Interest among the Middle East healthcare, manufacturing and utilities sectors to adopt digitisation has risen exponentially over the past 18 months, and it is driven not by technology but by the need to become more productive and efficient.
“When I used to come here two to three years ago, everybody would ask me why do we do it, and now I get asked how, how do we do it?” Bill Ruh, chief digital officer of US-based GE and CEO, GE Digital, tells MEED. “It’s not about the technology, it’s about everyone looking for productivity and efficiency around what they do.”
Indeed, it is not unlikely that the sustained low oil prices since 2015 have contributed to the region’s increased interest in adopting new technologies to make human and capital assets more productive.
Similar to other regions, however, a major skills gap is expected to slow down the Middle East and North Africa (Mena) region’s industrial digitisation projects. Indeed while many industries across the region have had a good experience in implementing back-end applications such as enterprise resource planning (ERP) and customer relationship management (CRM), numerous technology stacks that are relatively new lie underneath every digitisation project. They include mobility, cyber security, big data, machine learning and blockchain, to name a few.
All of these technology stacks are suffering from a shortage of skills globally, not least because the majority of those that are available are already working on consumer-based internet-of-things (IOT) projects in Seattle or Silicon Valley, explains Ruh. “Across the globe, whether in US, China, Asia, Europe, very few companies have any talent or only have minimum amount of talent and they mainly have it in one or two areas like cloud or machine learning… what we’re seeing is they [Middle East] are not farther behind that they can’t catch up,” says Ruh. “The good news is you don’t have to do this in one day; it’s going to be a 10-year journey…it took Amazon and Google 10 years to get to what was envisioned.”
Industries on edge
Industries have been trailing the consumer and retail markets in terms of IOT in part due to the more complicated process of collecting and processing industrial data. Just a few years ago, most companies in the region’s process industries have ruled out using the internet or the public cloud for operational processes due to significant cybersecurity risks as well as the need for real-time data.
But these companies are understood to have adopted a softer stance toward cloud technologies over the past few years. “The architecture in the industrial world for connecting machines has changed and … the way the cloud get used [by industrial companies] is different,” explains Ruh. “You still have to do a lot of local processing at the edge…but that’s because you still have a real-time need on how to control a power plant or factory or oil field.”
Ruh, who has been driving GE’s digitisation strategy across the board and who is responsible for GE’s industrial internet-of-things (IIOT) platform Predix, says technologies on the edge, or those that are embedded in industrial machineries, will increasingly mimic what’s on the public cloud. He foresees that most industrial companies will use edge computer processing to provide deep analytics in real-time closed-loop systems and use the public cloud for massive amounts of operational data that “can be used to optimise their operations over long periods of time and allow them to provide a new set of applications for both customers and employees.”
The executive is also quick to point out that a lot of the industrial companies’ concerns like the lack of security in the public cloud have turned out to be totally unfounded. “Security among public cloud providers are significantly better than what most companies can provide themselves and people are recognising that. The bigger issue is not whether to utilise the public cloud but one of data sovereignty,” Ruh tells MEED, referring to regulations determining the legal and physical location of a company’s data.
Indeed, the lack of clarity in terms of data sovereignty among many countries in the region has highlighted the need for both international and regional cloud providers like Amazon Web Services (AWS) and Microsoft Azure to build in-country facilities in the region. AWS, for instance, expects to complete its first three data centres in Bahrain in 2019.
Making the case for Predix
Saudi Arabia-based Obeikan Investment Group, which operates more than 20 factories in food and beverage and consumer packaging sector, signed up for Predix, GE’s industrial internet-of-things (IIOT) platform, in November 2017.
The contract with Obeikan is significant not just because it represents a non-traditional sector for the US-based firm, which has long considered aviation, power, utilities, healthcare and transportation, among its core sectors, but because it opens an opportunity to partner with Obeikan in order to close more sales in that sector.
Indeed, Ruh’s regular trips to the region has been paying off well with GE understood to have closed three Predix deals in partnership with Obeikan in the first half of 2018.
And Ruh expects to sign up more contracts for Predix, which he says already has 1,000 users globally.
“These investments, while they are expensive, are cheaper compared to an ERP. This technology is about how you make money,” explains Ruh. “We show a customer what the outcome is going to be, how much are they going to save… how much more are they going to generate. And they can build a business case or plan against it. Often times we are paid on helping them achieve those objectives,” Ruh says.
In addition to pursuing an outcome-based strategy, where customers generally pay for subscription rather than a software license, Ruh points out to their willingness to respond to the way customers want to do business as a key selling point. An example of this is the flexibility offered by Predix, which supports clients regardless of the preferred location of their data, whether fully in the cloud, on premise or a hybrid between both.
In addition to working with Azure and AWS, GE also works with regional providers like Mobily to solve customers’ specific problems. “We will use other cloud providers in the region to solve specific problems, we will put pieces of our product line there,” says Ruh.
Unlike its rival, Germany’s Siemens, which has launched a pilot project to build a fully autonomous power plant within five years’ time, GE is understood to favour a phased approach to achieving a fully autonomous plant. Ruh says one option is to look at the autonomous vehicle (AV) world, which created a five-level AV definition
“We have to do that for [power] plants,” says Ruh, stressing that a ‘lights-out, no people’ plant is likely going to take time. “I’m not sure if we will get there or if we want to ever get there… There are still activities better suited for people. We’ve seen autonomy fall apart in AV in cases when a non-standard situation shows up.”
The executive, however, cites that he expects to see greater autonomy especially for dangerous, dirty and dull activities [in a plant setting], which will then allow people to focus on what they do well like organising and optimising around non-standard situations to ensure there is alignment to the business and to making money. “That is going to be done by people for a long time to come,” he tells MEED.
Contrary to prevailing opinion, the availability of cheap and unskilled labour in the Mena region does not necessarily stand in the way of companies adopting digitisation initiatives.
According to Ruh, the holy grail of digitisation lies in turning cheap, unskilled or less-skilled workforce into skilled labour that gets the job done more efficiently and effectively. “That’s where the money is to be made and a lot of really smart companies are doing just that,” Ruh says, citing that China, which is often characterised as the home of cheap labour, is also leading in the global digital transformation process.
It is understood that the availability of information arising from the collection and processing of data from machines and employees that can be utilised in training and upskilling employees is a crucial development in the digitisation journey.
Ruh cites an important starting point, that when companies allow employees to see information about their jobs and how their jobs are tied up to this information, they can better evaluate themselves and advise on how to improve the way they do their jobs. “The key is how do you take digitisation to turn cheap labour into skilled labour,” Ruh explains.