Rethinking “phygital” operations and oversight
Most organizations have relied on digital tech stacks within data ecosystems to manage operations and advance business growth. The physical tech stack has historically been of less importance and focus, with a few elements such as network access points and the physical data center infrastructure coming into play for budget considerations, network scalability, and expanding operational capacity.
This dynamic has changed. As smart devices and interconnected physical assets (IoT) have proliferated, businesses must recognize that a physical tech stack is increasingly driving profitability and efficiency. Even more so, as organizations rely on physical collateral, the software side of it—such as artificial intelligence, machine learning, and analytics—must be refined to manage the smart devices in an optimal way. This new “phygital” ecosystem includes everything from manufacturing plants to patient healthcare monitors, inspection drones to robotic food processors, and smart sensors to manufacturing machinery and beyond.
As noted by Deloitte research insight, predictions indicate that by 2025, 30% of new industrial control systems will include analytics and AI-edge inference capabilities. This is a sharp rise from the less than 5% with that capacity in 2021.1 And physical devices will be generating more data than ever, which organizations must be able to filter and process for value-driver purposes. For instance, also according to Deloitte, smart cars are projected to generate 10 exabytes of data per month by 2025.1
Organizations respond to “phygital” trends with integrated oversight and governance
IT managers are being called on more to manage and secure these smart assets, and CIOs must determine how best to invest in growth initiatives on both digital and physical levels. Not only that, but organizations must shift their hiring considerations to make sure skill sets are being filled to handle both the data and the assets in which that data resides and operates. Device governance and oversight are moving beyond just handling the data stored or running on the devices. The physical tech itself must be integrated with company-wide workflows—all of which require new standards of management, resource allocation, and team training.
The new requirements for resiliency
The more a phygital tech stack becomes part of an organization’s daily workflow, the more important it is for the company to keep those physical devices online as much as possible. These devices are operating more business-critical applications and services and generating real-time data that informs essential decision-making. As a result, if these physical devices ever go offline, they can directly impact workplace productivity and introduce enormous risks to business viability. That’s not even mentioning the potentially life-threatening consequences of downtime in the realm of healthcare or safety concerns with more industrial sectors.
Therefore, resiliency becomes one of the highest priorities for organizations that want a reputation for seamless customer service, operational uptime, and uncompromised security.
Automating and securing a phygital ecosystem
As organizations shift resources to both deploy and manage phygital assets, device automation and security strategies will be necessary to optimize results and ensure nothing is compromised by malware or other bad actors.
On the automation front, reducing redundant device management tasks is an essential step involving elements such as over-the-air software updates, remote diagnostics, and scalable deployments. Apps must also be implemented to capture and process the data these devices generate, boosting storage requirements. This may push many organizations to look for solutions in distributed storage and edge computing to handle the extra resource demands.
And in our age of enormous concern about security risks and vulnerabilities, any organization that doesn’t extend cybersecurity solutions to the physical tech stack keeps itself open to the possibility of lost or corrupted data. Unfortunately, a joint analysis by Deloitte and the World Economic Forum surveyed over a million enterprise and healthcare IoT devices and discovered that 98% of all data traffic was unencrypted, with 57% of all devices being vulnerable to medium- and high-level attacks.2
- 1.Deloitte Insights, “The Tech Stack Goes Physical,” 2022
- Deloitte Insights, “Tech Trends 2022,” 2022
