Sustainability is a new side effect of digital transformation

Digital transformation efforts are reaching a new phase, where the focus is shifting from productivity enhancements to sustainability. A new report from ABB, the sustainability efforts of Bosch that have been on display at CES over the past two years, and broad conversations I’ve had with companies in the manufacturing sector are all examples of this new focus. As they make clear, we’ve moved from simply using IoT for efficiency to IoT as an enabler for sustainability goals.

Today, let’s look at the ABB report. 71% of the 765 industrial business leaders surveyed by the company were giving greater priority to sustainability objectives as a result of the pandemic. This is great news for people like me who have been tuning in to the potential of IoT to use new sensors or better data analysis to help fix big problems by making it easier to identify ways to solve them or ways that we’re currently contributing to them. And it’s a long time coming: I was writing about efforts by Schneider Electric to reduce the carbon impact of its manufacturing lines by using sensor data to shift its production back in 2018.

As the ABB report notes, almost three-fourths (72%) of respondents to its recent survey cite sustainability efforts as the reason they are increasing their spending on industrial IoT either somewhat or significantly. This jibes with a report that Vodafone put out last year, which notes how, in the UK, the biggest opportunities manufacturing firms have to reduce their carbon impact is to use the IoT to make higher-quality products and to make products more efficiently, both of which can reduce overall waste.

Basic manufacturing investments in predictive maintenance can help with sustainability by reducing the need for people to travel to maintain equipment unnecessarily while also ensuring that poorly tuned machines are not using more energy than they should. Much of the groundwork for these sorts of sustainability improvements are already laid thanks to investments in overall plant efficiency.

However, the ABB report notes that, to go further, companies will have to focus next on applying the insights the data from sensors can offer. Indeed, if the first step of a digital transformation is putting in networks and sensors, and the second step is turning the data into actionable insights, then the third step is taking the insights from a dashboard and ensuring employees can do something with them.

James Macaulay, senior director of communications with ABB, suggested to me that managers need to find ways for individual employees to take sustainability goals and apply them to their day-to-day work. Instead of just touting a carbon-neutral goal, management has to figure out how to get individual employees to come up with ways to do so. One example might involve instructing managers to find sustainable sources for materials or to tell the transportation manager to prioritize clustering shipments over rapid delivery to reduce the need for multiple trips.

The point is that like overall digital transformation efforts, the next steps will be process-driven, reliant on actually using the insights to take action. Historically this had been the most challenging aspect of any IoT implementation. The ABB report is also full of other relevant tidbits that I take as a sign of the industry’s maturation. For example, it appears that the number of projects stuck in pilot purgatory is on the wane. Macaulay says that 51% of the survey respondents were considered “digitally mature” and had already captured the “low-hanging fruit” of a digital transformation plan.

The survey also indicates that while cybersecurity concerns remain a barrier to entry, older issues such as networking or deployment challenges were no longer at the forefront of difficulties when it comes to a digital transformation plan. The actual wiring and deployment challenges have been solved for most customers.

All in, the survey is a fairly optimistic one, although I think the hardest challenge associated with any big transformation (whether it’s digital or an attempt to be more sustainable) is actually figuring out the right ways to balance profitability and whatever new goal the business is trying to achieve. While a digital transformation is going to make building a sustainable operation easier, there will still be moments when sustainability costs more.

That’s where we’ll see how far a business’s commitment truly goes.