9+ Steps Digital Transformation Strategy
Published on : Sunday 04-07-2021
Recognising upfront the complexities involved will go a long way in ensuring project success, says Rajabahadur V Arcot.
Manufacturing companies are continually on the lookout to improve their business, production, and operational processes with the objective of maximising revenues and profits. They aim to achieve their objective by improving overall productivity and efficiency, maximising cost saving, enhancing customer experience, adapting to market dynamics, reducing plant downtime, and such others. In pursuit of their objectives, they have been automating some of the processes that they could by using operational technology (OT) systems such as PLC and DCS and information technology (IT) solutions, such as ERP and SCM. They also have been applying business process methodologies, such as TQM and Kaizen. These approaches did yield results. In the process, companies have realised two things; one, that information is an important asset much like the human, financial and such others; and two, that by using emerging industrial internet technologies, sometimes referred to digital technologies, they will be able to further automate various processes and improve their ability to capture information relating to their processes, contextualise, analyse and share the same among the stakeholders, and thereby enhance decision making and automating capabilities. These realisations propel them to seek further improvements through the use of emerging industrial internet technologies.
What is digital transformation?
Industrial internet technologies, such as the Industrial Internet of Things (IIoT), edge computing, cloud computing, big data and analytics, artificial intelligence (AI), and others are excellent tools for data mining. It is no wonder, therefore, to see more and more manufacturing companies take the path of digital transformation so as to leverage the power of these technologies. Digital transformation is the process of intentionally bringing about comprehensive changes, after due deliberation, by leveraging emerging digital technologies so as to achieve overarching objectives – which, in the business context, often includes improving a company’s business, production, and operational processes, enhancing customer and shareholder value, becoming more efficient and productive, and such others. Through such transformation, companies can overcome market challenges, ensure customer satisfaction, improve performance, and become future-ready. Manufacturing companies can greatly benefit by turning the power of digital technologies to their advantage.
Industrial internet technologies facilitate effective and efficient data collection and analysis. These technologies also help information to be shared among different applications, databases, OT systems, and IT solutions without having to adhere to the traditional hierarchical architecture for information flow. Manufacturing companies, by using industrial internet technologies can comprehensively and extensively marshal and analyse data/information and generate business intelligence and insights.
Often, a combination of industrial internet technologies is used for achieving the objectives of transformation. At the overarching level, a manufacturing firm adopts digital transformation methodology to effectively and comprehensively bring about the desired changes in their business and production processes and operations. It is not only a prerequisite for a company to transition from the third era to the fourth era of industrialisation but also to continue to remain successful.
What are the prerequisites for digital transformation?
The smooth launch of digital transformation initiatives depends on the availability of the company's data in digital form and company’s processes that are digitally managed. In other words data digitisation and process digitalisation are foundational to digital transformation. Digitisation is the conversion or the process of converting information in the form of an image, sound, document, etc., into a digital format that can be processed by a computer. One example of this is the conversion of input signals from transmitters to the DCS from analogue signals to digital signals by using communication protocols, such as Fieldbus; another example is the conversion of paper documents or pictures into PDF documents. Digitalisation refers to enabling or improving processes by leveraging digital technologies and digitised data. Given the above preconditions it is necessary for a company that wants to launch a digital transformation program to ensure that necessary data are in digital format and processes are digitally managed. In other words if the company wants to achieve digital transformation of plant floor operations then it must have in place OT systems such as DCS/PLC or if the company wants to achieve digital transformation of supply side processes then it must have in place IT solutions, such as SCP, SCM. Digitised data and digital technology managed processes are prerequisites to move forward with digital transformation programs.
9+ steps digital transformation strategy
A manufacturing company that wants to achieve digital transformation must clearly identify upfront the business objectives it wants to realise and lay out a broad plan to accomplish the same. Since there may be many objectives, it is good to develop a vision document that starts with a single well-defined goal. Ensuring cooperation and support of all stakeholders and availability of necessary resources and skill-set are essential for the success of digital transformation initiatives. If necessary, engage system integrators/consultants who have necessary skill resources and successful digital transformation project experience to work with the in-house project team.
The 9+ steps of the digital transformation strategy are establishing a collaborative and empowered team; developing the vision document; ensuring resource and skill availability; identification of business goals, setting DT objectives and prioritising them; develop implementation plan taking into account the priorities; initiating implementation of identified goal/goals; regular monitoring and evaluation of progress; if necessary initiate need-based corrective actions; celebrating success; and moving forward pursuing the next objective/s.
The vision document inspirationally describes the compelling idea for the digital transformation initiative and its objectives including benefits. The commitment of the team leading the digital transformer initiative and collaboration among the team members are extremely important for the initiative’s success; this must be taken into account while constituting it. Also, the team has to be broad-based so as to represent the viewpoints of the various business groups, empowered, and CEO led. The team members must have an open-minded attitude towards technology and change and be endowed with soft skills and effective communication abilities. Digital transformation involves the use of evolving industrial internet technologies for achieving business objectives. Industrial internet technologies are at the core of digital transformation which aims to improve processes relating business, production, and operational processes and enhance the capabilities of operational technology systems and information technology solutions. Therefore the skill set required to drive transformation is wide ranging and covers all the above mentioned technologies, processes, industrial software systems relating to OT and IT, and system engineering.
Most companies may have to complement their in-house resources for the project to succeed. The digital transformation team aided by the subject-matter experts will have to evaluate various desirable objectives and arrive at specific goals to be pursued to begin with. The specific goal/goals can be set either by studying and evaluating the many proven successful industrial applications, which can act as guideposts, or by identifying the company’s assets and processes whose improved performance can contribute to enhancing profitability and performance. After deciding on the specific goal/goals to be pursued it is necessary to develop the implementation plans/strategies. Implementation plan documents in detail the steps necessary to achieve the goal/goals. It also sets the timeline for completion of each step and the sequence of steps so that the project team stays on track and the project progress can be monitored and evaluated. It is necessary for the digital transformation team to regularly monitor and evaluate the implementation activities and progress. This helps in identifying bottlenecks and hurdles which can be further studied and analysed to initiate need-based corrective actions so that implementation-process progresses and project goals and objectives are achieved. It is the time to celebrate when the set goal is achieved and it is important. Celebrating success inspires and motivates the team members and establishes strong bonds among them; imbibes enthusiasm and success mind-set in the team; develops confidence to set new goals, pursue them with confidence, and succeed in accomplishing them. Digital transformation involves successfully pursuing a series of developmental and improvement goals and achieving them.
To ensure the success of the digital transformation initiative, a company that wants to undergo digital transformation should be willing to learn about the complexities of digital transformation from the experiences of other companies which have attempted it. There are also numerous published reports about the complexities involved in successful implementation of digital transformation. It involves bringing into play external intelligence and its acceptance calls for mind-set changes. Such changes do not come about easily and the digital team has to be cognisant about this unique nature of the digital transformation efforts. Recognising upfront the complexities involved will go a long way in ensuring project success. Adopting the agile methodology is a good approach to implement digital transformation. The core tenet of agile methodology is to manage a project by segmenting it into a series of steps. It involves constant collaboration with stakeholders and continuous improvement at every stage. The focus is on the ultimate objective and cross-functional team collaboration – always prioritising test-and-learn methods over rigid adherence to the laid-out plan. Continuous collaboration is vital among all stakeholders.
Rajabahadur V Arcot, an Independent Industry Analyst/Columnist and Business Consultant, is Life Member of ISA and Member of ISA Smart Manufacturing & IIoT Division, an ISA accredited mentor and trainer. He writes industry and technology trend articles, market research reports, case studies, white papers, and automation & operational technology insights. He may be reached by email: firstname.lastname@example.org