Enterprises are needed to transform infrastructure — and the planet

Bringing together the power of systems thinking and digitalisation in outcome-focused ‘enterprises’ is the best route to making our infrastructure smarter, more sustainable and more resilient, writes Michael Salvato.

The growing pressure of climate change means that infrastructure owners and operators are facing a twin challenge: how to reduce and eliminate carbon emissions from their operations, and how to make them more resilient.

The stakes could not be higher. In order to survive and thrive on this planet in the future, people will need sustainable infrastructure systems that help support a sustainable society.

The key word here is ‘systems.’ Sustainability – of which carbon emissions and resilience are two important measures – is not about any one individual asset, but about how the entire infrastructure system functions. Sustainability requires a joined-up, systems view of infrastructure, its interconnections and its interdependencies. As an emergent property of a system, sustainability must be developed collectively from the system as a whole.

The deep, systemic carbon reductions required to prevent the climate emergency evolving into a climate disaster; the system-wide action that is needed to prevent essential services being disrupted by weather events; the systemic interdependencies between society, the built environment, and the natural environment: all require us to look not just at the parts but how well the parts work together to enable effective overall outcomes.​

Solving wicked problems

The twin challenges of climate change – carbon reduction and resilience – are classic ‘wicked problems’ that are incredibly difficult to solve, yet absolutely must be. The way to solve wicked problems is to approach them at the right level.

We need to see infrastructure as the complex, integrated system of systems it is, with sectors and organisations relying on each other to function. There is a multilayered hierarchical structure at play. A subway train is part of the mass transit system, which is part of the transportation system, which in turn combines with many other systems to form the whole urban environment.

The requirement today is to understand how each layer contributes to the desired outcomes and works to produce value. From there, organisational structures need to be developed to manage each of them appropriately. These collaborative, outcome-focused structures are called enterprises, and they can be aligned to achieve any manner of system-wide outcomes, benefitting the economy, the environment and society.

A digitally-enabled transformation

To date, infrastructure organisations have mainly focused on parts of the systems they manage – asset delivery and operation – because taking a system-wide view involves a level of complexity that was difficult for most people to deal with.

However, digitalisation provides us with the tools we need to grapple with complexity. Smart, connected assets, providing data to interactive models of whole systems – digital twins – offer the capability to support decision-making at a system-wide level. Visualization and other feedback mechanisms can alter societal behaviours and future outcomes.

Such technologies are game-changing. Digital technologies are beginning to be embedded into the physical world to create cyber-physical systems – a development known as Infrastructure 4.0. This is providing new ways of generating, harvesting, integrating and acting upon data. It enables information to be shared more easily and made meaningful to a wider range of people, from infrastructure professionals to citizens, government and investors. And it is enabling more collaborative ways of working. All of which makes for better decisions, greater efficiency, improved service and increased value – from both existing and new infrastructure.

Digitalisation combined with systems thinking offers infrastructure organisations the means, and the opportunity, to transform themselves into enterprises that can address wicked problems and help humanity to flourish long into the future.

Creating an integrated digital enterprise

Digital transformation is a process that an organization must go through to evolve its business model towards Infrastructure 4.0, through the broad adoption of digital technologies and culture change.

Making this transition is not straightforward and will require, among other things:

• Leadership that brings stakeholders together into a common enterprise and keeps it focused on the right outcomes
• Partnerships and integration between different stakeholders, organisations and suppliers involved in the enterprise system
• A common approach to data management, underpinned by standards and a commitment to openness, accuracy and security
• Technology that enables the enterprise to work on a shared platform accessible to all
• People with the right skills and mindset to lead, execute and support the transformation

Achieving digital transformation requires processes, organisational structures, business models and behaviours to be realigned, and the right technologies and skills to be put in place. These changes need to encompass all in the enterprise.

Steps on the journey

We recognise that organisations have different starting points on their road to digital transformation, and that it is a process best achieved in stages. We’re helping clients manage the change, setting the journey out in manageable steps and building capability over time. The central importance of a systems approach means that transformation itself must be a collaborative process, with different teams, suppliers and external stakeholders moving forward together. This will break from the traditional view of many in the infrastructure world, who see their work as a series of discrete operations, projects or interventions by isolated actors.

For the infrastructure industry, the challenges presented by climate change, digitalisation, and sustainable development are more daunting and more essential than any seen before – the systems society relies on are under unprecedented pressure. The industry needs to step-up in new ways. It is not that the industry’s current institutions and disciplinary boundaries are obsolete. Rather, the complexity of the challenges and the required rate of system evolution call for a much more sophisticated and integrated approach, focused on the management of existing infrastructure systems to sustain and enhance its performance; new construction remains important, but new projects only augment the systems we already have.

From the top to the bottom of the industry, from government organisations and investors through infrastructure owners and operators and across the supply chain, much greater co-ordination is required.

Michael Salvato

Vice president for infrastructure advisory services and principal for asset management

Taking a systems view of infrastructure, and recognising the power that Infrastructure 4.0 offers, these organisations need to discuss and define desirable outcomes, then set common objectives. This will shape strategy, planning and approaches to delivery.

We should hope and expect to see new enterprise-led approaches emerging, pursuing solutions that resolve the climate change challenge and the many other wicked problems we face, for the common good.​