According to a study done by the World Economic Forum in May 2018, ROI on Industry 4.0 projects can vary widely. For example, industry leaders (which tend to be larger by revenue) can achieve productivity gains of about 70%. Small to Medium-Sized Enterprises (SMEs) are more likely to see gains of approximately 30%. Regardless of your organization’s standing in the industry, certain factors can help maximize the ROI of Industry 4.0 projects.
Strong Executive Leadership.
A successful journey to Industry 4.0 requires strategic vision and alignment across all parts of the organization. This is what makes having a comprehensive Business analysis of the entire company an important first step in the transition to I-4.0 This study must originate at the top of the organization. Leaders should frequently and authentically voice their support for achieving Industry 4.0, not only through organization-wide communication but also through the allocation of resources and the prioritization of Industry 4.0 initiatives.
Leaders should frequently and authentically voice their support for achieving Industry 4.0, not only through organization-wide communication but also through the allocation of resources and the prioritization of Industry 4.0 initiatives.
However, before allocating resources, it’s best to wait for the findings of the Business analysis and assessment of potential ROI and measures of effectiveness.
Once the decision-makers have given the go-ahead, the leadership must make it known to all stakeholders that an I-4.0 initiative will be implemented. Of course, many employees and investors may become nervous, but leadership should develop an “initiative roll-out” campaign to address the cost-benefits of making the transition. Given the concern for job replacements, employees should be brought into the process from the start with the intention of helping reduce the impact of increased automation and the need for job training for new I-4.0 jobs or making a transition to other opportunities for displaced workers.
Organizations that dedicate time and resources to change management and employee education early in the digitization process see more enthusiastic adoption
Organizations that dedicate time and resources to change management and employee education early in the digitization process see more enthusiastic adoption, which indirectly drives ROI as workers are better equipped to understand and execute new technology-powered SOPs. Employees often fear that new technology will take their jobs away. Emphasizing that new technology will help eliminate highly repetitive tasks–and that knowledge of the technology is a valuable skill–usually eases employee concerns.
Companies that deploy multiple technologies, such as robotics alongside cognitive technologies, will most likely enjoy productivity gains about three times higher than those of companies that deploy a single technology. For example, robotics alone will increase productivity, but pairing them with cognitive technology (such as machine learning or data mining) will likely yield even greater returns as well an all-important big data for improving decision making for innovation and overall improvements. Indeed, some feel that the effective use of big data analysis could be the most important benefit from I-4.0 initiatives. Of course, when coming up with ROI, future benefits are difficult for forecast before the fact.
Needless to say, developing strong capabilities in cloud computing, cybersecurity and interoperability to provide the necessary technological infrastructure for Industry 4.0 technologies. As the nature of technology is for continuous upgrades and improvements, one of the more difficult aspects is planning for future requirements. As a result, it makes good sense to attempt to identify what the potential future needs might be as well as what are the key components to the I-4.0 infrastructure in both hardware and software are and identify those factors that must be compatible for any potential expansion or new applications.
In summary, the coming I-4.0 infrastructure will be game-changing, and exactly how that will happen is not clear at this time. However, over the past few decades as technology has been evolving, the hardware and software industries have learned some hard and expensive lessons, and hopefully, those lessons will add great value to the emerging new technologies of I-4.0. Indeed, given the added value of big data analysis, it seems to add a new variable to analyzing ROI when it comes to emerging technologies. Indeed, the value of information is usually an after-the-fact benefit.
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