How to Use ERP to Converge IT Systems and Operational Technology

How to Use ERP to Converge IT Systems and Operational Technology

Author: | Published: 01 Nov 2019

Using ERP to Converge IT Systems and Operational Technology

Traditionally, manufacturing companies maintained a clear line between their IT systems and operational technology (OT) – that is, the tools and machinery that produced or processed what they were selling. Thanks to rapid advances in connectivity and the advent of the Internet of Things, that’s all changing.

The result is a convergence of  IT systems and Operational Technology, with the gap between these previously separate functions becoming vanishingly small. The introduction of sensor technology at every stage of the manufacturing process has given managers unprecedented visibility into workflows. OT is now generating data streams that allow informed, instantaneous decisions to be made.

Initially, this convergence proceeded at quite a slow pace as legacy were not designed to be operated in this way. Rather, they relied on direct human inputs for adjustment and the reporting of faults or errors.

Integration Challenges

This presented business leaders with the challenge of integrating this legacy (or Industry 3.0) systems with newer technologies. Machines could be replaced with more intelligent versions, but this, of course, has investment implications.

Instead, much of the focus has been on integration and bringing OT and IT closer together. This has been made possible by advances in sensor technology and connectivity, and the capacity of the cloud to store and share data between what were previously discrete parts of an enterprise.

Important considerations include the fact that most legacy OT was designed at a time when this convergence was not anticipated, so some level of adaptation or ‘bolt-on’ modification is often needed. In the case of specialist manufacturers, much of their OT will be proprietary – designed to meet their own very specific needs and to give them a competitive advantage over their rivals.

While physical security was easily achieved, connecting these machines to the internet increases the perceived risk of data breaches and loss of commercially sensitive information. This may explain the reluctance of some companies to pursue this course of action.

Advantages of OT and IT Convergence

  1. Better data for better decisions

  2. Smart, self-monitoring machines

  3. Retention of specialist knowledge and processes

  4. Significant cost-savings

  5. More streamlined operations

Working Smarter, Not Harder

Once this psychological hurdle has been crossed, the challenge of integration remains. Given the specialized nature of much OT, there is understandably little appetite for discarding it. At the same time, ‘dumb’ legacy machines cannot be simply plugged into the Internet of Things. Retrofittable sensors are a gateway technology that is increasingly enabling the gap between operational technology and IT to be bridged.

Sensors provide the necessary data, but to extract maximum value from these new information feeds, overarching systems are needed to seamlessly link IT and OT. This is where ERP comes in.

ERP implementation is cognizant of the fact that no company is a blank slate and makes allowances for the fact that there will almost always be legacy systems. It also has to account for human and organizational factors, including potential resistance to change and structures based on silos.

Enhanced Agility

By providing the architecture to link IT and OT systems, ERP software gives decision-makers access to much richer data and allows greater insights into every stage of the manufacturing process. This is turn makes businesses more agile, and better able to respond to (or anticipate) changes in market conditions or consumer demand.

ERP implementation also requires companies to choose between on-site, hybrid and cloud solutions. While the security concerns cited above may make on-site solutions appear more attractive, manufacturing companies can derive further benefit from migrating functionality to the cloud. This will generate further savings and enhance the interoperability of their IT and OT functions as their machines and processes become more intelligent – and more competitive.


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