate the integration of renewable energy sources into manufacturing operations. Smart grids and energy management systems allow factories to optimise their energy consumption, reduce reliance on fossil fuels, and lower greenhouse gas emissions,” she adds.

As Larry O’Brien observes, the concept of digital transformation seems to be experiencing a kind of mid-life crisis. Some companies are struggling to justify continuing their pursuit of it, while others have managed to overcome all objections and have moved their organisations forward. What would be the parting advice to companies just beginning their digital transformation journey?

“As companies embark on digital transformation, it’s crucial to start with a clear vision that aligns with long-term goals. Engaging stakeholders, including employees, customers, and partners, is essential for buy-in and diverse insights. I believe establishing performance metrics specific to industrial automation, such as production efficiency and equipment uptime, enables companies to measure the impact of digital initiatives and make informed decisions,” says Kapil Agarwal, who believes that measuring progress with established KPIs allows for data-driven decisions and tracking the impact of digital initiatives. Data security cannot be overlooked; robust cybersecurity measures are necessary to protect sensitive information and build trust. “By adhering to these principles, companies can effectively navigate the complexities of digital transformation, optimise their processes, and maintain a competitive edge in the market,” he suggests.

According to Darshana Thakkar, before starting the digital transformation journey, companies need to do due diligence on various factors. That includes setting up the goal and vision for digital transformation. Selection and investment in the right technology align with your goals and provide better RoI. “Teamwork is the key to success. Include and empower team members, provide appropriate training, and encourage them to adopt the change. Further, digital initiatives that improve customer experience and satisfaction should be prioritised. Understanding and addressing customer needs should drive your transformation efforts,” she adds.

Larry O’Brien is of the view that companies need to develop four skills to successfully drive transformation:

• They need to be able to imagine and repeatedly re-imagine a future state where innovative technologies translate into competitive excellence.
• They need to be able to master new technologies and deploy them to improve the business.
• They need to enable and empower the organisation’s collective intelligence, where multiple levels of decisions are supported by the necessary data and systems, and.
• They need to be able to lead the organisation in the transformation journey, despite inevitable, repeated, challenges and setbacks.

“It’s important to cultivate all four skills because without them, an organisation will likely find the hurdles to overcome will only grow, even as the need to change becomes ever more urgent,” says Larry O’Brien.

Priyanka Kaul outlines five points to take care of in the digital transformation journey:

• Encourage a digital first mindset among their employees and foster a culture of continuous learning and innovation
• Implement CRM systems, personalised marketing strategies, and digital self-service options to provide a seamless and satisfying experience
• Invest in robust data analytics capabilities to gather actionable insights from their business operations to gain a competitive edge.
• Collaborate with technology providers, consultants, and industry experts who can offer valuable insights and expertise, and
• Stay updated with the latest technology trends and industry best practices to be agile and adaptive to changing market dynamics.

“Summing up my responses, digital transformation efforts should be based on a deep and real culture change, it's important to make clear that technologies are important but their role is limited as tools in the digital transformation journey,” concludes Dr Marcio Wagner da Silva.