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Case Studies on How to Navigate a Successful Digital Transformation Journey
Taking the first tentative steps along a digital transformation journey can seem daunting. It does not have to be a voyage into oblivion. Other companies have traveled this pathway before, and their firms have not only survived but thrived. How can I be so sure? A new free white paper, sponsored by OSIsoft and authored by yours truly, offers some proof.
The white paper, Finding the ROI in Digital Transformation, hinges on the notion that to achieve a desirable ROI, a solid digital platform is essential. Such a platform, which is mainly software but can include hardware assets, must be robust, flexible, and secure. With this type of platform in place, a company is well positioned to reap immediate benefits and capture longer-term value as its transformation roadmap evolves.
How Are Digital Platforms Being Used?
Okay, that is the theory, but the proof is in the five case studies contained in the white paper. Each one tells a compelling story of how the five companies have used a digital platform (in all cases OSIsoft’s PI System, though the analysis is not an endorsement by Guidehouse Research) to harness data, help solve business problems, and realize positive outcomes. Here are summaries of the five case studies:
- AGL Energy, Australia’s largest producer of electricity, was growing rapidly, with a generation portfolio mushrooming from 300 MW to 10,000 MW over 9 years. At the same time, its mix of fuel types was becoming more and more diverse. Managers were, in their own words, “data blind” in key areas as they operated in an increasingly complex environment. AGL eventually set up an Operational Diagnostics Centre (ODC) in which the PI System was a key component. The results: payback from the initial software investments was achieved in about the first 9 months, and the company estimated a savings of A$21 million ($15.2 million) in the first 3 years of running the ODC.
- Deschutes Brewery, based in Oregon, confronted a problem with new fermentation tanks. Brewers kept seeing unwanted temperature spikes during the beer’s cooling process. They needed greater visibility. So, they installed new sensors and deployed the PI System to figure out the problem. Once they got more granular data, they were able to avoid the temperature spikes and keep the fermentation process on track. They also shortened the brewing process and increased yield by 4%. These efforts resulted in an estimated $450,000 of more beer produced per year and a payoff on the initial investment in about the first 3 months.
- White House Utility District (WHUD) in Tennessee was losing an estimated 32% of its treated water to leaks in some of its main lines. To reduce the losses, WHUD managers invested about $1.3 million in advanced meters and the PI System. The results: a substantial reduction in leaks and increased efficiencies valued at $1.6 million over 3 years. The district also avoided an expensive capital improvement project because of these digital moves.
- Aurelia Metals, a mining and exploration company based in Australia, faced a double crisis: its gold processing plant was underperforming, and it carried a large debt burden of A$125 million ($90 million). Company managers figured they had about 6 months to turn things around or they would have to shut down the business and lay off 700 people. The company hired consultancy Convergio to help set up the PI System and improve operations. The results: within 12 days the investment had paid for itself and in the first year, gold recovery improved by 14%. Eventually, the firm’s debt was paid off, plus the plant kept operating and people kept their jobs.
- DCP Midstream, one of the largest producers of natural gas liquids and natural gas processing in the US, decided to embark on a companywide digital transformation of its complex operations. The company invested $20 million to $25 million in people, hardware, and software in this effort. A significant portion of the money went into setting up an Integrated Collaboration Center (ICC) at its Denver, Colorado headquarters. The results: DCP broke even on its initial investment in the first 10 months; it expects to realize an incremental $20 million for all of 2018; and company managers expect added benefits as they explore higher levels of predictive analytics and advanced pattern recognition.
With Planning, Digital Platforms Can Revamp Companies
Not all digital transformation journeys yield these kinds of results for companies, of course. But with the right platform, proper planning, and solid execution, similar outcomes can be reasonably expected. One can avoid a trip to oblivion. Note: a webinar covering this same subject as this white paper is available for replay here on the Guidehouse Insights site.