The concept of digitalization has been getting a lot of attention recently. Not to be confused with digitization, digitalization is the transformation of existing processes and operations using new technologies to bring about value. Some of its positive effects are lower costs, increased efficiency, lower operating times, and many more. Digitalization isn’t a recent phenomenon and has been occurring in various industries since the first industrial revolution until now.
There are several examples of its effect around us already. From online shopping to music streaming to communication, it is everywhere, and no industry is spared of it. An example of the digitalization process is the document flow of businesses and it is usually the first to get digitalized (look at digital signatures as an example). Another case and one of the most important and noticeable parts is the use of simulations. Currently, operations are the most advanced form of digitalization possible. It is under operations we have simulations.
ERP and the digitalization of document flow
The digitalization of the document flow is the first kind of digitalization that usually takes place in a business. In any company, there are several processes crucial to the smooth running of a business, from inventory to order management to customer relationship management. These processes usually involve a lot of data handling and storage. The digitalization of these processes has ensured that each business process runs more smoothly.
ERP plays a vital role in the digitalization of these processes. ERP, which is an acronym for Enterprise Resource Planning, is a system that integrates the management of the various business processes. The key feature in an ERP system is a centralized database that supports the functions carried out by the various business units in the company.
Because ERP systems have a central database, certain processes become automated. For example, sales orders recorded into the central database can then be easily accessed by the order management unit. ERP systems also have dashboards where you can view the key performance metrics of a business. Companies like SAP develop ERP software for businesses to use.
Digitalization of data flow
The next step is digitalizing data flow in businesses. Companies handle huge amounts of data in their daily activities and have to manage it all. Before data flow in businesses was digitalized, data was handled manually, which was stressful and time-consuming.
This tier is important for a business. With its help, you can run a deep analysis and gain credible insights to later push the business forward. Those who do not digitalize their data flow are missing out big time. That is because they are leaving their decisions to instincts instead of working with actionable data.
Tools like OSISoft’s PI System, for example, make it possible to implement this aspect of the pipeline. It becomes possible to capture data, query it and visualize to the benefit of everyone in the business. Even for those who do not understand what the numbers imply.
We can say that the digitalization of data flow has significantly improved how data is handled and processed. It has also made the gathering and analysis of it easier and faster.
Digitalization of operations
This is the last type of digitalization and the most advanced at the moment. Just like it happened with document and data flow, business operations are now being digitalized to make business activities like prototyping and training employees easier, cheaper, and risk-free. A known example of the digitalization of operations is the simulation.
Simulations are replications of real-world processes and events without the costs, dangers, and time these would normally imply. It can be used in various areas such as safety engineering, testing, training, education, and much more. One well-known case is the use of simulations in the aviation industry to train pilots.
Another example is of scientists using simulations to test theories and to model natural systems so that they can observe them in a 3D environment. Engineers also often use simulations to create prototypes of products they want to manufacture. This helps them to get an idea of products’ behavior under certain conditions.
Advances in VR/AR technology have significantly contributed to the adoption of simulation in other industries where they were previously not used. VR simulations can now be used to train employees without exposing them to the actual working environment. Industries like manufacturing have begun making use of VR simulations to train their employees.
For us, it is clear that digitalization plays a vital role in transforming businesses and increasing the value they provide. And one way you can go about this is through simulation and the use of simulators wherever applicable in digitalizing your operations. There many positive things that come with integrating the simulations process into your business. While the benefits to each industry vary slightly, the main points are still the same.
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