AnalysisMind The Gap: Digital Transformation Tackles Unplanned Downtime

Mind The Gap: Digital Transformation Tackles Unplanned Downtime

Although businesses have always had to tolerate periods of unplanned downtime, historically, companies have just had to endure the pain, and try and stay on top of equipment maintenance and service requirements in the hope they can minimize such instances.

But all that’s changing. The shift to outcome-based business models, equipment assets becoming more sophisticated and connected, and of course, the pervasive and increasing reliance on machines, are all adding to the pressure to avoid outages – making unplanned downtime a strategic issue.

As asset equipment estates continue to proliferate, it’s becoming increasingly harder to monitor and address downtime.

And as digital transformation sweeps across organizations and customer expectations continue to rise, businesses simply can’t afford to be on the backfoot.

Take power as an example. In the US, Generating units are unavailable on average for 15% of the time due to outages and maintenance.

In fact, 6% of the time they are unable to meet demand at all.  And the Energy Information Administration highlights that a further 6% of electricity is lost in transmission and distribution due to both technical factors and outages.

The growing reliance on automation is already widening performance gaps. Businesses are losing sight of assets, especially in terms of efficiency, leading to a fractured insight of manufacturing or service delivery.

The upshot is that unplanned downtime becomes a real problem and even worse, the lack of visibility leads to an unnecessary lengthening of recovery time.

Closing this downtime gap is a fundamental step in an organization’s digital maturity, and a core part of their transformation journey.

It’s a costly problem that’s getting more expensive over time. According to a new Vanson Bourne global study After The Fall: Cost, Causes and Consequences of Unplanned Downtime, 82% companies have experienced at least one unplanned downtime outage over the past three years, and two on average. These outages have lasted four hours.

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Depending on the company and type of equipment, this can cost organizations anywhere from $50k-$150k per hour for say, a medical device company, and up to $2m for a major outage on an industrial critical asset. (Aberdeen estimates the cost across all businesses to be $260,000 an hour).

The research also revealed high levels of asset estate ignorance across organizations, with seventy percent of companies lacking full awareness of when equipment is due for maintenance, upgrade or replacement.

In addition to financial losses, the research found that almost a third of respondents said they were unable to service or support specific equipment assets, while 65% of respondents from the energy and utilities sector, and 62% from the medical sector cited losing the trust of their customers as a possible impact of suffering a high-profile incident or disaster.

Across all sectors, around one in ten admitted their company would never recover from such critical incidents and would ultimately cease to exist.

Nobody wants to be blindsided with those sorts of numbers. But what are companies doing about it? The research hints at a tipping point in recognition of the problem and planned investment to address it.

Over time, zero tolerance and zero unplanned downtime will become the norm as companies develop and invest in their industrial digital strategies. Key to this, is an understanding of and investment in field service management and asset performance management capabilities.

According to Vanson Bourne, eight in ten companies have already recognized this, at least that digital tools can improve visibility of assets and help eliminate unplanned downtime.

Around 50% of companies confirmed they plan to invest in field service and asset management technologies in the next three years, while 72% of firms claim that zero unplanned downtime is now a number one priority. So the message is sinking in at least.

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The challenge for most businesses is to digitally transform without losing oversight of key products, services and of course assets. Digital transformations do not automatically improve control and visibility.

Companies need to pursue a service-led approach to business, to ensure that their ability to manage the actual assets that make products or ensure services run smoothly are always up and running.

A clear asset management and predictive maintenance strategy should ensure that businesses take the right path towards reducing, if not completely eliminating downtime.

Understanding problems before they happen and having knowledgeable and digitally-empowered service technicians to ensure the smooth running of assets will go a long way to making this happen.

A digital twin of physical assets will help considerably here, and the research has revealed that around 54% of companies are planning to invest in a digital twin by 2020.

Throw-in the fact that field service is expected to become a primary revenue driver for most businesses within the next two years and you have a recipe for transformation.

Will it be for the better? If zero downtime is important to a business – and it should be – then yes. And until a time when machines can actually fix themselves or not break at all, it is in fact the only transformation worth considering.


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