Unlocking business value: The power of IT and OT convergence

I. Executive summary

In this hyper-connected digital world, manufacturers have access to varied data sets yet struggling to extract timely actionable insights that can help contain costs and grow revenues. The challenge lies in integrating this data, particularly the crucial operational data generated by operational technology (OT) systems at shop floor, with traditional information technology (IT) data at top floor. While the key lies in bridging the gap between IT and OT for unlocking the transformative power of converged data, there is a difficulty in making it scalable and repeatable¹.

OT systems, the backbone of industries such as manufacturing, energy and utilities, monitor and control physical devices, processes, and infrastructure. From programmable logic controllers (PLC) and supervisory control and data acquisition (SCADA) systems to industrial robots and battery management system (BMS), OT helps ensure the smooth operation of critical infrastructure. Conversely, IT systems manage information, encompassing data storage, processing, and communication through servers, networks, and applications such as enterprise resources planning (ERP), supply chain management (SCM), human capital management (HCM) and customer relationship management (CRM). While IT systems are crucial for informed decision-making, OT systems are essential for making things happen in the physical world.

IT and OT convergence connects these previously siloed realms, creating a unified view of operations. This powerful synergy empowers businesses to:

• Drive operational excellence: Real-time data optimizes processes, reduces downtime through predictive maintenance, improves resource allocation, and enhances supply chain agility.
• Make smarter decisions: Data-driven insights across the organization, from the shop floor to the boardroom, enable better, faster decisions, improving forecasting, planning, and risk management.
• Unlock new revenue and business models: Data becomes a strategic asset, facilitating the development of innovative digital products, personalized customer experiences, and data-driven business models.
• Enhance safety and compliance: Integrated data and analytics improve safety monitoring, prevent incidents, and strengthen regulatory compliance.
• Foster innovation: By breaking down data silos, IT and OT convergence creates a foundation for experimentation, new technology adoption, and continuous improvement.

This blog provides a comprehensive guide to navigating the complexities of IT and OT convergence, offering insights into the key capabilities, business outcomes, and practical steps needed to achieve success.

II. Convergence imperative and challenges

In the modern industrial landscape, data has become the cornerstone of strategic decision-making and competitive advantage. The convergence of IT and OT is not just a technological trend but a business imperative that enables organizations to harness the full potential of their data.

However, many businesses are struggling to fully realize that potential. While IT systems provide a wealth of information about customers, sales, and finances, the critical missing link is often the real-time, granular data residing within OT systems. This is where the power of IT and OT convergence comes into play. By connecting these previously disparate worlds, businesses gain a holistic, real-time view of their operations, from the enterprise level down to the shop floor.

There are already many Industry 4.0 digital strategies at shop floor that have taken shape from the global lighthouse network² initiative including smart manufacturing, digital twin, industrial internet of things (IIOT) and those are gradually enabling the near real time linkage between physical and digital worlds. For instance, for a robust digital twin application, IT and OT convergence is the prerequisite to enable smooth flow of data.

But ingesting time series data from thousands of sensors distributed throughout the plant location to digital twin application to analyze and identify trends and anomalies at real time has been a major obstacle. This challenge stems from the sheer volume and velocity of the data, coupled with the need for extremely low latency to enable real-time insights.  Addressing this bottleneck is critical for unlocking full potential.  Fortunately, there have been recent updates regarding real-time data capabilities in Microsoft Fabric³ and the Microsoft partnership with NVIDIA³, which offer a promising pathway to overcome these limitations.

Real-Time Intelligence in Microsoft Fabric now offers enhanced capabilities for ingesting, processing, analyzing, and visualizing real-time data. This includes:

• Real-time Hub: single place to discover, manage and use event streaming data from Fabric, other Microsoft data sources, and external data sources.
• Eventstreams for capturing, transforming, and routing real-time events to various destinations with a no-code experience.
• Eventhouse and Kusto Query Language (KQL) database are the ideal analytics engine to process data in motion. They're tailored to time-based, streaming events with structured, semi structured, and unstructured data.
• Activator that integrates with Real-Time hub, Eventstreams, real-time dashboards and KQL query sets, making it seamless to take action on any patterns or changes in real-time data.

Refer to this below architecture of Microsoft Fabric Real-time Intelligence solution:

Refer to this below architecture of Microsoft, NVIDIA Omniverse digital twin solution.

III. Business outcomes of IT and OT convergence 

While recent advancements in real-time monitoring and data-driven decision-making⁴ are encouraging, realizing the full potential of these capabilities remains a challenge.  A critical gap exists between the available data and the actionable insights needed to drive meaningful improvements. This gap is due to a combination of factors.  Technically, the lack of a common data platform and concerns about data security hinder effective data utilization.  Furthermore, organizations often lack the necessary business capabilities to translate data into action.

The recent cyberattack on a leading consumer goods company⁵, resulting in significant operational disruptions and approximately $356 million in losses (roughly 5% of total revenue), underscores the urgent need for IT and OT convergence. Such convergence would enable unified security measures to proactively detect, mitigate, and ultimately prevent such threats.

Manufacturing organizations are inherently focused on plant operations and automation, requiring well-defined procedures and specialized knowledge to run processes effectively. As plant operations produce time-series data, which is unique, the need to store and process the data also needs unique solutions with secured access for control and collaboration. However, those unique solutions need hard dollars to be spent and leadership commitment to execute. Therefore, establishing specific, measurable business outcomes is the crucial first step for successful IT and OT convergence initiative.

Some key outcomes influenced by IT and OT convergence include:

• Enhanced operational efficiency: Reduced downtime through predictive maintenance; optimized production schedules and resource allocation; improved supply chain visibility and agility; and streamlined processes with reduced waste.
• Enhanced decision-making: Real-time insights into production performance and key metrics; data-driven decision-making across the organization; improved forecasting and planning; and better risk management.
• New revenue streams and business models: Development of new digital products and services; personalized customer experiences; and the creation of data-driven business models.
• Improved safety and compliance: Enhanced safety monitoring and incident prevention; and improved regulatory compliance.
• Sustainability improvements: Optimized energy consumption and reduced environmental impact.

The key to unlocking these outcomes lies in strengthening specific, strategically aligned business and technology capabilities. Organizations have to move beyond simply adopting new technologies and instead focus on developing capabilities that directly support their business objectives.

IV. Key capabilities enabled with IT and OT convergence

So, how does IT and OT convergence translate into tangible improvements? It does so by enabling a set of key capabilities that drive efficiency, agility, and innovation. These capabilities, across various functions, provide the building blocks for achieving the desired business outcomes. Let's examine some of the most impactful capabilities. 

These impactful capabilities are not achieved overnight. Implementing IT and OT convergence requires careful attention to a range of practical considerations, from technology and infrastructure to organizational change and data governance. Let's examine the key practical aspects that organizations must navigate:

• Technology and infrastructure:
• Choosing a platform that unifies data from IoT, Edge and Cloud systems
• Ensuring data security and integrity.
• Addressing interoperability challenges.
• Organizational and cultural change:
• Breaking down silos between IT and OT teams.
• Developing new skills and competencies.
• Fostering a culture of data-driven decision-making.
• Data management and governance:
• Establishing data governance frameworks.
• Ensuring data quality and consistency.
• Managing data privacy and compliance.
• Cybersecurity:
• Addressing the unique cybersecurity challenges of converged IT and OT environments.
• Implementing appropriate security measures.

Successfully navigating these aspects is crucial for realizing the full potential of IT and OT convergence. It's a journey that requires careful planning, strategic investment, and a commitment to both technological and organizational transformation. By proactively addressing these key considerations, organizations can lay a strong foundation for a connected and intelligent future.

V. What are the solutions available for IT and OT Convergence?

The Microsoft Adaptive Cloud framework⁶ offers a unique tech stack to simplify the plant to edge to cloud integrations and drive the outcomes for tangible business results. It is a framework that unifies siloed teams, distributed sites, and sprawling systems into single operations, application, and data model, enabling organizations to leverage cloud-native and AI to work simultaneously across hybrid, multi-cloud, edge, distributed computing and IoT.

Below is the summary of business architecture that can be enabled with Adaptive Cloud approach. Following the Business Outcomes Approach⁷ (similar to AI Outcomes referred in the earlier white paper) and tying the benefits to underlying key performance indicators (KPI), organizations can drive a strategically aligned IT and OT convergence initiative. This approach helps ensure that technology investments directly contribute to overarching business goals, rather than being driven by technology for its own sake. By clearly defining the desired business outcomes and measuring progress against relevant KPIs, organizations can maximize the return on their IT and OT convergence efforts and make sure that the initiative delivers tangible value.

VI. Conclusion

While the benefits of IT and OT convergence are clear, achieving this integration requires addressing several challenges, including data integration, scalability, and cybersecurity. By leveraging advancements in real-time data capabilities and by adopting a holistic approach focusing on measurable business objectives, organizations can unlock the full potential of their data and achieve lasting success.

We hope this blog provides some valuable insights into the transformative power of IT and OT convergence. For more information on the outcomes approach & adaptive cloud, please reach out to your Microsoft Account Executive.

Sources:

¹IT/OT convergence in scaling business operations | McKinsey

²https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-are-industry-4-0-the-fourth-industrial-revolution-and-4ir

³What is Real-Time Intelligence - Microsoft Fabric | Microsoft Learn

³Connect Real-Time IoT Data to Digital Twins for 3D Remote Monitoring | NVIDIA Technical Blog

⁴Manufacturing Execution Systems Market Size Report, 2030

⁵Scimeca, D. (2023, December 1). Clorox cyberattack cost $356 million. https://www.industryweek.com/technology-and-iiot/article/21274431/the-clorox-co-recovers-from-severe-cyberattack

⁶ Adaptive Cloud | Microsoft Azure

⁷https://www.linkedin.com/posts/gk-gopi-krishna-akella-4633532_ai-outcomes-framework-white-paper-activity-7148719337242042368-egTL?utm_source=share&utm_medium=member_desktop&rcm=ACoAAABoL8sBvcWkLj3iGKH0tJzdcvBGIxSzuz8

Other Sources reviewed as part of the research

https://www.mckinsey.com/industries/industrials-and-electronics/our-insights/digital-twins-the-key-to-smart-product-development

More than 80% of industrial operations security incidents analyzed started with an IT system compromise - https://www.rockwellautomation.com/en-us/company/news/blogs/ot-incident-response.html 

https://news.microsoft.com/source/canada/features/ai/how-ai-is-transforming-cybersecurity-tackling-the-surge-in-cyber-threats/