Data is everywhere and whether you are a CEO or business manager you need to know where it is and what to do with it. The amount of data created daily around the globe continues to increase at exponential rates. It is estimated that 163 zettabytes of data will be created worldwide by 2025. However, reporting by IDC indicates that “only 32% of the data available to enterprises is ever used and the remaining 68% goes unleveraged”leading to businesses missing millions in revenue. 

If used correctly, data is an asset to any organization. “Ninety percent of enterprise analytics and business professionals say that data and analytics are key to their organization’s digital transformation initiatives. However, there are many companies that are reluctant to pull the trigger because they aren’t sure about the advantages of becoming data driven.”  

A data-driven organization captures the power of this ever-growing asset (data) and makes strategic and tactical decisions based on that information not on gut reactions, historical reference, or personal opinions.  

Despite the reluctance of some leaders, there is proof that becoming a data-driven organization is beneficial: 

• “Data-driven organizations can outperform their competitors by 6% in profitability and 5% in productivity. While data-driven organizations are 162% more likely to surpass revenue goals and 58% more likely to beat their revenue goals than non-data-driven counterparts.”

• Through a data-driven cost modelling approach an EV start-up business ensured the profitability of its product at scale. This collaborative, data-led engagement with a focus on the supply chain resulted in an overall reduction of over 25% in Bill of Materials (BOM) costs.

• BARC research surveyed a range of business leaders and found that those “using big data saw an 8 percent increase in profit and a 10 percent reduction in cost.”

• The correct data can also shape an organization’s sustainability success. For example, “One Life Sciences company has a state-of-the art continuous manufacturing facility … Live operations data is fed into a virtual twin, enabling continual optimization through real-time analytics. This initiative has seen an 80% reduction in energy consumption and CO2 emissions, a 91% reduction in the facility’s water footprint, a 94% drop in the use of chemicals and a reduction of 321 tons of waste per year. What’s more, it’s 80 times more productive, making medicines for twice the number of patients in less time.”  

Data holds the power to improve decision making and create new opportunities for growth and innovation throughout the organization. To truly be data driven and leverage the value of enterprise information, organizations need a secure, holistic view of its digital and cloud strategy. This includes how and when to deploy powerful off-the shelf software or when to customize and rapidly apply new use cases built on existing IT infrastructure.  

For years the question businesses faced when applying new digital solutions to existing operations was – should we make or buy? Given the availability of open innovation especially through recent releases from AWS and Microsoft, the same question leads to a new answer: We need to do both - make and buy.  

The Xcelerator program from Siemens is an example of such a hybrid approach. The robust ecosystem of sellers and developers with integrated hardware and software leveraging a strong solution portfolio and interconnectivity of systems, companies can apply specific operations improvements via SaaS products. A custom-built add-on approach allows them to quickly apply the newest innovation or business requirement delivering significant business impact. 

The Digital Core serves as a remarkable illustration of Siemens Xcelerator's vision to enhance collaboration and co-creation. It demonstrates interoperability by seamlessly integrating with both Siemens and third-party systems. Moreover, it is intentionally designed to be flexible, allowing for the creation of tailored solutions according to customer-defined use cases, with the added benefit of expandability and scalability. Lastly, it embraces openness through the use of standardized application programming interfaces (APIs).  

The Digital Core operates not as a super platform dominating everything, but as an integral component running in parallel with existing systems. It seamlessly integrates necessary and minimal data to fuel new business logics and processes, leveraging outputs from various systems. Therefore, adding a customized Digital Core to the digitalization mix enables companies to use qualified data and existing corporate knowledge to transform into a powerful decision-making body. It also allows them to own their digital backbone with the option and availability to scale it over time. 

Having a Digital Core creates a new level of data ownership that is fully customizable and scalable to meet the company’s needs. This positions the organization to answer additional new business needs by repurposing data from SaaS/PaaS products landscape for advanced analytics and decision making. This will enable enterprises to create new IP or build their own data team, further accelerating digital transformation with the benefit of not relying 100% on third party vendors. 

Establishing a Digital Core and becoming a data-driven organization are not overnight processes. It is important for leaders to grow the Digital Core on a case-by-case basis and for critical business reasons. The biggest leap leaders will take is simply to start designing and building the Digital Core framework.  

Here are seven points to consider when establishing the Digital Core:  

1. Align the company’s data strategy with corporate strategy and involve champions at the highest level of the organization. 

2. Secure enterprise-wide buy-in and understanding of the changes involved in becoming data-driven including the impact on the company culture.  

3. Demonstrate the potential value of your data by selecting the most valuable use cases where data can drive strategy for success.  

4. Create an IT/OT blueprint and detailed roadmap of the expected journey. 

5. Design the Digital Core with consideration of the company’s existing digital infrastructure and software products in use. 

6. Scale the Digital Core into new areas of the organization and increase its functionality for success, even consider how the data could be used in multiple ways. 

7. Consider implementing an expert team who own the organization’s data and Digital Core to create accountability, to continuously incubate new innovations, and to improve data-driven decision making.  

Sustainability and Artificial Intelligence (AI) provide the perfect business cases to leverage data across the organization because their importance can be quantified quickly due to recent developments and the speed of innovation.  

The importance of harnessing enterprise data can be seen in the worldwide effort for better, more accurate sustainability reporting. For example, in Europe, organizations must comply with the Corporate Sustainability Reporting Directive, providing details on sustainability-related impacts, opportunities, and risks. The US and the UN have other reporting requirements that are also dependent on good data sources. Without access to the correct sustainability information organizations may struggle to complete the requirements.  

And the next challenge is already on the horizon – optimizing – operations based on data driven decisions. This can only be achieved with qualified, reliable data which includes new business logics and advanced analytics to understand and predict impacts. 

Data-driven organizations measure their environmental impact such as CO2 emissions and waste and water consumption across a large infrastructure. Then with the right data quality they optimize operations to reduce their ecological footprint. Finally, they augment their ability to make faster, more effective decisions and support new ways of working with more diverse teams and communities. 

Meanwhile, AI is gaining more attention around the globe. 

Satya Nadella, CEO of Microsoft, explained that the rate of AI adoption depends upon each specific firm, rather than which industry sector it belongs to. “I think whether it’s in financial services, retail or even healthcare, it’s very exciting to see the broad swathe of industries being reshaped [with AI].”  

AI is important because it helps manage large and complex data sets to extract information usable for the company. AI-powered tools like Microsoft Copilot allow users to interact with complex systems using natural language, making it easier to extract valuable information. AI also benefits labor-intensive activities such as cataloging, cleaning, integrating, and organizing the data that goes into the Digital Core.  

The Digital Core opens opportunities for companies, but it also generates debates within the C-Suite with challenges from finance to security, and IT. Let’s debunk some of these pain points: 

Security Measures in the Digital Core: In the digital landscape, security is a paramount concern for CXOs. The Digital Core is custom-built on hyper-scaling cloud technology and incorporates robust security measures (i.e., advanced encryption protocols, multi-factor authentication, and continuous monitoring for potential threats). The architecture prioritizes data integrity and confidentiality, meeting industry compliance standards. 

Cost-Efficiency Strategies: Cost-effectiveness is a constant challenge for CXOs. The Digital Core optimizes resources through cloud scalability, allowing organizations to pay only for the resources consumed. The absence of a subscription model further empowers clients by providing transparency and predictability in budgeting, eliminating unexpected financial burdens, and allowing for efficient allocation of resources. 

Seamless Integration Capabilities: For CIOs a pain point is the complexity of integrating diverse IT and OT systems. The Digital Core is designed with openness and scalability in mind, facilitating seamless integration with various systems and applications. Through well-defined APIs and standardized data formats, it ensures interoperability, allowing organizations to adapt and expand their technology stack without major disruptions. This addresses the concerns of CIOs regarding system compatibility and ease of integration. 

Scalability for Future Growth: CFOs often worry about the scalability of digital solutions and impact on long-term budgets. The Digital Core, built on hyper-scaling cloud technology, is inherently scalable. It grows with the organization, accommodating increased data volumes and expanding operational complexities without compromising performance.  

Ownership and Control of Data: CXOs are concerned about data ownership and control. The Digital Core addresses this by making the organization the sole proprietor of its data. Unlike subscription-based models where intelligence might be hosted externally, a custom-built core ensures know-how stays with the corporation as is not embedded in an external software which might not be available as necessary and is not part of the digital backbone of its daily operation.   

The technical architecture of the Digital Core not only empowers organizations to harness the benefits of digital transformation but also directly addresses the key concerns of CIOs, CXOs and CFOs. By providing a secure, cost-effective, and seamlessly integrable solution, the Digital Core becomes a strategic asset in driving the success of modern enterprises. 

Once a business reason / use case is defined to create new insights (e.g. sustainability challenges) or innovation infusion (AI), a Digital Core needs to be created which involves key components including:   

• Data Structuring: This component not only manages data ingestion and acquisition but ensures efficient storage, retrieval, and transformation. It plays a pivotal role in structuring data to align with organizational needs and standards, enhancing its overall utility. 

• Front-end single pane of glass: Serving as the main user interface for operational data, the web application is designed with a user-centric approach, providing an intuitive experience. It fosters collaboration by centralizing data analysis, featuring dashboards for multiple KPIs, other metrics, and an alarms and notifications system. 

• Analytics: The analytics application offers flexibility with customizable reports, providing insights into various parameters. Its adaptability and scalability make it a robust tool for evolving data needs and technologies. Additionally, it facilitates diagnostics, high-level management, and control capabilities across connected subsystems. 

• Integration Layer: Operating as more than just a storage area, this component serves as a dynamic communication backbone, facilitating seamless data flow within and between data centers. Its versatility in supporting various data formats and protocols enhances its role in integrating data from defined subsystems. 

• Process Automation and Event Processing: Working alongside the Integration Layer, this component excels in real-time capabilities, managing automated processes and pipelines for data processing. It ensures data quality, consistency, and reliability, contributing to the overall efficiency of the Digital Core. 

• Work Order Management: Derived from insights provided by the web application and reports, the work order management component streamlines operations by initiating actions. It plays a crucial role in fostering a proactive approach, addressing issues promptly, and optimizing workflows based on analytics and data-driven decision-making. 

Each of these components works together allowing the Digital Core to enhance strategy implementation through data driven insights generated from combining external market data with the company’s own performance, lower operations and maintenance costs, reduce failure rates, and achieve the highest return on investment. Overall situational awareness is provided for connected infrastructure, serving as a single point of reference for all involved in joint decision making. 

For example, a Port wants to create situational awareness of its operating entities, with the goal of delivering services to all stakeholders to improve the operational performance and efficiency. This will at the same time increase supply chain transparency or full emissions footprint through the implementation of the different views on an integrated control center. By creating a Digital Core and a Common Operational Picture (COP), the Port Operator would meet the need for awareness across its operation of a single port or multiple locations it is managing across the globe. The COP will replicate information from related sub-systems, and be shared between the command, control and coordinating groups serving as a single point of reference for all involved parties for joint decision making. The Digital Core creates additional insights by further processing the data from the subsystems to create prediction models for operations. 

Leaders may arrive at this point in this post and feel overwhelmed by the importance of the Digital Core and how complex the transformation is for their organizations. There are still so many business leaders who do not see how data and powerful innovations will radically change their businesses. Successful companies will run a hybrid strategy build (Digital Core) and buy (SaaS), leveraging great software products for specific operations. Optimization and an owned Digital Core create enterprise intelligence and control of their digital transformation. To achieve this, leaders will need a guide and engaging the right partner with extensive IT/OT and digital transformation experience is critical for success.  

And remember – the goal is not to connect everything with everything. The Digital Core runs on minimal data with meaningful use cases embedded and can be created based on individual issues or use cases that a specific company faces. It underpins total enterprise reinvention by providing agility, flexibility, easy interoperability, and resilience.