IT/OT convergence, edge analytics, and the rise of smart factories

Technology is in a constant state of flux and each new year brings innovations that change the way we live and work. As we step into the first days of the new year, TeamViewer’s Chief Product and Technology Officer, Mei Dent, provides her 2024 technology predictions, including a focus on IT/OT convergence, utilizing edge computing for artificial intelligence (AI) analytics, and the rise of smart factories.

IT/OT convergence is the integration of information technology (IT) systems with operational technology (OT) systems. By combining these two systems, organizations can improve business operations and generate valuable insights.

In 2024, Dent foresees a growing divide between enterprises that integrate IT into their OT systems and those that lag behind. Those who invest, she suggests, will reap the benefits of improved efficiency and quality of output: “By bringing IT and OT systems together, businesses will be able to increase quality and productivity across their operations.”

However, Dent stresses that this convergence is more than just remote connectivity: “[it’s] going one step further to collect and analyze operational data to drive automation and control, as well as using augmented reality or mixed reality technology to improve usability and collaboration”. By facilitating fast and accurate information flow, Dent predicts that IT/OT convergence will become critical for businesses wanting to offer fast and scalable aftersales support.

Dent also predicts that IT/OT convergence across enterprises will increase as digital twin use cases are adopted alongside IT. A digital twin is a virtual model designed to accurately reflect a physical object. By pulling in real-time data, digital twins can be used to run simulations, study performance issues, and generate possible improvements. According to Dent, “[Digital twins] improve efficiency where complex industrial equipment is needed like warehouses, logistics, and aerospace environments.”

While the benefits of IT/OT convergence can be substantial, the journey to get there is often fraught with challenges. According to a recent report by McKinsey & Company, the historical divergence in IT and OT implementations has led to the development of notably different architectures and protocols. The outcome of these differences is significant structural and cultural barriers that obstruct the path to convergence. For organizations wishing to overcome the challenges of IT/OT convergence, the report underscores five key areas of focus, including; establishing common governance and common KPIs, harmonizing central and local IT and OT processes to improve collaboration, skills transformation (building digital capabilities), and centralizing data and security management.

The synergy between big data and modern AI has ushered in a new era of data-driven decision making, offering unparalleled opportunities for businesses to harness the power of vast and complex datasets for transformative insights and improved efficiency.

In 2024, Dent expects that businesses will seek to derive more from their pools of data by increasing their usage of the edge for AI analytics. The term ‘edge AI’ refers to instances where AI computation occurs at the edge of a network – close to where the data is located. Processing data on devices locally reduces reliance on the cloud and enables real-time decision-making. According to Wevolver’s 2023 report, organizations across manufacturing, healthcare, and transportation are increasingly recognising the advantages of edge AI.

Despite cybersecurity concerns, Dent anticipates that in 2024 more businesses will understand that the benefits of edge AI outweigh the risks: “Next year we will see more investment at the edge as when it comes to AI analytics it can be more than a dumb data collector.” Moreover, Dent stresses that: “businesses can no longer afford to use these [cyber security and regulatory concerns] as a reason not to tap into the data they have. They must take a responsible approach.”

The integration of new technologies, and in particular those harnessing AI, tend to elicit a dual response of both apprehension and excitement. Concerns about job displacement vie with the buzz surrounding technology’s capacity to streamline tasks, boost efficiency, and foster innovation.

According to Dent, the focus should be on prioritizing technology that elevates job satisfaction: “Business leaders should look to carefully implement this technology with a human-centered approach that empowers employees to learn new skills and undertake more value-driven tasks.” Responsible AI implementation, she believes, will support the workforce in being more productive, efficient, and accurate, ultimately overcoming increasing skills shortages.

Smart factories are a central element of Industry 4.0 and a priority for supply chains and manufacturing operations that hope to remain competitive and resilient.

Dent predicts a growth in the number of smart factories in 2024. However, due to the prohibitive nature of building a smart factory from scratch, she anticipates that the growth will come from existing factories becoming ‘smart’.

As smart factories become more prevalent, Dent foresees that having operational data on the factory floor will become a crucial step to developing verticalized solutions and driving efficiencies. Deloitte’s 2024 Manufacturing Industry Outlook also suggests that economic uncertainty, tight labor markets, and rising costs will put further pressure on manufacturers to leverage the benefits of smart factory technologies.

Drilling down on specific tech, Dent expects augmented reality (AR) to emerge as a potent tool for training staff and resolving on-site issues. By providing workers with real-time information and hands-free visual guidance, AR glasses enhance productivity and efficiency: “Through smart glasses and AR software the person on site can be walked through processes by an expert based anywhere. This will deliver increased uptime to the factory and enable employees to optimize their processes.”

According to Forbes, employers in the U.S. alone spend $413 billion a year on informal on-the-job training. Not only does AR lower the cost of training by eliminating the need for travel, but it also enhances the learning experience by providing digital instructions, interactive simulations, and real-time guidance.

Summary

Dent’s predictions underscore the imperative for businesses to embrace the convergence of IT and OT systems, be bold when assessing the benefits of edge analytics, and prioritize a human-centred approach to technology implementation.

The technology capable of turning traditional factories into tech-savvy smart factories is here, but the question remains: will industries seize the opportunity to evolve, or risk lagging behind in the face of economic uncertainty and skills shortages?

In this dynamic digital era, a readiness to embrace innovative tech could well define the trajectory of businesses in the years to come. Are you ready to face the challenges and opportunities that lie ahead?