How much time in a day do you spend on a smart device? As we become increasingly reliant on technology in our personal and professional lives, the abundance of information online and across our devices can overwhelm even the most technically savvy individuals. Today’s most advanced smart phones can store 128 gigabytes (GB) of internal memory.
While this is an impressive amount for such small devices, the world generates 2.5 exabytes, or 2.5 billion GB, of data every day, resulting in a new found challenge for businesses. The challenge becomes - how do we bypass the overabundance of data available to make practical use of the most valuable information? The answer is smart data, a universally applied concept across industries.
For example, in manufacturing the era of the ‘digital factory’ requires seamless integration of data along the industrial value chain. This has increased in importance to become a key criterion for manufacturing company competitiveness.
Equipment manufacturing experts who embrace digital manufacturing tools are further able to streamline data to make informed decisions that improve processes, foster leaner manufacturing structures and ultimately accelerate product time to market. With an increased need for updated technology to manage data, there comes greater reliance on flexible financing structures to enable organizations to capitalize on this equipment.
Siemens Financial Services (SFS) surveyed chief financial officers (CFO) within the global manufacturing industry on the opportunities and challenges inherent in this new industrial era. According to Deloitte this era is coined, “Industry 4.0 which refers to a developmental stage in the entire manufacturing value chain process.
Widely used across Europe, particularly Germany’s manufacturing sector, this industrial phenomenon also is referenced as the ‘internet of things’ or ‘industrial internet’.”
Results of the research provided recurring themes, such as: an expressed need for sustainable and affordable capital to face the new challenges brought on by Industry 4.0, asset finance referenced as a strategic tool leveraged to fund digitalized technology, and a diverse range of financing techniques is viewed as “important,” “very important” or “critical” for manufacturing today.
The survey revealed that the financial solution, asset finance, offers a number of benefits including speed, ease of use, flexibility and dependable rates. As one CFO respondent states, “The biggest benefit of asset finance is the quality and the speed of the acquisition.”
Along with different types of financing, there are also various models to implement that financing. For example, as a solution to the increasingly rapid pace of technological change, Siemens Financial Services recommends the Financing for Future Needs model. This model works best when there are technology upgrades required for equipment every few years.
Financial organizations provide customers the opportunity to financially prepare for these upgrades by offering flexible arrangements where customers can elect if a significant improvement is required. These models allow customers to prepare for both technological and financial upgrades. For manufacturing CFOs, this can ensure that their company’s data analytics software is always up-to-date. Financial providers who offer customized packages that flex to fit manufacturers’ circumstances and cash flow needs will be the financier of choice for today’s customer.
Technological advancements and harnessing ‘smart data’ are fundamentally shifting industry today. Financing may be just the answer for customers to turn data into smart data to meet the challenges of Industry 4.0.
(About the author: Gary Amos is head of Americas, commercical finance, at Siemens Financial Services)
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