Johannesburg, 07 Feb 2024
As cloud computing, industry 4.0 technologies and AI increasingly shape modern enterprises and permeate every function within the business, companies are implementing comprehensive end-to-end digitalisation projects across the value chain.
Through this process, companies are redefining their operations by tearing down traditional technology silos and blurring lines between established operational domains.
Multiple factors driving convergence
Multiple factors are converging to drive this shift, necessitating an evolution from the traditional CIO role of managing IT infrastructure, applications and IT data, only to now encompass the operational technology (OT) portfolio and OT data.
The 'I' in CIO has emerged as the bridge that enables convergence between the IT and OT stacks as information becomes the lifeblood of every digitally enabled business.
In a 2022 review titled: The Convergence of IT and OT Powers Up the Scalability of Business Operations, McKinsey & Company analysts explained that the “IT/OT stack can be a major stumbling block in digital transformation”.
In fact, estimates from all the major global business consultancies, including McKinsey, BCG, KPMG and Bain & Company, suggest that digital transformation failure rates are between 70% and 95%.
Yet, a significant 64% of businesses believe that AI will help increase their overall productivity, as revealed in a Forbes Advisor survey, which demonstrates the growing confidence in AI’s potential to transform business operations.
Unlocking digital transformation and AI success
With the right approach and technology solutions, convergence between the IT and OT domains can unlock digital transformation and AI utilisation at scale, and the CIO sits at the heart of this transformative journey.
The ‘I’ in CIO signifies information, which, at its core, stems from all the data generated within an organisational value chain, from the IT systems such as payroll, ERP and CRM applications to operational systems like manufacturing execution systems (MES), instrumentation, operational historians and programmable logic controllers (PLCs).
Many organisations consequently find themselves inundated with data that resides in disparate systems, rendering it under-utilised for informed decision-making and AI utilisation at an executive level.
Moreover, by making the CIO accountable for the full technology stack for the first time, businesses can utilise data and information to support and enable data convergence between IT and OT systems without crossing the traditional operational domains inherent in any organisational structure.
By acting as the technology orchestrator, the IT, finance and engineering departments can maintain their autonomy within the operational context, and the company still benefits from data integration across the organisation.
The relevant and real-time insights and information that this convergence can generate can support real-time decision-making to continuously improve business operations, address political and economic challenges, and future-proof the company rather than merely support forward-looking decisions based on hindsight data.
Breaking down silos
To address these silos, the CIO must focus on building integrated systems that can deliver a unified view of information from across the organisation through the convergence of IT and OT data.
While these are historically distinct realms, it has become incumbent on CIOs to facilitate this process in the modern enterprise, which requires breaking down barriers and ensuring seamless integration that goes beyond governance, regulatory compliance or safety.
In this context, systems convergence must address the needs of the business and operations, leveraging end-to-end digitalisation that spans the entire organisational value chain.
This trend gathered pace in 2023 as more companies looked to integrate data from the connected machinery and smart physical processes within the OT stack into the traditional information flow of established IT systems.
While this need to shift the CIO role was first identified by Gartner in 2011 in its IT and Operational Technology: Convergence, Alignment and Integration report, the more than 180 members of the CxO Series, which represents the top CIOs in Africa, affirmed the relevance of the trend, which is now only really gaining real momentum.
The topics covered by the CIOs who presented at the four major CxO Series events in 2023 all support the major shift towards the convergence of IT and OT under the CIO, due to the accelerating pace of digital transformation and the need to adopt and use AI in organisations as an after-effect of the pandemic.
As the digitalisation agenda rises in importance and more businesses look to embrace advanced digital capabilities like artificial intelligence (AI) and machine learning (ML), business leaders must accept the changing CIO role to unlock the full value and benefits from their investment in digital transformation.
Many companies currently falter in their ML and AI endeavours due to a lack of a clear business case, ROI or the necessary data layers and data infrastructure. This failure contributes to negative perceptions of digital transformation initiatives.
Critically, the ability to leverage data-hungry AI and ML solutions requires sources of quality data to feed the engines and generate valuable outcomes, which is only possible when big data systems are fed valuable information from converged IT and OT environments.
From hindsight to foresight
As digital transformation and AI gather further momentum in 2024 and beyond, companies will require experienced service providers that can apply domain expertise to facilitate the necessary convergence.
These projects should focus on data extraction and utilisation through digital transformation initiatives that guide organisations through the journey from hindsight to insight to foresight.
It is critical to progress through these phases in sequence, as any attempt to leapfrog any stage can lead to failed projects or digital transformations that fail to create visibility into the entire organisational value chain.
In this regard, the modern CIO must act as the orchestrator, bringing together the various technology components required to harmonise information sharing while also addressing the other critical elements in the process, such as adoption and change management (ACM).
Ultimately, measuring true success and extracting the full value and benefit from any digital transformation depends on the adoption and use of the technology before, during and after the project. Without proper ACM, even a technologically sound project may fail, further emphasising the need for a holistic approach to digital transformation championed by the CIO.
- Willie Ackerman, Chief Sales and Marketing Officer at 4Sight Holdings.