The IT organization will play a key — but by no means leading — role in digital transformation initiatives, argues ThyssenKrupp’s Patrick Bass.
Who should ‘own’ a major Internet of Things (IoT) program? That’s a question the executive management team at industrial giant ThyssenKrupp has wrestled with, and answered unequivocally.
Over the past five years, as it has sought to exploit IoT to bring connectivity and device intelligence to the million-plus elevators it operates worldwide, that ownership has moved far beyond the project’s origins as ‘a crazy idea in the R&D department.’ Now seen as key to forging the company’s next-generation business model — as well as fending off any potential digital disruptors — its IoT program is driven from the highest levels of the company.
“The key to realizing an Internet of Things journey is buy-in from the C-suite,” says Patrick Bass, CEO for North America at the €43 billion ($48bn) diversified industrial group. “Specifically, while managing through that IoT journey, the CEO needs to share and be able to articulate the vision.”
Given the digital nature of the technology, however, it might be logical for the IT organization to be in the driver’s seat. But that, Bass believes, would narrow the ambition. “Naturally, the IT team at ThyssenKrupp wanted to own, to control this,’” he says. “But this is not an IT project; this is not an R&D project. IoT is a business transformation project.”
“In the case of MAX, [the elevator business’s IoT-enabled, cloud-based solution for predictive maintenance] we’re talking about core operations, the product of elevator service, so we treated it more as we did with ERP, as a business transformation project rather than just labelling it as only an R&D or only an IT project.”
Although Bass admits the decision to place IT in an expert advisor role was far from easy, the company has since concluded in a lessons-learned review that board-level ownership was pivotal in bringing its IoT project successfully to market — and in the paybacks it has already seen since MAX’s launch in October 2015.
IoT without borders
“The scale of this means you have to include all different aspects of the company — R&D, IT, supply chain, the field service organisation, legal,” he says. In the case of legal, for example, there are questions about data ownership that need resolving: “Are you going to sell [the data you gather from sensors] or are you going to give it away to customers? Can you actually give it away in all countries in which you operate?”
“You can’t restrict IoT to one part of the business. It’s really a very comprehensive, vast project,” Bass argues.
• Photography: Matthew Stylianou