Business Reporter – Management – The Power of Connected Digital Ecosystems

AVEVA’s Caspar Herzberg says connected ecosystem will catalyze industry growth

Attending Hannover Messe and the World Economic Forum (WEF) in Davos, I reflected on how these events strengthen partnerships between countries and sectors. Without cooperation, we simply would not get far in business.

Industrial companies are recognizing this fact and are starting to cooperate within mutually supportive ecosystems, creating integrated value chains that bring a wide range of benefits.

A business ecosystem is an integrated, trusted network of organizations, partners, suppliers, customers, and other entities, such as regulators, that collaborate and interact within a specific industry or market. Each entity contributes to and depends on the success of the others.

While it would be difficult for any single company to make any significant progress in optimizing operational efficiency or increasing sustainability, the ecosystem as a whole, working together, is better able to innovate and leverage data to drive transformation.

Top performers rely on business ecosystems

In fact, entire business sectors—such as ride-sharing, e-commerce, and digital payments—depend on collaboration for their success.

Entities operating within an integrated ecosystem benefit from economies of scale while achieving sustainable results and increasing innovation, flexibility and market efficiency.

According to a PwC study of 2,006 leaders from companies in the UK, US, Germany and Australia with median revenues of over $650 million in 2023, business ecosystems are closely linked to the success of the best companies.

These top performers make over 60% of their money from ecosystems. They are building future resilience by making business and technology investments that enable them to continue to benefit from these influential networks.

Trusted data is the DNA of these new types of business ecosystems, and interoperability is their lifeblood. The industry is clearly moving in this direction, with 43% of executives at industrial companies believing that a secure data sharing and collaboration platform has the greatest potential to drive opportunities for their business over the next 12 months, according to AVEVA’s Industrial Intelligence Index.

Connected data creates a digital source of truth

As early adopters demonstrate, connecting data across organizations and value chains enables cross-functional teams to collaborate around a single—and living—digital source of truth. When hosted in the cloud, this federated approach gives each entity ownership of its own information, as well as a clear understanding of the big picture—all in real time.

Additionally, advances in AI allow organizations to sort through data much faster and access the most important insights, which translates into greater value.

Think of it as the democratization of industrial intelligence. Armed with the right intelligence, players across the ecosystem can make fast, evidence-based decisions to maximize new opportunities and increase sustainability. This will be key as the world moves toward Industry 5.0—an industrial economy that leverages technology to drive a more sustainable, human-centric world.

In capital projects, for example, this type of trusted, unified system built around a digital twin enables engineers from different disciplines to work in parallel from a single database. All documents and models are automatically updated when changes are made. This enables better collaboration between teams and ensures greater efficiency in engineering efforts during the design phase.

Greater competitive advantages will result from the introduction of artificial intelligence (AI) throughout the system. Not only do predictive and prescriptive analytics offer the ability to test new concepts and forecast potential outcomes in detail, but AI algorithms can also drive continuous improvement iteratively, ensuring that products and services evolve in anticipation of customer expectations and evolving environmental, social, and governance (ESG) regulations.

Sustainability through ecosystem thinking

Sharing data across the ecosystem enables end-to-end optimization. By sharing data in the cloud, organizations can identify small inefficiencies throughout the industrial process to ensure optimal resource utilization and reduce their carbon footprint. Viewing data at such a large scale allows stakeholders to leverage these insights to determine where sustainability efforts can have the greatest impact.

Because each player is able to recalibrate in real time as data insights are revealed, small incremental gains accumulate over time, creating a dynamic that drives both sustainability and revenue growth. This can be as simple as turning off some machines when not in use or consolidating production to use the least amount of energy.

Ultimately, using software to share information with partners, customers and suppliers allows businesses to operate more efficiently and engineer more sustainably.

Real-time energy data opens up new revenue streams

In California, energy consulting firm ZGlobal and its partner Silicon Valley Clean Energy have created a data-sharing ecosystem using our technology. From energy producers to purchasers, schedulers, suppliers and customers, every authorized stakeholder benefits from a holistic view of the value chain, with increased energy transparency, traceability and security across the system. Thousands of dollars are being saved in energy procurement while companies accelerate North America’s low-carbon energy transition.

Data shows that this type of integrated ecosystem thinking, where stakeholders share industry knowledge, enables industry leaders to achieve 10% higher profitability, three times higher return on investment and up to 20% higher sustainability performance.

Furthermore, data-sharing communities provide organizations with both the data sources and the additional context needed to accelerate R&D and collaborate to increase innovation, leading to mutually beneficial competitive advantages.

Embracing Industry 5.0

As we move towards Industry 5.0, connected ecosystems will play a key role. This new frontier goes beyond the automation focus of Industry 4.0 to emphasize human-machine collaboration and sustainability. Industry 5.0 aims to leverage technology to create environmentally conscious industrial systems characterized by efficiency, resilience, and deeply integrated AI and human intelligence.

Problems in perspective

Industrial companies will face increasing operational complexity, from stricter sustainability targets to ongoing labour shortages, supply chain disruptions and rising prices.

In business, trust has become more important than ever. By offering transparency, consistency, and accountability, unified digital insights support collective and sustainable growth for every connected entity, turning problems into opportunities.

Connected industrial ecosystems will support sustainable economic growth over the next decade. They are exactly what we need as Industry 5.0 arrives, where robots and intelligent machines work hand in hand with humans towards resilient, sustainable outcomes for society as a whole.

The future of industry is collaborative, adaptive, and human-centric – and it is driven by the transformative nature of ecosystem thinking.

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Caspar Herzberg is CEO of AVEVA

Main image courtesy of iStockPhoto.com and dk1234