Q&A: SIEMENS SA - JSE MAGAZINE

Q&A: SIEMENS SA

Siemens SA CEO Sabine Dall’Omo on the impact of automation, smart cities and how digitalisation can ensure growth

Q&A: SIEMENS SA

Q: What are the benefits of SA adopting and embracing a ‘digital disruption’ of its economy?
A: Intelligent processing of data – and the combination of data and engineering technology – brings flexibility and resilience to production, and enables more predictable and efficient maintenance. Every five years, digital information grows tenfold, and rapid access to business and operational data allows deeper insight and quicker decision-making, resulting in sustainable increases in productivity, efficiency and quality. Embracing digitalisation will be a critical element in achieving SA’s ambitious growth and job-creation targets.

Q: Which sectors of the SA economy, in your opinion, are currently best suited to the new digital world?
A: From a Siemens perspective, we see non-traditional infrastructure – such as the energy, industrial and transportation sectors – as ideal for rapid growth through digital optimisation. We recently published a study titled the African Digitalisation Maturity Report, which benchmarked the current state of digitalisation in four countries, namely SA, Nigeria, Kenya and Ethiopia, as well as key vertical industries – transport, manufacturing and energy.

Manufacturing is the most mature and possibly obvious in its transformation of digital technologies. However, the greatest opportunity lies in the energy and transport sectors. Digitalisation can assist in enabling decentralised power generation to work by using alternate energy sources combined with intelligent grid management.

The rail and road sectors need to move beyond electrification and automation to true digitalisation, and focus on extending and integrating islands of excellence to solve the real (mass) mobility needs of citizens.

Q: Much is made of the impact of automation and digitalisation on jobs. What is your take on this?
A: Skills are a vital component of digitalisation. We believe that digitalisation can bridge the blue- and white-collar worker to create what is termed the ‘grey-collar’ worker.

Job losses are the biggest fear of digitalisation, and yet the most digitally transformed countries – particularly Germany – enjoy some of the lowest unemployment levels. The caveat is that there is a new skill of worker that is needed in a digital economy. This category of workforce will require both technological and technical ability to execute their jobs.

Our flagship ‘Industry 4.0’ factory in Amberg, Germany, used to employ 1 000 people in 1990 – and in 2017 we still do. The skills needed to operate the facility, however, have changed. This implies that humans and machines will not be competing for jobs but will instead work together, creating the need for a new type of talent.

Today, we are working closely with industry and government to address the investment and development of these talents, which complements all our concurrent education initiatives.

Q: Where will the main opportunities lie for a large company willing to embrace automation in its operations?
A: In concrete terms, the benefits of digitalisation translate into faster time-to-market, greater flexibility and enhanced availability of products and systems for customers. Frequently, however, companies do not know where to start their digital transformation journey.

It’s difficult to define which tangible activities should be used to begin implementation and pilots. The reality is that the opportunity is unique for each company and there’s no one-size-fits-all approach. We believe the digital transformation journey requires a combination of industry domain know-how and a portfolio of digital offerings across the value chain to help companies adapt digitally, enhance legacy systems and identify where digital technologies can best boost performance, productivity and competitiveness.

It’s about creating the capability to establish a smart value chain and transform data into valuable business outcomes, while minimising risk.

Q: How can smart technology lead the way for new methods of manufacturing and logistics?
A: We are helping customers to shape changes in the way products are designed and engineered; in the way production can respond to the demand for mass customisation; and in the way operational availability and uptime is ensured. Siemens is at the forefront of digital (or networked factories), and we’re in the process of building factories that can self-organise.

In the future, machines will organise themselves to a great extent, delivery chains will automatically assemble themselves, and orders will transform directly into production information and flow into the process. Yet people will remain essential in this environment.

Creative leaders and thinkers will use their intelligence to conceive each of the processes and procedures in advance, and write software to convey that information to machines.

We may not know what the smart technology of the future will look like or how it will impact manufacturing. What is certain, however, is that as IT, telecoms and manufacturing merge, the means of production will become increasingly more intelligent.

Q: Experts talk about a country being ‘digitally mature’. How far along that path is SA?
A: In some instances, businesses are not yet meaningfully investing in innovation but that’s not to say the awareness levels among executives is not high. The first step to growing maturity involves changing people’s mindsets, and it is partly to this end that we published our digitalisation maturity report.

Once fixed mindsets change, digitalisation can occur quite rapidly – as has been evidenced in sectors such as ICT. One need only look at the impact of mobile phone technology and smart phones in Africa to see how innovation can leapfrog older technologies at an almost breathless pace.

The raw data needed for digitalisation is already available – the challenge is in using it more appropriately for business innovation.

SA can be considered digitally mature based on the indicators of economic maturity, the environment and infrastructure, as well as skills and digital literacy. Global benchmarking has been done against each indicator. Out of 100, SA fared the best in terms of infrastructure, at 82 points.

Infrastructure is a key pillar of digital maturity and depends significantly on government policies and initiatives. The country received 60 points for environment, 53 for skills and digital literacy and 43 in terms of economic maturity.

Based on the data, Siemens recognises a real opportunity for improving SA’s digital maturity rankings. And with infrastructure ranking so highly, much of the battle has already been won.

Q: What are the main challenges SA will face in becoming truly digitised?
A: In SA, as in the rest of sub-Saharan Africa, the key challenges lie in applying digitalisation in the context of various macroeconomic factors, such as regulation and infrastructure. The extent to which a business, legal and regulatory environment supports and protects the development of digitalisation in key industries is important.

The challenges include the overall ease of doing business, the existence and enforcement of ICT-related laws and regulations, the degree of protection of intellectual property and the extent of ICT-related innovation and start-up activities. There are also challenges in the quality of infrastructure, which includes access to international bandwidth, mobile-network coverage, internet and mobile phone penetration and the costs of broadband and mobile-phone access.

Q: Driverless cars have become a well-recognised example of the impact the digital revolution will have on the man in the street. What will be another?
A: Transport is one sector where the impact of digitalisation can be most keenly felt – it can unlock the development of moving people and goods from efficiency, customer experience and safety perspectives. Never before has technology complemented transport so eloquently.

Data – and the ability to interpret it – is as much a part of the transport ecosystem as roads and rails.

Digitalisation has the potential to turn predictive maintenance into real-time monitoring and allow transport operators to deliver services efficiently and safely. In SA for example, Siemens was commissioned to build a centrally controlled state-of-the-art operations centre, and to install a new signalling system over the entire PRASA network in Gauteng. Scheduled for completion in 2019, it will control railway traffic and enable increased numbers of passengers to be safely transported by rail.

Q: What role is Siemens playing in creating the smart city of the future?
A: Technological advances are changing the way people live their lives – giving them a voice and opportunity to participate in the delivery of public services. No longer are citizens merely consumers of energy, transport and other city services – they are becoming part of the production process.

A smart city encompasses a more interactive and responsive city administration, safer public spaces and meeting the needs of a changing population. However, a key element is the use of ICT to ensure better resource application and fewer emissions. It means smarter urban transport, more efficient ways to light and heat buildings, and the efficacious delivery and consumption of energy.

For example, Siemens’ Intelligent Traffic Systems can use dynamically changing data on road conditions to affect traffic signals in ways that reduce congestion and even allow faster journey times for buses and emergency vehicles. Sharing data with drivers allows individuals to choose optimal routes to their destinations (thereby reducing time on the road as well as car emissions) and even help drivers find parking spots, an activity that can account for up to 40% of inner-city traffic.

In SA, one of the most obvious needs for a smart city is in the energy sector. Smart meters allow for optimised distribution of electricity (be it to small or large power users), real-time monitoring and control of the system.

By Patrick Farrell
Image: Wilnicque Rall
Repro artist: Karin Livni