Data-Driven Operations and the Pursuit of Operational Excellence

June 29, 2022

Guest: Leif Eriksen

Research Vice President, Future of Operations, IDC


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Data-Driven Operations (DDO) is the future of operations. And it’s also the past. Data about the efficiency, reliability, safety, and sustainability of operations has been with us for 50+ years. But it was limited by the costs to collect it, difficulty accessing it, and our ability to extracts insights from it. Today we can confidently say that decades of ongoing innovation have erased all the technology barriers to becoming truly data driven as an organization. The challenge is figuring out the best approach for getting there and where to start.

To put this progress in perspective let's go back in time to the life of a young engineer (me working in a production facility and tasked with finding ways to improve the production process. The year was 1984 and the key then – as it is today – was to find ways to better improve operations. This might be to increase plant output, reduce energy usage, increase equipment reliability, or improve product quality, all within the constraints of our safety protocols. We operated the plant using what data we had, but as much as we knew, there was just as much we didn't know. Data was trapped in "green screen terminal" minicomputers and the PC was just coming of age. Getting data from the former to the latter required a laborious process of printing the data out and typing it into the PC — and this just to determine if there were any insights to be gained from it!

Fast forward to the present and ongoing innovation has knocked down the technological barriers to progress.  The list of technologies available to support the data-driven journey today which weren't widely available even 20 years ago includes cloud technology, ubiquitous wireless technology, mobile computers, AI/ML, and AR/VR. We have also seen substantial innovation in new sensor technologies and there are very few parameters, if any, that we can no longer cost effectively measure. For example, continuous monitoring of vehicle tire pressure is now ubiquitous.

Cloud technology, in particular, has a central role to play in the data-driven transformation of operations. It's not just about lowering the costs associated with managing operational data – which is significant; it's equally about the inherent data sharing and collaborative advantages of the cloud. Information moves much more freely – and, today, more securely – in the cloud than it does in on-premises systems. IDC's research makes clear that those organizations which have embraced the cloud to manage operational data and its insights have indeed become more data-driven in their decision-making. This has, in turn, led to improvements in operational performance, including safety and sustainability.

Historically, the lack of data has constrained operational decision making. Most decisions involved trade-offs between greater efficiency and other objectives such as safety, reliability, and sustainability. There simply was not enough data or the ability to analyze the data be make an optimized decision which maximizes the value across all operational objectives, while maintaining high levels of safety and sustainability. This is what DDO delivers and why investing in operational data and its effective management is at the heart of it. To learn more, read the IDC eBook “Operational Excellence and Resilience: The Critical Role of Data.” 

DDO is both a destination and a journey. How you approach it should reflect where your organization sits today, the resources available to you, and evolving dynamics of your industry. It should not, however, be seen as optional. The future of operations is data-driven operations and organizations which choose to ignore it will be left behind.

Recently, I presented some of these findings at the inaugural conference Samsara Beyond, with leading companies in the physical operations space in attendance. I encourage you to register for a virtual replay of the conference on July 13 to view my session, along with other content from the show.


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