Digital transformation has been a hot topic in the manufacturing industry for some time now. In this article, we put together some of the most-asked digital transformation questions and answer them. If you come up with any more questions about digital transformation, industry 4.0, or IoT, etc. Contact us here and let us know, we would be happy to answer.
Without further ado, let’s get started.
What does digital transformation really mean for today’s business leaders?
First off, it’s a real opportunity for change. It’s helping organizations go from point A to point B, from the current state to a future state. How do you do this? By recognizing the value of data, and then actually implementing practices, strategies, and principles to get value from data.
When you start the process of changing company culture and how the company works, then you can really start to see a positive difference. A large part of digital transformation is becoming a data-driven organization with all data coming from a single version of the truth, one source.
Leaders can think about how the company can attract new people and new generations. Digital transformation is also a way to increase company evaluations. Believe it or not, nowadays many private equity groups are investing in digital transformation initiatives when they purchase companies to drive the evaluations higher.
So, to sum it up in one sentence- Digital transformation brings opportunities for positive change and higher company evaluations for business leaders.
Where should businesses start with Digital Transformation?
We believe that there are 3 main stages here.
The first stage is to figure out where you’re at. The second stage is to figure out where you want to go. And the third is to figure out what that roadmap looks like. So, to go through a digital transformation you need to go through those 3 steps.
Where are you today?
Start looking at the makeup of your organization- Who would be accepting of this change? Who will be opposed?
Figure out where you stand in the market today, start to do a S.W.O.T. analysis on your company. Take an inventory of the business, as well as the intelligence. The use of data, networks, and software, don’t forget to note the lack of data, networks, and software. What data do you have access to right now? What’s available within the company that you don’t have access to? Typically, the majority of data is actually available, but companies aren’t aware and don’t have access. Data stored in excel, on paper, whiteboard, in people’s heads, but no access.
Where do you want to go?
Look at what the companies vision is, and if there is none, then now is a good time to set a clear vision. Then, you can start to think about how the company wants to work with data. Do they truly want to change and become a data-driven organization? Becoming a data-driven company has proven to be immensely valuable today. If you look at the companies that are taking over today, they are all data companies. Facebook, Google, Uber, Air Bnb, and even manufacturers such as Tesla.
Create a roadmap for how to get there.
How are you going to get where you want to go? What do you need? How fast? What help will you need? Which people? What tools?
Start to define a digital strategy that is defined by company leadership and pushed down throughout the rest of the organization.
This digital strategy then helps companies realize:
- The data that they currently have,
- The value of that data, and
- How to use that data.
Along with this digital strategy, a number of rules, principles, and best practices should be put in place. This will help you to define the activities, technologies, and architectures that are used to implement a solution.
What are some Common Problems companies come across when attempting a Digital Transformation?
I try not to focus on IT departments so much here, but they seem to be a common roadblock. This sounds backward right? they are the IT guys, they work with data, software, and the latest technologies all the time. Sometimes, they do embrace this change, but many times this is not the case. A common reason IT departments are opposed to these technologies is that they might require a different approach than they are used to.
A specific example of this would be when the IT department says that everything is in their ERP system, and they have no need for anything else. The truth is, an ERP system leaves a lot on the table and doesn’t pull much data from the plant floor if any at all.
Another example is that the IT department might want to take data from the plant floor and throw it up to a data lake. The problem here is that you lose context, data gets lost, and there is no organization to the data. Furthermore, many people working on the plant floor lose access to this valuable data once it is thrown up with the other IT projects in that data lake.
A third example- some IT departments (not all of them) act as a firewall. The difficulty here is that their mindset is to keep everybody out, which is understandable from their perspective, their job is to keep everything secure. However, there are of course ways around this. Every department within a company should be a service organization for the other departments. IT is no exception, they really should be a service organization as well as an enabler for this type of technology.
What Culture is Needed for a Digital Transformation?
Part of the culture for a company truly trying to grow and become a digitally transformed organization should entail identifying the people who are opposed. Then, find out how to work with or work around these ones.
The culture should also be a place where people are open to change. People should want to drive innovation, want to participate, want to see the company headed in the right direction for growth. Consequently, this also helps the people within the company grow, something that leaders should keep in mind.
People should be on the same page with leadership. If there is any disconnect or disrespect happening, it should be addressed. The goal should be with this digital transformation, and with these good leadership conversations, that can start to turn around so the entire company can run as one solid unit.
Why do I need to transform digitally?
The whole purpose of a digital transformation is really to make a company data-driven. And the whole purpose of a company becoming a data-driven organization is to understand what’s going on. To get deep visibility directly into the plant floor in real-time so that you can solve challenges, drive innovation, and make improvements to your process.
How do you know whether the digital transformation is working at your organization?
A lot of this deals with the aspects of becoming a data-driven organization. Remember that single version of the truth that I mentioned earlier. For this to work, people need to have the tools to access the data, they need to be educated on how to use the data, they need to be enabled to work with that data. Most importantly, they need to proactively make decisions and take action.
Circling back to our initial question, how do you know if the digital transformation is working? Answer these questions- do people in all departments and layers of the organization have access to the data? Do they have the tools they need? Are they enabled? Finally, are they making decisions and taking action? That is how you can measure success.
What other Questions should we Answer?
These are a few common questions that we hear all the time when talking about digital transformation. What other digital transformation questions do you have that we could answer? Leave us a message and we will be sure to answer.
Digitally transforming your company is one essential step to preparing yourself for Industry 4.0 and the future of manufacturing. Historically, the vast majority of companies fail to transition from one industrial revolution to the next. Much of this can be attributed to mindset, company culture, and not being willing to adapt and change with the times.
Think big, but start small. Start planning, start preparing, and start working towards digitally transforming your manufacturing company to stay competitive and ensure a successful future.