Inaugural State of Connected Operations Report Shows Tipping Point in the Digital Transformation of Physical Operations
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95% of surveyed operations leaders agreed digitizing operations improves their ability to weather disruptions
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91% stated investments in digital technology increased net profit
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95% that have implemented AI and automation report increased employee retention
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85% said increasing the sustainability of their operations is a high or critical priority
Samsara Inc. , the pioneer of the Connected Operations Cloud, announced its inaugural State of Connected Operations Report. Perspectives from 1,500+ operations leaders revealed how digitization drives business resilience, why the new industrial workforce is demanding intelligent tools, and how investments in sustainability are paying off. The research found that Connected Operations Leaders—those who reported the highest level of digital maturity–are better equipped to thrive in 2022 and beyond.
“Operations leaders are managing through a turbulent time marked by record inflation, rising interest rates, and immense supply chain pressure. While they have a long history of surviving challenging economic cycles, what’s different this time is the advantage of digitization,” said Sanjit Biswas, co-founder and CEO of Samsara. “Our new research puts a stake in the ground on what it takes to be resilient. Connected Operations Leaders are ahead of the pack and represent what’s possible with the right action and technology.”
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“Operations leaders are managing through a turbulent time marked by record inflation, rising interest rates, and immense supply chain pressure. While they have a long history of surviving challenging economic cycles, what’s different this time is the advantage of digitization”
Business Resilience and Profitability Hinge on Digital Transformation
The supply chain model that operators trusted broke during the COVID-19 pandemic. The global economy’s most important industries have since faced historic levels of disruption. Leaders seek restoration but also a fundamental change in their operations that will provide resilience in the decades to come. Digitization is enabling new agility as leaders can assess and respond based on real-time data. Samsara found that 95% of respondents agreed that digitizing their operations improves their ability to weather disruptions.
Connected Operations Leaders are reaping the financial benefits of digital transformation, as 99% have seen increased net profit from such investments. Compared to respondents in the beginning stage of digitization, Connected Operations Leaders were nearly 2x more likely to exceed revenue goals. Considering 86% of respondents in the beginning stage of digitization reported investments paying off, it’s clear digital technologies have the power to deliver ROI quickly and can help organizations weather economic challenges.
Legacy systems are holding organizations back and siloed data is compounding problems; 89% of respondents agreed that disjointed technology and data negatively impact their bottom line. Modernizing the technology stack is top of mind to address this challenge, as 84% stated updating legacy tools is a high or critical priority for their organization this year. Organizations that digitize smarter and faster can reap the benefits sooner and better equip the business to rise above future challenges.
The Industrial Workforce Demands Modern Tools and Flexibility
Operations leaders are not immune to the Great Resignation and extremely tight labor markets. Zeroing in on one country and industry, consider if every unemployed person with experience in the durable goods manufacturing industry in the United States was employed, the industry would only fill 65% of the vacant jobs.
The industrial workforce has new demands–modern tools that increase safety, improve workflows, and stack up to the technologies they use in their personal lives. Samsara found the top influential factors for recruiting and retaining employees were improving workplace safety (56%) and implementing easy-to-use technology (54%).
The era of remote work has left a lasting imprint on physical operations. Almost all respondents (91%) currently offer technology that enables employees to perform some or all of their work remotely. Further, implementing flexible work options this year is a high or critical priority for 81%. For example, organizations can now use real-time diagnostics to complete asset inspections remotely, which increases safety and could save an employee a multi-hour round trip to a remote site.
Connected Operations Leaders quickly adapted to this shift and were 6.5x more likely to offer remote work technologies to all of their employees compared to respondents in the beginning stage of digitization. Organizations with antiquated ways of working and a lack of response to workforce demands will find it difficult to retain employees and attract the digital natives that are quickly making up the labor market.
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AI and Automation Bolster Employee Retention and Satisfaction
Applications of artificial intelligence (AI) and automation—such as AI cameras and automated workflows—have become vital for physical operations. For example, AI dash cameras are increasing safety on the road and exonerating drivers against false claims, which can reduce costs by hundreds of thousands of dollars for an organization.
Samsara found that 90% of respondents have implemented AI and automation technologies or plan to by 2023. These technologies can address a need for increased safety and enable employees to spend less time on repetitive tasks. The vast majority (90%) said they expect to increase employee retention as a result of AI and automation adoption. Further, 95% that have already implemented these technologies report it has led to increased employee retention.
Other benefits respondents indicated include greater business agility (45%), greater employee safety (44%), greater upskilling opportunities for employees (43%), and higher employee satisfaction (43%). Compared to respondents in the beginning stage of digitization, Connected Operations Leaders were more likely (+31%) to report higher employee satisfaction as a benefit. AI and automation are becoming integral to improving employee experience.
Fuel Costs Shock EV Adoption Urgency
Soaring fuel prices have shaken global industrial operations. The sudden increase brought supply chain costs to new levels and has caused a downstream effect on consumer prices. This has led operations leaders to re-evaluate their investments in vehicle types. In response to rising fuel prices, nearly half (49%) of respondents have accelerated their transition to electric vehicles (EVs).
Technology is playing an important role in transitioning fleets to EVs while increasing fuel economy today. For example, by tracking electrification criteria like average and max miles driven, fuel costs, and more, organizations can identify which vehicles are most qualified for replacement with EVs. In addition, telematics solutions with real-time GPS tracking and remote vehicle diagnostics can help plan the most efficient routes.
Both of these strategies can greatly impact an organization’s larger sustainability pursuits. Sustainability has become a top priority due to societal demands but predominantly because it’s good for business. For those that have a sustainability program in place, the top-reported benefits are increased access to business opportunities (57%) and higher employee satisfaction (57%). Further, 42% of respondents reported revenue gains as a result of their sustainability program.
Increasing the sustainability of their operations is a high or critical priority for 85%, and 65% will increase their investment this year. This focus will only sharpen as pressure mounts from regulators, investors, customers, and employees alike.
The Time is Now for the Rise of Connected Operations
Of the 1,500+ operations leaders Samsara surveyed, only 7% reported the highest level of digital maturity—indicating that the digital transformation of physical operations is in its early innings.
Biswas added, “The digital transformation of physical operations is a multi-decade shift that will save lives, reduce carbon emissions, and keep the flow of goods, services, and people moving. Connected operations can guide greater profitability, higher employee satisfaction and retention, increased access to business opportunities, and a more sustainable future.”
