Digital transformation and data have become key talking points for all industrial companies and the fervour is only growing. The pandemic has accelerated the pace of innovation, creating a clear divide between early adopters and laggards.
In an IDG Research survey, 59% of IT decision-makers say pressures are pushing them to step up their digital transformation efforts. Yet only 32% of companies are realizing measurable value from their data and only 27% have data projects producing highly actionable insights according to a recent survey by Accenture. The same study found that one of the biggest blockers for those companies is the lack of an enterprise-wide strategy for data.
During our webinar, Data: An Untapped Resource for Industrial Companies, our CEO Geoff Mair interviewed Corrie Banks, Director of Logistics of Cando Rail Services. Partnering with us, Cando successfully incubated an in-house tech startup called Quasar from within their existing organization. They’re giving new meaning to the term digital transformation, launching an entirely new business unit that leverages their deep expertise with supply chain management and their dogged determination to establish real-time visibility into the entire supply chain for rail companies.
Here are our seven key takeaways from the webinar, which included a Q&A with Corrie.
1. Digital disruption is here to stay
“Digital transformation is not just another IT project,” says Geoff. “It’s a rethinking of how a company offers more or different value to its customers using digital practices.”
The next wave of digital transformation is happening now and it’s being enabled by huge advances in four technologies. Big Data, Cloud Compute, IoT and AI. These four technologies combined allow any company to collect and process massive amounts of data, where it was previously not practical. The kinds of data that are absolutely necessary to find areas for improvements and create new value for customers.
Digital transformation is not merely about making manual processes digital, but about finding ways to leverage technology and improve the customer experience.
2. The 3 vectors of digital innovation
There are three vectors that are part of effective digital innovation. They are:
- Radically lower costs and increased productivity
- A vastly better customer experience
- New business models and product offerings
Quasar has made improvements in the rail industry across all three vectors. With so much upside potential when digital transformations are handled well, it’s no wonder that industrial companies are beginning to feel a sense of urgency to be more forward-thinking.
“Most informed CEOs today recognize the shift is happening and are prioritizing it,” says Geoff.
3. Silos are still the biggest barriers to digital transformation
One of the biggest blockers to digital transformation is the fact that companies are already collecting and storing a lot of disparate data. It’s the notion of combining them all in one platform that is daunting.
The traditional methods used to detect, communicate and prevent real-time problems in physical operations are siloed, manual, too slow and too inaccessible to front-line workers. That this is largely the result of having a multitude of disconnected systems and silos of data.
“The result is that operations are disconnected, without the ability to predict problems, automate processes and empower front-line workers to be productive, efficient and informed,” says Geoff. “This problem of disconnected data is what we call one of the largest blockers that affect digital transformation and it’s the one that we focus the most on solving for our customers at SensorUp.”
4. Combining asset visibility with cost and revenue data is where the magic happens
Cando’s new Quasar product can combine real-time asset visibility with commodity, cost and revenue data. This creates visibility to supply chain operations, supply chain issues, and supply chain costs. With that info, they can identify opportunities to improve operations and reduce costs.
The problem with rail companies historically is that while they do track their assets, the data is old and irrelevant even as it’s being collected. “People are manually fixing data in their systems in order to update information,” says Corrie. “They do things like walk track and drive trucks to count railcars with a pen and clipboard.”
Cando knew they wanted a platform that would give visibility onto the whole supply chain, to really figure out what’s happening. In the rail business, notes Corrie, there are thousands of issues that happen every day. Most of the systems in the supply chain today focus on operations management, with financial data handled separately.
“The problem with not having operations and financial data together is that when you have a lot of issues you can’t identify and measure the opportunities for improvement,” says Corrie. “SensorUp has enabled us to take all of this data into one place and visualize that data so that you can draw some insights into your supply chain. You don’t need a degree in data science to deal with these analytics. The key part of this is, all of that data has to come together somehow.”
5. Get intrapreneurial to innovate: Creating a startup culture within your larger organization
One of the most fascinating things about Quasar is that Cando did not simply look to digitize their processes. They went all-in and created an innovative product that will help solve issues for their peers in the rail industry. To achieve that, they had to do a lot of change management in-house and embrace a startup mentality.
“Brian Cornick, our CEO, always saw this is as its own product,” says Corrie. “We (Cando and Quasar) are separate but integrated.” The Quasar team had to operate a lot like a software startup and luckily for them the mindset of their parent company was already very forward-thinking.
“Yes, we had to create a bit of startup culture inside of Cando. We’re super lucky because the organization was already like that. The team that we have acts like a software company and operates within Cando, but we are not structured the same way. We are lean and nimble and super creative with how to get where we want to go. We are very blessed that we have the full support of our CEO. We’ve been able to leverage the very best of our organization and its growth mindset.”
6. There are advantages to working with partners on a digital transformation
During the webinar fireside chat, Geoff asks Corrie about Cando’s choice to use a hybrid model — that is, partnering with us at SensorUp to develop the technology and realize their vision.
“I’m a supply chain expert,” says Corrie. “I’m not a technology expert. We decided strategically that we were going to find partners that really knew what they were doing.”
“We have skinned our knees and found relationships that didn’t work. We have a huge amount of knowledge in supply chain and rail, but not the depth of knowledge that we felt we needed when it came to cloud-based technology and IoT (the Internet of things). We didn’t even really know what good looked like at first.”
After their initial missteps, Cando met with our team and agreed to proceed with a partnership approach. “Now I would say the best decision we ever made was to find companies like yourselves and partner with you,” says Corrie. “It helped us develop our strategy and it meant we have a team that could really deliver what we want to deliver.”
Bonus Takeaway: Cloud-based technology lives up to the hype
Having successfully incubated a tech startup from inside their company, Quasar now finds themselves in a position very common to tech companies — having to explain the value of their technology to industry skeptics who don’t yet see the massive upside potential of digital innovation.
“It’s taken a while for us to educate people on why digital technology is better,” says Corrie. “I’ve had people tell me very sincerely that they know where the rail cars are. And I tell them very sincerely ‘No, you don’t.’ The reason is that I can see both sets of data.”
“There’s a huge amount of education not just on why this is important for the rail industry but also how the cloud works,” says Corrie. “Why it’s is so much faster, so much better, so much more reliable, and so much more scalable. The good news is that we’re starting to see a lot of adoption and digitization at the industrial level. It’s really starting to help us a lot more when we’re out there talking to people.”
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