Executive Management of Operational Technologies
Operational Technology (OT) is that component of an industrial business that supports control systems, instrumentation, PLC and DCS systems, SCADA systems and plant information systems. This discussion takes a CEO’s perspective and looks at key considerations in management of this key business function, making the case for bolstering OT representation and capability to help assure business success.
You are the CEO of an industrial business. Your vertical market is resources, utilities, manufacturing or any business that utilises industrial control systems. Keeping control of technologically based elements in today’s business culture is challenging to say the least. What factors should you be considering to “connect” with OT? How should OT be managed?
The Information Technology sector has made inroads over the past 30 years to the point where most large organisations have identified the need for a Chief Information Officer (CIO). Through the CIO, the CEO and executive management can access the information technological component of the business directly, guiding development of strategies for maintaining a competitive business. The IT staff in the business have access and representation through close organisational ties and communication via the CIO to be agile and responsive in challenging scenarios and environments to keep the business under control and powering ahead.
Unfortunately, the same cannot be said for OT. This component in an industrial operation usually has little or no representation at the executive level in the organisation. The most senior officer may be more than two levels removed from executive operation. This means that the senior executive has a very limited view and appreciation of the key technologies that sustain the operation of the business. This is difficult to reconcile.
Do you believe that you have this covered through your CIO? This may or may not be the case. Today’s CIO is usually fully engaged with their IT domain, an already complex array of technologies and disciplines, associated with business computing services, business software applications, desktop computing and complex data communications networks. This is already challenging enough for one executive in larger organisations. If you add OT to their portfolio, then you will definitely be overloading them.
Perhaps you can get away with renaming your CIO to “Chief Technology Officer” (CTO) in smaller operations. Before you jump in and do this, you need to understand what this truly means in terms of one person’s ability to manage, support, change and communicate the state of all technological aspects of the business. It is a considerable challenge that will overload most individuals to the point of ineffectiveness.
The OT department is a complex multidiscipline part of the industrial business. Your OT team needs control, electrical, information, instrumentation, data communications, database technology disciplines to be able to effectively enact its services. The OT department also has many interfaces with many other parts of the industrial business. They will be required to work closely with operations management and operators, plant maintenance, project engineering teams of all disciplines, mechanical and process engineering, IT software, data communications and administrative operations to get their job done. Most of these interfaces will require the OT department to retain a working knowledge of the departments with which they are engaged to support and augment functions and facilities for the business.
The case for OT executive representation is as compelling as it is for IT. IT have already made their move into the executive. OT now must stand up and be counted and in order to do so, they need to be empowered. This means a tweak to ensure that the top level of the organisation has representation for OT. You will possibly want to define a position of Chief Technology Officer (CTO) to handle OT executive business. Appoint your new CTO alongside your CIO and reap the benefits of success in these complex arenas.
Once you understand the fundamental nature of OT, you should see that it is a critical component of your core business. This alone should make the case for outsourcing and off-shoring OT capability a complete farce. Yet today we see the trend toward outsourcing and even off-shoring this part of the business. OT is fundamentally intertwined with the business, intricately attached to day-to-day operations, making separation of this capability very precarious. You may be tempted by an argument that “this or that technology” is not your “core business”. But be careful with OT. The “O” means “Operational” for a very good reason and if you are not operating your business, what are you doing?
Finally, businesses, and even whole economies across the world are crying out for innovation. There is little doubt that we need to improve on many fronts in order to enable and unleash innovation within our businesses. IT and OT provide some of the easiest ways to innovate or assist innovation. These technologies lend themselves to improvement and innovation, and moreover can be the catalyst for other areas of innovation by providing monitoring, data and analytical tools. IT OT is synonymous with innovation in industrial businesses.
Okay, so what should you do now?
- Look at the benefits of appointing a CTO to help understand and manage your OT.
- Look at keeping OT in-house to support your operations.
- Take advantage of IT OT enabled innovation.
Make these moves now. Your business success depends on it.
Jeff Lloyd, PRECODA Pty Ltd, 1 April 2016
Jeff Lloyd is a manager, leader and consultant with over 30 years’ experience in IT OT and engineering business. He is owner and managing director of Precoda Pty Ltd, a consultancy service providing IT OT and technology management services to a wide variety of businesses.
Contact Jeff on his mobile phone directly +61 (0)427 734 995 or by email on jefflloyd@precoda.com.au.