Digital Transformation – Harvesting a Prolonged Winning Streak
Published on : Wednesday 04-11-2020
With the progress of digital transformation, a strong collaboration will emerge between people, processes and products, says Darshan Shah.
What is Digital Transformation? Digital transformation is an overall business strategy, applicable across all industries, to create new or modify traditional business process, challenges, culture and create new opportunities by using technology. Reimagination of business is required to accept entirely new ways of working and delivering value to customers.
I believe the top secret to flourish in this VUCA world is being willing to learn, unlearn and relearn with a growth mind-set. VUCA stands for ‘Volatility, Uncertainty, Complexity and Ambiguity’. The best example of VUCA is Covid-19 pandemic which led to a global lockdown. It has affected all the businesses in each size of industries. Now a days, digital transformation is the most popular term across industries. Many organisations equate digital transformation with an IT or a digital project. For me, digital transformation is not just a project but a journey. Every industry has a different path to follow. Even the most advanced technology companies like Amazon are always in transformation mode to make themselves even more digital.
At the same time, we have many businesses with traditional manufacturing that are still thinking of taking the first step in the digital age. Defining a digital transformation strategy is the most crucial step in the journey. This kind of business is having a fixed mind-set, silo culture and they believe technology is a risky and costly affair.
According to a recent digital survey by WIPRO, more than 33% of executives believe that lack of clear transformation strategy is the main barrier in the digitalisation journey. This article will guide you about the key steps on ‘How to embark on a successful digital transformation journey’.
1. Defining the value proposition
When we are trying to align the ‘Why’ with digital transformation, many people understand this in different ways. Often leaders believe that technology leads the digital transformation, and they don’t know why they are implementing it. Lack of defining value in earlier stage often leads to failure.
To taste the success of the digital transformation journey, it is essential to identify business strategy, goal and needs in the initial stage. It is always good to start with long-term goal with pre-defined multiple milestones and align the same with your customers’ requirements. For proper execution, use this lean canvas to define proper business model.
2. Digital Culture
C-Level support and enthusiasm for digital transformation is very critical to the organisational culture change.
Peter Drucker, the well-known American management consultant has famously stated that ‘Culture eats strategy for breakfast’. Digital culture is the spirit of management and collaboration between managers and employees, which is either aspired to or has been developed in companies that have successfully completed their digital transformation.
According to a Capgemini change management study ‘Culture First’, the CEO is responsible for the digital culture change at 80% of front runners, but at just 10% of late adopters. Look at the key features to adopt a digital culture:
- Customer orientation
- Digital technology and processes
- Entrepreneurship
- Agility
- Autonomous working condition
- Leadership
- Collaboration
- Innovation & learning.
3. Think big, start small & learn fast
When you have a long term goal in your digitalisation journey, it is always good to use agile methods (e.g., Scrum, Kanban) to define each of your milestones. It’s always important to start with small by identifying your first ‘proof-of-concept’, which helps you to set a stage for future initiatives and develop trust in your leader and team.
“It called transformation for a reason; it takes time, you’re not going to change everything tomorrow”
-Barry Lynch (Senior VP of Field Services at PTC)
After successful start, the focus needs to be on gathering data to learn before the next steps. And to learn fast, it is vital to keep spreading your vision within the organisation to make them understand what and why you are doing it. It is always good to have everyone on the same page!
There are great real-life examples (Blockbuster, Amazon, Walmart, Fujifilm, Google, Apple and a range of other companies) to show what has and hasn’t worked over the last years. We can use their insights based on research in the field of technological innovation to learn faster to make
wiser decision to start small.
4. Map to the right technology
With the foundation established in the first 3 steps, technology becomes the necessary lever to reach desired and defined outcome.
In the starting, many companies face challenges to adopt digital technologies. To build and sustain a lead in the red ocean, they need to broaden and deepen their practical knowledge about digital technologies which will help them to reshape the structure of industries and the strategy of companies. In Industry 4.0, four technologies are playing a key role – Artificial Intelligence, Internet of Things, Robotics and Additive Manufacturing.
Artificial Intelligence: It refers to software algorithms that attempt to replicate tasks that have historically required human intelligence. According to a research report by Accenture in collaboration with Frontier Economics, by 2035, AI-powered technologies could double annual economic growth rates and boost labour productivity by up to 40 per cent by fundamentally changing the way work is done.
“AI will perform manufacturing, quality control, shorten design time, and reduce materials waste, improve production reuse, perform predictive maintenance, and more.”
-Andrew Ng, the co-founder of Google Brain and Coursera
Internet of Things: It refers to a system of objects, as well as even people and animals, who carry unique identifiers and can transfer data over the internet without any human-to-human or human-to-computer interaction. We can think of the IoT as an internet-based network, where the connected things are nodes of the network.
Example: A sensor embedded in an aircraft engine is an IoT node. So is an internet-connected doorbell, or a camera, a smartphone, or a driverless car. This would be true also of any person who gets a pacemaker, or a chip implanted in his or her body, which can then transfer data over the internet.
According to research conducted by Oneserve in the UK in collaboration with manufacturers, 3% of all working days are lost annually due to faulty machinery, and the impact of machine downtime was estimated to cost UK manufacturers more than 180 billion pounds a year.
Predictive maintenance is the best use of Internet of Things and AI with machine learning, which allows companies to predict when machines need maintenance with high accuracy, instead of guessing or performing preventive maintenance. Predictive maintenance prevents unplanned downtime by using machine learning. Technologies such as sensors and advanced analytics embedded in manufacturing equipment enable predictive maintenance by responding to alerts and resolving machine issues.
“By analysing the data, our artificial intelligence systems can draw conclusions regarding a machine’s condition and detect irregularities in order to make predictive maintenance possible.”
-Roland Busch, Siemens AG CTO
Robotics: Machines that are programmable by a computer and which can carry out a complex series of actions automatically. Technically, the term robot can be applied to physical machines such as a drone or purely digital ones such as a voice assistant on a smart phone.
Use case: Robotic solutions support industries such as manufacturing, water, food and beverages, process, packaging, rail and pharmaceuticals. Their services and solutions aim to address issues like increased productivity, operational efficiency, energy management, life cycle engineering, security, service, training, and solutions from plant to business. In this segment, most of the robots used in manufacturing are for welding, for picking and putting parts together, automatic guided vehicles and assembly robots, all for faster processing and with greater precision than human workers.
Additive Manufacturing: It also known as 3D printing. It is a cutting-edge technology that's changing the manufacturing landscape. It is well suited for rapid prototyping, quick turnaround end-use parts, or even tooling for traditional manufacturing techniques. AM is helping them to reduce development and manufacturing costs; increase production, speed, innovation, and time-to-market; produce new structures and decrease waste. AM is highly utilised by aerospace, automotive, medical and consumer industries.
Use case: Complexity and low weight-to-strength ratio is a necessity for a part in the automotive industry. AM is not only used for prototyping for automobile parts, but its advantages have also made it able to be used for AM of actual components and vehicles. For example, Optomec used LENS (Laser Engineered Net Shaping) 3D printers to reduce the material, time and cost of manufacturing of Red Bull Racing car components including drive shaft spiders and suspension mounting brackets.
5. Scale Fast
After successfully choosing the technology, industries will able to see the results based on the initial uses cases which will exactly defines the digital transformation strategy. Now, it’s time to leverage this success to gain the momentum and define next step to scale up the transformation within different process and location in the business by using different technologies. With the progress of digital transformation, a strong collaboration will emerge between people, processes and products.
Final thoughts
When you onboard the digital journey, there will be no destination waiting for you. It’s a continuous process of transformation which will remain a critical part of business strategy to remain competitive and create a difference in the market.
Darshan Shah is working as a Digitalisation Consultant @ Industrial Steam Turbine Business, Siemens Ltd. Innovative Thinker, Digital Transformation creator with 9 years of experience, Darshan’s dream is to create digital culture around the globe. He is very passionate to solve real problems of VUCA world through his innovative ideas. He always believes in knowledge sharing with other through trainings, sessions, workshops or through social media. He is a strong digital influencer within and outside the organisation to overcome fixed mind-set by creating digital culture. Darshan is having a strong hold in research based upon advanced technologies and business alignment expectations of a variety of customers and proponents across the company. He develops, directs and delivers Digital Transformation (DT) roadmaps and strategies across a wide variety of business lines in both the local and global environment. He also takes a leading role in forming successful research partnerships with leading academic and industrial collaborators, as well as effectively leverages existing innovation ecosystems; enforces cross functional teamwork to overcome silo thinking leveraging internal and/or external networks and ecosystems; and drives innovation by showing resilience despite organisational barriers.