THE rapid convergence of operational technology (OT) and information technology (IT) is ushering an age of digital industrial transformation, which is the next frontier for Philippine businesses, according to a top executive of General Electric Philippines.
“In the Philippines, majority of our sectors and industries are still brick-and-mortar and this presents different challenges compared to younger, more digitally focused companies,” said Jocot de Dios, CEO of GE Philippines, during the GE Digital Advantage Forum held recently at Seda Hotel in Bonifacio Global City in Taguig.
The forum gathered thought leaders from the public and private sector such as the Department of Information and Communications Technology (DICT), Microsoft Philippines, Endeavor, IdeaSpace Foundation, and Business Profiles, Inc., to assess the value and potential of digital transformation to the country.
According to the World Economic Forum, the Philippines ranks 76th out of 143 countries in terms of readiness for Information Communications Technologies (ICT)—trailing behind Malaysia (32), Thailand (67) and ahead of India (89) and Indonesia (79).
“The country’s ICT infrastructure still has plenty of room to improve in terms of readiness, policies, people, and economic impact,” said De Dios. “Similar challenges are consistent for local companies on a smaller scale.”
As an example, De Dios cited scheduled maintenance routines for power plants as a source of unnecessary downtimes, which is critical to provide the country a stable supply of power. Armed with state-of-the-art digital infrastructure, these facilities can monitor equipment more efficiently, and foresee other potential problems even before they arise—ultimately preventing unscheduled downtime.
For the next years, the challenge for Philippine companies is adapting to a market that will be disrupted by the introduction of new technologies. “Digital transformation is the what, but the how is the more difficult question to answer,” added De Dios.
The difference of 1 percent efficiency
For heavy industries, digital transformation entails extending automation to the cloud—enabling machines to make more accurate decisions to optimize performance. De Dios described it as a “universal cruise control” for operations.
Based on estimates from GE, a mere 1 percent improvement in efficiency through machine-to-machine communications could save up to $276 billion in just 15 years across five industries: rail, healthcare, power, and oil and gas.
With the introduction of software platforms, like GE’s Predix for the Industrial Internet, such possibilities are no longer as far-fetched as they were a decade ago. “In this day and age, every company needs to be—in some way—a software company,” stated Alvin Ng, GE Digital’s General Manager in Asean.
One of the many applications based on Predix is Asset Performance Management for predictive maintenance. The software analyzes data from machines to identify early-warning signals of damage, prompting repair and maintenance before they break down.
“The software can revolutionize how power plants work, fine-tuning gas turbines and wind turbines,” described Ng. “Companies who install advanced sensor technology, and the analysis apps and software available today, will better predict the performance of their machinery to reduce downtime, and maximize efficiencies, productivity, environmental gains and major cost savings.”
With the addition of its digital division, GE has expanded its portfolio from domain expertise in manufacturing and electronics to software development.
“The ‘Industrial Internet of Things’ is the next frontier for the country, spurring greater demand for flexible operating systems that optimize how machines connect and perform with one another. And its possibilities, for Philippine businesses and industrial operations, are game changing,” concludes Ng.
GE executives from the United States estimate that the Industrial Internet of Things will reach $225 billion in value by 2020.