The wall between IT and OT is crumbling fast

Soma Tah

Who says Oil and Water don't mix?

Until a few years back also, Information Technology (IT) and Operational Technology (OT) used to remain in silos - almost like Oil and Water. But with the advent of The Industrial IoT(IIoT), connecting physical with digital is possible now. IoT, cloud, and  analytics have enabled manufacturing companies to contextualize real-time data from IT or OT.

The year 2017 saw the integration of IT and OT as the footing for smart banks, smart retail, smart transportation and smart manufacturing, etc. Hubert Yoshida, Global CTO, Hitachi Vantara believes that more enterprises will now be on the look-out for feasible data integration tools to integrate their IT and OT data.

He speaks more on how the world of IT and OT have come together with IoT, cloud, analytics, and despite the integration challenges, how they are helping organizations to create competitive differentiation in the market.

How is the rise of cloud, analytics, and IoT impacting the OT-dominated industries? Could you share some of the trends related to IT/OT convergence?

Cloud, analytics, and IoT will greatly enhance OT dominated industries, and enable greater efficiency, security, intelligence and profitability for the enterprise.

For example, SCADA (supervisory control and data acquisition) is a system combining software and hardware elements, for industrial process control, for real-time data collection locally and from remote locations in order to make smarter decisions. With the availability of cloud computing, OT systems like SCADA can adopt IoT technology to significantly improve interoperability, reduce infrastructure costs and increase ease of maintenance and integration. As a result, OT systems can now report state in near real-time and use the scalability available in cloud environments to implement more complex control algorithms that are practically feasible to implement on traditional programmable logic controllers.

The use of open network protocols such as Transport Layer Security (TLS) inherent in the IoT technology, provides a more manageable security boundary than previous OT systems. OT systems were designed to be open, robust and easily operated and maintained but not necessarily secure. Security becomes much more important as critical OT infrastructure comes under attack.

The decentralization of data also frees up the data that is locked up in traditional Programmable Logic Controller (PLC-which is an industrial computer control system) memory addresses and makes it available for data modelling techniques like asset avatars which are virtual representations of each device in software. These avatars can also include other pertinent information like web-based information and database entries that may be used for other facets of the IoT implementation.

To what extent can asset avatars help in bridging the gap between physical and digital?

Asset avatars drive automation and predict lower operational costs for enterprises to accomplish the digital transformation. With seamless integration, it creates a digital representation of a physical asset to map unintelligible data into understood information.

If you look at Hitachi’s Lumada IoT platform, the core asset avatar is a computerized version of a real machine that can monitor and effect changes on the physical machine. We collect data, create an asset, capture, analyze and secure data to help businesses visualize data of the physical asset through a digital avatar. The platform has dynamic design features, rich analytics, and robust asset management capabilities that simplify the creation of asset avatars, allows data to be easily ingested, transformed, and analyzed in close proximity to physical assets and blends OT and IT data to uncover patterns. Therefore, these asset avatars can provide a 360-degree view of an organization’s assets to deliver a wealth of data to help achieve new levels of competitive growth and differentiation in the market.

While the convergence of IT/OT is certainly a new reality, what kind of implementation challenges does it bring along?

IT and OT have traditionally been different parts of the business with different objectives. OT was focused on operations management, while IT was focused on business management. They had different compute, networking, and user interface system. IoT provides the opportunity to bring these worlds together. The IoT technology is key, but more important will be the people and process challenges. Choose partners who have both IT and OT experience to help bridge the gap and implement cross-functional agile teams.

Back in 2011, Gartner advised IT leaders to prepare for the transition of their organizations to the integration of IT and OT environments. Fast forward to 2017, here are some alarming statistics based on our analysis: a whopping 40 per cent of customers have embarked on digital transformation (DX), but many of those projects have failed, while 6 per cent of the business leaders hasn’t planned any DX initiatives at all. Furthermore, only 5 per cent of data is being analyzed, and only 0.5 per cent of that data is being operationalized. The integration of IT/OT can be challenging, and the degree of difficulty depends on the type of business. Many times, it is less about the technology and business but more about people.

At Hitachi Vantara, we have evaluated a few potential business risks that caused DX initiatives to fail and classified them into four broad categories –

-Poor leadership in execution of strategies

-Siloed data across applications and cloud

-Siloed organizations leading to lack of collaboration to accelerate data-driven initiatives

-Fixed mindsets of people across multiple levels in the company

Our 107-year OT and 58-year IT legacy along with the existing technology assets deepens our domain expertise. We aim to work with customers to overcome their challenges by utilizing our OT expertise to analyze data on their facilities, equipment, and personnel together with data from commercial departments to provide meaningful business outcomes.

Do you see any possibility that the responsibilities of CIOs could be taken over by the Chief Digital Officers (CDO)?

I personally believe that the CIO needs to step up to be the CDO. As enterprises look at digital transformation, the role of CIOs will transform too. Being a key part of technology-driven businesses, it becomes important for CIOs to understand the significance of disrupting themselves and their clients. They can do this by aligning and reskilling their strategies to transform IT. With the development of newer technologies, enterprises are looking at a digital future. This is where CDOs come into play, as they help disrupt businesses with their digital strategies. In Hitachi Vantara, our CIO Renee Mckaskle drives our digital transformation as part of our corporate Agile team.

Do you see an increasing trend towards co-creation service as the world of IT and OT come together?

Yes. Traditional business thinking starts with the premise that the producer autonomously determines value through its choice of products and services. Consumers have typically been consulted through market research and were passively involved in the process of creating solutions and value.

But, in the digital world, the pace of change is relentless and problems span across multiple domains, with a blurring of industry domains and boundaries. Producers cannot take years to develop a solution and consumers cannot plan their businesses on multi-year roadmaps that may not deliver what they need. If consumers and producers are to innovate, they must be active participants in the value creation process as co-creators, which is one of the IT trends that we can look forward to this year.

In 2018, we will witness a shift in value creation, away from producer-centric, solution-value creation to a co-creation paradigm of value creation. We have been co-creating with many customers and have developed a co-creation methodology that we expect will see a further uptake in 2018.