During November, I traveled far and wide, attending some of the leading manufacturing events across Europe, including the Manufacturing Leaders’ Summit in Liverpool and the European Manufacturing Strategies Summit in Berlin. I was delighted to deliver keynote speeches at both events, where I focused on how to ensure that there is a real return on investment in digital transformation.
After reflecting on my discussions with attendees, including Chief Operating Officers and Chief Information Officers of some leading manufacturing companies from around the world, it was clear that digital transformation remains a puzzle to some. Many businesses at the various events had begun their digital transformation journey but were uncertain as to the next steps; I call this the “Sudoku problem.” However, there are five key steps I recommend in order to help reach that “lightbulb moment.”
1. To succeed in digital transformation, go back to basics:
Firstly, my advice to executives and CIOs is to start small, building in a sequence of incremental steps. There is no need for a ‘Big Bang’ – solving one giant problem at once. Take the time to define what success looks like and agree desired outcomes from investment in digital transformation. Otherwise, businesses can find themselves in that Sudoku situation I mentioned – seemingly correct moves can take them into difficult corners.
2. Dissect your problems:
Digital transformation is a complex area, with the phrase itself becoming meaningless jargon. Ultimately, the key is to dissect your own problems and requirements to understand which digital components will benefit you – don’t adopt transformation for the sake of it. Audiences at both events seemed unified in their need to understand the big picture of digital transformation and what the benefits are. What is needed is practical advice which makes the options and benefits real and accessible to people who are at the coalface in manufacturing plants across Europe.
3. Some technologies will deliver greater ROI than others, so choose wisely:
The term ‘Digital Transformation’ is becoming a catchphrase for an array of technologies. To understand which one is best, we must understand immediate and long-term objectives. For example, before adopting digitalisation the steel manufacturer Gerdau set the goal of reducing overall maintenance costs by 20%. I interacted with many businesses who had already started their digital transformation. Of these businesses, I found that even though many had started the process, there was not a comprehensive understanding of all digital solutions available. This is somewhat surprising as it is crucial to analyse and understand the available options before making significant investments and strategic decisions on transformation.
4. Buy vs build analysis is crucial – keep it in mind when making your business case:
You must ensure you have the detailed manufacturing knowledge and the ability to discern between different types of digital transformation – this could be Asset Performance Management, Artificial Intelligence implementation or the introduction of Industrial Internet of Things. Think of the buy vs. build analysis - it is not always most efficient to build a custom solution, as there are organisations out there whose competencies allow you to buy a solution, enabling substantial savings.
A ‘must-have’ is Predictive Maintenance, driven by Asset Performance Management and Field Service Management – an ensemble of tools allowing manufacturers to securely collect and analyse data in real time, so businesses can operate faster, smarter and more efficiently.
5. Culture is as important as ever – take care of it to ensure your transformation is smooth:
Culture is often an overlooked aspect when considering, planning and executing digital transformation. I can’t emphasise it strongly enough – if businesses want to ensure a successful transformation, there must be a change in culture. It’s not about hiring one person with one skillset, but about considering the whole suite of skills required, and how the culture needs to be transformed to align with new practices and systems. People are the most important assets. Understand your current culture, analyse the changes and challenges that need to be made and be open about your plans.
My November tour provided me with the opportunity to hear first-hand the issues facing leading manufacturing firms. I heard directly from executives some of the issues they face when investing in digital transformation and I believe that with careful consideration and planning in small strategic steps, the benefits of investment can be reaped and the Sudoku problem will be avoided.