Hitachi Digital Services brings multiple entry points to help clients with IT/OT convergence

Manufacturers grapple with the complex challenge of combining different operational technology (OT) with advanced information technology (IT) systems. The landscape is fragmented, with machinery, hardware, and software producing isolated datasets, each with its standards and protocols. This integration complexity hampers real-time visibility and raises significant security concerns. Hitachi Digital Services (HDS) addresses this landscape pragmatically with the OneEcosystem approach, leveraging generative AI (GenAI) to achieve seamless IT/OT integration.

Businesses are increasingly investing in upgrading IT and OT technologies to maintain competitiveness, improve operational efficiency, and raise safety standards. Modernization involves updating enterprise resource planning (ERP) and infrastructure and implementing advanced data platforms and software services. A recent HFS Pulse survey (see Exhibit 1) indicates that large companies actively explored AI, GenAI, advanced analytics, and cloud technologies. These investments are intended to automate processes, hasten decision-making, and bring about significant business transformation.

In late June 2024, HDS unveiled its growth strategy at an analyst and advisor day in Hyderabad, India. A central part of this strategy involves integrating the Lumada IT/OT platform with ERP, IoT platforms, and GenAI, showcasing the company’s focus on system integration and digital transformation.

Exhibit 1: Key enabling technologies being explored in 2024 in select industries

Sample: 256 large enterprises from manufacturing, energy, and utilities, BFSI, healthcare, telecom
Source: HFS Pulse Data, April 2024

Blending GenAI in digital manufacturing and system integration

Manufacturers depend on automation to address labor challenges, increase productivity, predict maintenance, and achieve autonomy. They heavily rely on third-party service providers to integrate their IT infrastructure with other data platforms. With the advent of GenAI, system integrators rush to take advantage of it in digital manufacturing and add new sources of value to their customers. Thus, the digital manufacturing business is estimated to grow at a compound annual growth rate (CAGR) of 15% over 2024–2027.

Given its legacy in digital manufacturing and realizing the potential of GenAI in the system integration process, Hitachi strategically carved out HDS to focus on the system integration business as a distinct entity from Hitachi Vantara. Recognizing the importance of GenAI and reporting 19% growth in the system integration business segment in the last fiscal year, HDS invested in the AI business, established centers of excellence (CoEs), strengthened AI leadership, leveraged the group’s NVIDIA partnership, and created and implemented use cases across its focused industries.

By integrating digital manufacturing and AI capabilities into customers’ automation initiatives, HDS aims to drive significant operational improvements. For instance, HDS utilized GenAI to automate the creation of fault trees from digitized manuals and integrated voice recognition technology to handle technicians’ inquiries, significantly increasing productivity for an automated manufacturing provider.

The critical role of a unified ecosystem in maximizing Industry 4.0 solutions and outcomes

Enterprise clients evaluate the providers on various parameters, including capabilities, outcomes, productivity levels, and strategic partnerships. Partnerships play a significant role in enabling the data collection, connection, and co-creation of valuable insights in an enterprise automation process. HFS calls this approach a OneEcosystem, where like-minded partners join to share common objectives and drive new enterprise value sources, enhancing employees, customers, and partners’ experience.

Leveraging the legacy of IoT technologies, digital engineering frameworks, hybrid cloud infrastructure solutions, and smart factory experience, HDS is in a pivotal position to add value to its customers with a “One Hitachi” approach, pre-defined frameworks, industry and technology-specific partnerships and use cases in their focused industries.

With the unified ecosystem, HDS has invested in integrating IoT-enabled safety devices, AI-powered predictive analytics, and real-time monitoring systems to increase quality, efficiency, and risk reduction worldwide. For instance, a global tire manufacturer reduced scrap and rework by 17% using HDS’ AI-powered quality prediction model, achieving more than 90% accuracy in forecasting critical quality parameters. Another example is providing a safety compliance solution for a North American rail manufacturer, integrating AI-enabled video analytics and geofencing rules to enhance safety.

Mid-size deals that go across the Hitachi umbrella are the sweet spot

Enterprises that are in an IT/OT integration journey can leverage HDS as their system integration partner after dissecting the following:

• Several companies operate within the Hitachi umbrella, each offering distinct services. Hitachi Vantara specializes in data infrastructure services, including hybrid cloud, data centers, and storage. GlobalLogic provides product engineering and design services, while HDS offers system integration and digital transformation services. Recognizing each entity’s unique service offerings and go-to-market strategies is essential, especially when pursuing managed services deals.
• The “One Hitachi” strategy gives access to different companies within the Hitachi group. Defining how collaboration, insourcing, and transfer pricing operate among partner companies is essential. This will remove any uncertainty about solution dependency, accountability, and responsiveness.
• The efficient system integration in IT/OT convergence depends on the scope, scale, and systems with specific enterprise goals. Enterprises must know that HDS can handle deals ranging from $5 million to $50 million across the manufacturing, healthcare, energy, and transportation sectors, particularly in North America and Europe.
• In addition to “One Hitachi” companies, HDS has partnerships with SAP, Oracle, Hyperscalers, etc. However, it needs to increase its global scale apart from Portugal, Vietnam, and India, diversify its industry presence, and foster partnerships to drive value to the enterprise.

The Bottom Line: Manufacturers can accelerate their IT/OT convergence with HDS, which can leverage its existing ecosystem and pre-built accelerators and augment GenAI in their system integration process.

Enterprises investing in IT/OT integration processes as part of Industry 4.0 can benefit from Hitachi’s newly carved-out business, HDS. They can leverage the legacy Hitachi Group Companies and the OneEcosystem approach in the implementation process to provide early outcomes compared to other providers. HDS’ readily available accelerators and investments in emerging technology, such as GenAI, can add new sources of value to the digital manufacturing journey.