WIXLIB

INTRODUCTIONWhere we are nowTaken together, these four sectors of the economy — buildings, data centers, industry, andinfrastructure — are all undergoing transformations that will fundamentally change the waypeople will live, work, and play.Despite this potential, many countries and industries are operating well below their digitalpotential. For example, the US, in achieving just 18 percent of its potential, is well ahead ofmost of Europe.14 The reason for this lag is largely a matter of complexity. A survey of chiefinformation officers identified “complex legacy technology” as the primary barrier to digitaltransformation.15 Another survey of business and IT professionals echoes this sentiment,with a majority reporting “increasing complexity of their technology ecosystem” and lowconfidence in resolving digital performance problems.16A blueprint for successfuldigital transformationThese surveys and reports indicate that many businesses and organizations needa trusted authority to manage this complexity to unlock the full potential of digitaltransformation. Schneider Electric has travelled the road of digital transformationfor decades. Twenty years ago, a proto version of the Schneider Electric flagshipEcoStruxure solution was known as Transparent Factory, an Ethernet-based architecturethat connected factory shop floors to the internet. This early investment in digitaltransformation paid off; digitization now accounts for about 50 percent of SchneiderElectric revenue, and the company is still transforming.EcoStruxure is the engine that drives the digital transformation of energy managementand automation. It is an IoT-enabled digital platform consisting of connected products;edge control solutions; and apps, analytics software, and services. The platform affordsvisibility and control across the enterprise via real-time monitoring, mobile insights, digitaltwin capabilities, and proactive risk mitigation. Today, EcoStruxure covers 500,000 sitesglobally, connecting some 45,000 developers and system integrators, 3,000 utilities,and 650,000 service providers and partners as a community.McKinsey Global Institute, “Digital Europe: Realizing the continent’s potential,” June ing-the-continents-potential14 15Logicalis, “Logicalis Global CIO Survey 2017 – 2018,” 2018, pdf16Dynatrace, “The Global Digital Performance & Transformation Audit,” 2018, l-performance-transformation-audit.pdfLife is On Schneider Electric6

INTRODUCTIONMeasuring the power ofdigital transformationAfter helping thousands of customers navigate successful digital transformation, SchneiderElectric is ready to present a comprehensive report on the state of digital transformationamong a global sample of customers. The Global Digital Transformation Benefits Report putsforth concrete evidence of the power of digitization across the spectrum of global commerce.This evidence takes the form of 330 data points developed from a sample repository of 230customer projects Schneider Electric completed in the last five years across 41 countries. Inaddition, the report features stories from 34 customers, providing overviews of the goals theystarted with, the challenges they faced, the solutions they chose, and the results they saw.At the core of this report are 12 key business benefits of digital transformation. These benefitsare divided into three categories, each essential to effective marketplace competition: capitalexpenditure (CapEx), operational expenditure (OpEx), as well as sustainability, speed, andperformance. The 12 benefits (See Table 1) center around two overarching statistics: Ourcustomers’ average (mean) performance on these benefits, as well as the “up-to” or bestcase scenarios. The goal for this report is to provide readers with a useful and realisticbenchmark on digital transformation’s potential.BENEFITUP TOAVERAGECapExEngineering costs and time optimization80%35%Commissioning costs and time optimization60%29%Investment costs optimization50%23%Energy consumption savings85%24%Energy costs savings80%28%Productivity50%24%Equipment availability and uptime50%22%Maintenance costs optimization75%28%CO2 footprint optimization50%20%Time to market optimization20%11%Decrease in occupant comfort-related incidents33%24%0.75 year5.3 yearsTable 1: The 12 benefitsat a glanceOpExSustainability, Speed, and PerformanceReturn on investmentLife is On Schneider Electric7

INTRODUCTIONEcoStruxure — the engine fordigital transformationEvery one of the customer projects in the dataset involved the use of the EcoStruxure platform— our IoT-enabled architecture consisting of connected products; edge control; and apps,analytics, and services.MethodologyTwo hundred and thirty major projects completed by Schneider Electric and our alliance ofpartners were reviewed in order to identify stories of digital transformation. These projects,completed over the last five years, were then analyzed for key takeaways related to CapEx,OpEx, and other core benefits. This analysis generated 330 unique quantifiable data points,which were then categorized into one of the 12 benefit types. The average result for eachbenefit and its best-case scenario were also established to give a sense of the full range ofachievable results. See Table 1 on page 7 for a summary of these analyses.Life is On Schneider Electric8

01 CapExCreatingupfront valueFor some businesses, digital transformation seems like an expensive upfrontprospect. Not only would they need to buy new equipment, they would needto find a way to integrate it with their complex legacy systems. Our customers’projects demonstrate the opposite. In many cases, newer interoperable solutionsintegrate faster and easier than outdated alternatives. In addition, the equipmentlongevity gains achieved by advances in intelligent maintenance and monitoringallow companies to future-proof their investments, i.e., deferring future CapEx.By embracing digitization, businesses can finally end fragmentation amongstakeholders in the planning, design, installation, and commissioning stages,thereby creating upfront value.Life is On Schneider Electric9

CAPEX: CREATING UPFRONT VALUECapEx Benefit #1:Engineering costs and timeoptimizationThe engineering phase plays an outsized role in total cost of ownership (TCO).Around 30 percent of construction costs result from rework.17 Fortunately, solutionsexist today to better manage such costs. In complex projects where numeroussubcontractors often work in silos, digitizing the engineering phase enablescentralized integration among projects and systems, thereby streamlining the work.As a result, digital transformation can drive significant savings in engineering costsand time optimization. Our analysis indeed indicates that our customers on averagesaved 35 percent in this area, and one customer saved 80 percent.BENEFITEngineering costs and time optimizationUP TOAVERAGE80%35%Mohammad Miri and Mahsa Khaksefidi, December 2015, “Cost Management in Construction Projects: Rework and Its Effects,”Mediterranean Journal of Social Sciences, e/viewFile/8491/815117 Life is On Schneider Electric10

CAPEX: CREATING UPFRONT VALUEManufacturing faster time toprofit at a siloxane plantDow Corning, US“After working extensively with the team at SchneiderElectric, we developed a strong action plan Whenthe time finally came, we had one week to performthe upgrade, and everything was going as it should.”— Chris Wolfschlag,Project Manager,Dow Corning Engineering SolutionsAt Dow Corning’s Carrollton, Kentucky siloxane plant,operational uptime is a must. When the plant’s distributedcontrol system reached the mature stage of its life cycle,the plant’s managers decided that, even though it wasn’tbroke, they would “fix” the system by upgrading it to amodernized, digital EcoStruxure Plant platform. That way,the plant, one of the largest silicone materials productionfacilities in the world, would avoid any unexpecteddowntime due to aging equipment failures.Dow Corning’s managers were initially concerned thedigital overhaul would require a rip-and-replace approach,which would cause costly production slowdowns.However, in working with Schneider Electric engineers,they were able to design a phased approach that allowedengineering and installation work to occur with minimalinterruption. The existing infrastructure — nose cones andfield wiring — could remain in service while new cabinetsand more powerful controllers were installed.Dow Corning’s migration toward full digitization unlockedsignificant CapEx avoidance. With an open, interoperableEcoStruxure solution and an agile, phased approach, theteam was able to complete the job 50 percent faster andthereby save 50 percent of CapEx. In addition, because ofthe rapid completion, Dow Corning was able to generatetwo extra days of production, ensuring a faster time to profit.50%CAPEX SAVINGSEcoStruxure ArchitectureAPPS, ANALYTICS, AND SERVICES:Modernization servicesEDGE CONTROL:EcoStruxure Plant including EcoStruxure Foxboro DCSCONNECTED PRODUCTS:Reduced costsby keepingexistinginfrastructureUsed a phasedapproach toprevent costlyslowdownsSped timeto profit withtwo extra daysof productionLife is On Schneider Electric11

CAPEX: CREATING UPFRONT VALUEAvoiding wasted engineeringcosts in a wastewater plantWide Bay Water Corporation, Australia“Everything we do at Wide Bay Water Corporation,we do with excellence. Our Schneider Electricsolution helped Nikenbah wastewater treatmentplant achieve this and more.”— Tim Mahony, Manager,Electrical Engineering Services,Wide Bay Water CorporationAlongside the pristine waters of Fraser Bay in Queensland,Australia, the Wide Bay Water Corporation runs the stateof-the-art Nikenbah wastewater treatment plant. Populationgrowth and aging infrastructure were putting pressure onthe corporation to expand and modernize its systems. Theyalso sought to achieve water recovery rates of 90 percentby improving filtration and process automation systems.In the past, Wide Bay Water had used multiple vendorsand solutions within their plants, which slowed downinstallation, commissioning, and maintenance. Based on thisexperience, Wide Bay Water wanted to work with a singleprovider who could offer fully integrated, high-availabilitysystems. The EcoStruxure Plant platform fit the bill — inaddition to ease of installation, it afforded deep visibility intoenergy use and performance issues.Wide Bay Water’s new digitized water treatment plant wasbuilt under budget by AU 2 million. These savings weremade possible by speeding engineering integration timesby 20 percent, and shortening commissioning times by 25percent. In addition, the EcoStruxure Plant solutions freedup additional finances by ensuring fewer labor hours, fasterfault detection, and 12.5 percent energy savings.20%FASTERINTEGRATION TIMESEcoStruxure ArchitectureAPPS, ANALYTICS, AND SERVICES:EDGE CONTROL:EcoStruxure Geo SCADA ExpertEcoStruxure Hybrid DCSCONNECTED PRODUCTS:Cut project costs— 2 millionunder budgetSaved 50,000per year onlabor hoursGenerated12.5% energysavingsLife is On Schneider Electric12

CAPEX: CREATING UPFRONT VALUECapEx Benefit #2:Commissioning costs andtime optimizationCommissioning isn’t a one-time process. New systems and assets arecontinually being added to the mix, and integration of the old and the newneeds to be seamless. Open, interoperable, and IoT-connected devices canexpedite the commissioning process by “playing well” with other systems. Inaddition, decreased commissioning times can speed the overall progressof digital transformation by ensuring faster startup. The customer projectsfeatured here — a Mexican natural gas facility and a Dutch drinking watercompany — illustrate the opportunities for speeding the commissioningprocess. One customer cut commissioning costs by 60 percent, while theaverage savings are 29 percent.BENEFITCommissioning costs and time optimizationUP TOAVERAGE60%29%Life is On Schneider Electric13

CAPEX: CREATING UPFRONT VALUEFueling faster site startups at aMexican natural gas plantPemex (Petróleos Mexicanos), MexicoThe oil and gas industry, with its expansive supplychains and automation-friendly value chains, is ripefor digital transformation in the CapEx phase. Pemex(Petróleos Mexicanos), Mexico’s state-owned petroleumcompany, decided to harness the power of digitizationwith an ambitious project to update its natural gasmeasurement sites.SCADA International, a Schneider Electric partner in theSystem Integrator Alliance, came aboard to help Pemextransition away from older flow computers and replacethem with SCADAPacks, which are intelligent remoteterminal units. The new SCADAPacks provide Pemexwith the ability to validate the volume of gas flowingthrough their pipes in real time, affording them greatervisibility into their system’s performance.The new SCADAPacks seamlessly integrate with existingsystems, enabling a rapid installation period that takes60 percent less time. Before the new digital solution wasimplemented, site startups lasted several days. Now theytake four hours. This dramatic reduction translates into50 percent savings on labor hours.50%LABOR HOURSAVINGSEcoStruxure ArchitectureAPPS, ANALYTICS, AND SERVICES:EDGE CONTROL:SCADAPack 350CONNECTED PRODUCTS:RealFLO 6.84 with Pemex modbusStreamlinedconfigurationand mentImprovedoperationalefficiency viasmart maintenanceLife is On Schneider Electric14

CAPEX: CREATING UPFRONT VALUEA Dutch water utility unites fiveautomation systems into one platformVitens, Netherlands“[With the Schneider Electric solution] we will havea high-performance automation platform with highreliability and maintainability.”— Doeke Schippers,Manager,VitensVitens, the leading drinking water supplier in theNetherlands, was bogged down by five regions operatingunder different automation systems. The company installedthe EcoStruxure Plant architecture to unify these fivesystems under a single platform. This digital integrationstandardized the system’s operations, shorteneddeployment times, and reduced engineering costs.The newly installed automation platform includes software,servers, and sensors that install quickly and integrate withlegacy systems. With EcoStruxure Plant, Vitens now has auniversal method for collecting, analyzing, and reportingon the entire water management system. In addition, theUnity Application Generator solution sped up softwarecreation by minimizing the number of staff needed to buildand maintain applications.The digital transformation of Vitens’ automationarchitecture freed up savings in the project’scommissioning phase. Because fewer staff were neededto install and commission the new equipment, deploymenttimes shrank by 65 percent, while engineering costsdropped by 25 percent.25%ENGINEERINGCOST REDUCTIONEcoStruxure ArchitectureAPPS, ANALYTICS, AND SERVICES:EDGE CONTROL:EcoStruxure Hybrid DCSCitect SCADACONNECTED PRODUCTS:M340 PAC controllersQuantum controllersConneXium switchesStandardizedreporting,benchmarking,and designAddedflexibility overresourcesCut engineeringcosts by 25%Life is On Schneider Electric15

CAPEX: CREATING UPFRONT VALUECapEx Benefit #3:Investment costs optimizationOne overlooked benefit of digitization is that it can prolong the life of existingequipment and thereby create investment cost savings. Digitization extendsequipment longevity by ensuring assets are optimally maintained throughoutthe life cycle. Digitizing also enables cloud analytic tools to make timelyrecommendations based on reams of historical and real-time data. Resultsfrom Schneider Electric customers indicate that these savings can besubstantial — up to 50 percent reductions in investment costs, with an averagesavings of 23 percent.BENEFITInvestment costs optimizationUP TOAVERAGE50%23%DartPoints, an edgedata center andcolocation provider,reduced total costof ownership for itscustomers by as muchas 45% over threeyears. Discover moreHERE.Life is On Schneider Electric16

CAPEX: CREATING UPFRONT VALUEOutlasting the competition ina competitive cloud marketF12.net, Canada“The Toronto data center marks the next step in ourjourney to advance the technology posture of [smalland medium businesses] across Canada, by offeringfully managed geo-redundant data centers fromEdmonton to Toronto.”— Calvin Engen,Director of IT,F12.netIn a tight cloud and colocation market, F12.net needed astep up — a step up to geo-redundancy. Their decisionto build a new data center in the greater Toronto areawas made easier with the knowledge that their new ITinfrastructure would integrate and scale quickly, lastsignificantly longer, and take up less space than oldermodels.F12.net used the EcoStruxure IT On-Premise solution toenable power usage effectiveness monitoring. This way,the company could ensure the delivery of clean, reliablepower to its IT infrastructure and thus ensure exceptionalcustomer service. They also installed EcoStruxure-readylithium-ion UPSs, which deployed quickly. Together, theseupgrades extended equipment life cycles and deferredfuture CapEx.F12.net’s digitally integrated infrastructure is built tooutlast the competition. It extends UPS longevity byup to three times the expected life of lead-acid (VRLA)alternatives. The total cost of ownership is thus reducedby 30 – 50 percent. In addition, these UPSs take up lessspace, weigh less, and feature a modular design, so thefacility can increase capacity as needed, without needingto build out more space.TOTAL COST OFOWNERSHIPREDUCED BY30 – 50%EcoStruxure ArchitectureAPPS, ANALYTICS, AND SERVICES:EDGE CONTROL:EcoStruxure IT On-PremiseCONNECTED PRODUCTS:Galaxy VM UPSIntroducedscalability forcontinuedbusiness growthEnabled fasterrecharge timesExtended batterylife three timeslonger than VRLALife is On Schneider Electric17

CAPEX: CREATING UPFRONT VALUEBuilding the hospital of the future— without silosPenn Medicine, US“We’re building a hospital that will allow us to deliverthe very best care the 21st century can offer patients— but we’re also ‘future-proofing’ it to ensure that wecan quickly and seamlessly adapt what we do to helpour patients in the coming decades.”— J. Larry Jameson, MD, PhD,Dean of the Perelman School of Medicine,University of PennsylvaniaPenn Medicine in Philadelphia, Pennsylvania, the firsthospital and medical school in the United States, is now aworld-renowned medical center. To build on their success,Penn Med is constructing the hospital of the future: adigitally driven facility agile enough to adapt to the next 100years of medicine.Together with Schneider, the team uses a project deliverycontracting method built on lean principles — oneintegrated project plan, using EcoStruxure for Healthcareto break down design and contracting silos. Componentsof this platform were proven in an integration lab built forthe project, enabling the team to uncover potential issuesbefore they multiplied in the field. The team also used theplatform to enhance patient satisfaction through intelligentbuilding controls, power monitoring, patient entertainment,nurse call, lighting, and shade control. EcoStruxure alsoprovides a central platform for data collection, which willprovide a

transformation. Schneider Electric has travelled the road of digital transformation for decades. Twenty years ago, a proto version of the Schneider Electric flagship EcoStruxure solution was known as Transparent Factory, an Ethernet-based architecture that connected factory shop floors to the internet. This early investment in digital