Industry is undergoing another revolution. We’ve spent too much time talking about smart factories and not enough about autonomous operations. The first Industrial Revolution focused on what machines could do. The Operational Revolution is focused on what business can become when machines manage themselves.
A Brief History of Industry
To fully understand the lifecycle of industry requires an understanding of the history of the last 250 years, and how each cycle of the Industrial Revolution correlates to what followed.
Before the first industrial revolution, before the advent of the steam engine, operations were extremely manual and laborious. The steam engine, sparked from the idea of the flywheel, led to the first trains, mechanical grinders, and presses. Mechanical energy hardware meant that very hard tasks were performed with less labor and physical exertion.
The second industrial revolution was the advent of the assembly line by Henry Ford. This meant efficiency with everyone having a purpose as the master of a specific task, working together sequentially. This led to an increase in throughput.
In the third industrial revolution, technology progressed to the point where robotics replaced some human labor. Now, factories could use a few people to maintain an entire workforce of robots.
The fourth industrial revolution remained focused on hardware and building products, but added smart sensors and amazing amounts of data that get sent back to a control tower. At the same time, the focus remained on a piece of hardware and the physical laborious process of building a physical good as opposed to thinking about all of the adjacent work in the industrials business.
The industrial progression has moved from maybe more than a thousand people working in a factory to a mere 50 people, and there’s only so much you can squeeze before seeing diminishing returns.
Industry 5.0 is an Inflection Point
There’s just not much more to be gained from an efficiency throughput standpoint by implementing technology in the physical manufacturing processes. The focus now is on the adjacent pieces of the business, such as manual processes of stakeholders literally handing folders filled with paper from one person to another.
The orange of previous industrial revolutions has been fully squeezed. Now we need to start looking at the apples. To start looking at the grapes. This means providing necessary data foundations to everyone in the supply chain, in procurement, in engineering, in the safety department, and in the quality department. We have the sensors that alert us to issues, but there’s still a mountain of paperwork and manual processes to address.
AI and the Operational Revolution
Another way to think of Industry 5.0 is that it’s really the Operational Revolution. For years, the revolution has already been happening in IT with digital transformation and modern-day case management. We need to bring that transformation to the operations side, and AI is here to facilitate that evolution.
The status quo in operations is no longer sustainable, and the idea that we can simply take AI and plop it into processes isn’t going to work in the long term. The reason is that we need to provide AI with guidance, expertise, and a solid data foundation to maximize the value of this new technology.
Think of AI as a five-year-old child not prepared to make decisions, but able to be nurtured, educated, and grown. No one goes from first grade to college or goes to bed one night and wakes up the next morning an enlightened expert.
In growing AI’s capabilities, the middle piece in operations is implementing processes in autonomous or semi-autonomous tools like ServiceNow that bridge optimization gaps and utilize data more quickly and efficiently.
Taking a folder/PowerPoint/Excel document and passing it through 15 different people to make changes is laborious from an intellectual labor perspective. The Operational Revolution’s leveraging of AI brings data into a usable system that creates and trains processes, digitizes those processes, and, as a result, streamlines operations. Agentic AI will bring additional gains.
One big picture aspect of the Operational Revolution is changing our thinking from linearity to parallel operations. Instead of processes working sequentially, where tasks are handed off from person to person before reaching final approval, the shift is to processes working in parallel paths, where information and intellectual properties flow into the hands of the people who can do the work to remediate whatever issue or task is at hand.
Building a ‘Business Force of Thinkers’
The Operational Revolution isn’t centered on all the great new technology available today. Instead, it’s about creating a business force of thinkers. This means empowering people to solve problems on their own and giving them the tools to do that.
An example is an organization’s procurement team member. This subject matter expert ensures vendors meet ISO guidelines, compliance, regulation and other supply chain specific details. No one knows that job better than this procurement expert because they do it every day and live and breathe meeting organizational and regulatory standards.
Enabling this expert with technology that allows them to design and build processes that automate mundane or highly laborious tasks leads to efficiency gains.
A platform like ServiceNow allows the procurement expert to build a microprocess. One might generate a 1% efficiency gain. But how about 10 processes over the course of a year? Or 50 processes over the course of two years?
Now those microprocesses are driving real operational efficiency in procurement. Apply that across the organization with subject matter experts in every business unit, and the result becomes truly impressive.
These gains don’t require our procurement expert to become a coder or software engineer. They just need to understand how to use this new technology, just like they previously learned Excel and PowerPoint, email, the internet, and smartphones.
A platform like ServiceNow with its app engine, build agent, and low code/no code tools helps a business force of thinkers drive operational efficiency in their areas of organizational expertise.
The Operational Revolution is already in full swing, and ServiceNow is aggressively building its platform as the central nervous system for this next stage in industry. Specifically, it is pursuing acquisitions to quickly ramp up the platform’s capabilities beyond just adding features.
ServiceNow has the engineering capability and knowledge to build tools like a best-in-class discovery network scanning cybersecurity risk tool, but understands that it might take several years before it’s ready for release. Instead, understanding what the market is looking for right now, its strategy is to acquire best-in-class tools and integrate those into the platform in six months.
In a nutshell, ServiceNow is using its capital to speed up providing customers exactly what they are asking for and need right now. People aren’t looking for seven different tools in their tech stack. Instead, they want to focus on having one tool as a standardized platform for people to learn and grow on, build proper enablement, and drive adoption and engagement within the organization.
When I’m looking for where to place my tech chips, I look for a company like ServiceNow that is investing in speed to get the latest features and capabilities to users as quickly as possible. The reason is, in the Operational Revolution, you need that technology backbone to take your data, wrap your people and processes around that data, and build governance to reach maximum performance.
When we look at organizations and technology platforms, we see that ServiceNow is investing exactly where they need to invest to be able to get where we want to be in the next five years.
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Are you ready to get hands-on with the Operational Revolution? Download your copy of Dean Stavrou’s ebook, “The OT Renaissance.”
