How to succeed with digital transformation – for Industry 4.0.
Eight in ten organizations engaged in digital transformation projects between 2013 and 2018 – only one-third succeeded in improving performance and sustaining those gains
– McKinsey & Company
To achieve significant productivity gains, Industry 4.0 demands the effective deployment of technologies like Industrial Internet of Things (IIoT), advanced robotics and additive manufacturing. This represents digital transformation. Therefore, it should come as no surprise that 94% of manufacturing executives listed digital transformation as their top strategic priority in Deloitte’s survey “The Industry 4.0 paradox”.
However, McKinsey & Company found that less than 30% of digital transformation projects succeed. Have you stopped to consider why that is the case? One typical problem is that organizations rush forward on their digital transformation journey without first having the right foundation in place to support the transformation. By putting such a solid digital foundation in place, you’ll be poised to advance boldly and methodically forward on your journey toward all the benefits of Industry 4.0.
How to start digitally transforming in manufacturing
Digital transformation is about using digital capabilities to transform the way you do business. In an industry such as manufacturing, digital transformation could be used to support business and IT integration by bringing together data and processes from a wide variety of different devices and applications. Think of digital transformation like an ongoing journey. You need to master three types of activities to get started on this journey:
- 1. Establishing a digital foundation – unlock the true power of the cloud beyond lift and shift.
- 2. Exploring digital possibilities – leverage the minimum viable product (MVP) model, prototyping and design thinking.
- 3. Accelerating digital initiatives – employ DevOps, automation and agile methods.
Industry 4.0 is in a state of constant change so you will need to keep digitally transforming and apply engage in these activities iteratively.
How to make sure your transformation adds value
Throughout your digital transformation journey, you should ensure your initiatives are on track to add tangible value for both your business and its customers by setting clear goals. Align these goals and measure your progress using the three building blocks of digital transformation:
- 1. Customer experience – How well you understand customer needs and streamline customer-facing processes and touchpoints.
- 2. Operational process – How well you digitalize processes, drive performance improvements in internal operations and empower workers.
- 3. Business models – How well you adopt agile ways of working to optimize products and services and to accelerate innovation
The customer experience is considered a key competitive differentiator by 86% of global manufacturing leaders surveyed by Salesforce.
It’s important to be clear about what you can achieve with your digital transformation. For example, if you aim to make more Industrial IoT data available, what will you do with it? Will you improve operational processes like predictive maintenance? Will you use insights to optimize ways of working? Will you streamline customer-facing processes?
Laying a foundation by going beyond lift and shift
Regardless what you want to achieve with your digital transformation, digital foundation will be a key success factor. This is especially true for manufacturing companies that have a wide range of devices, applications and data that are difficult to identify, interconnect and make better use of. This requires a highly flexible, scalable and agile foundation powered by the cloud.
However, many organizations don’t think far enough when looking to the cloud, stopping at Infrastructure as a Service (IaaS). IaaS involves simply lifting and shifting data from on-premise storage to cloud-based storage such as Azure and migrating legacy applications to virtual machines. This delivers benefits such as improved scalability, availability and freedom from capital expenditures. However, you can only unlock the full potential of the cloud by looking beyond lifting and shifting disparate pieces of a puzzle to the cloud and completing the big picture with a fully consolidated platform and cloud-first applications. Build that consolidated platform with Platform as a Service (PaaS) and unleash the full mobility and scalability of applications with Software as a Service (SaaS).
Be strategic – enable digital growth
Cloud migration is not only about infrastructure. It is a strategic business decision that enables digital growth.
By looking beyond the traditional lift and shift scenario, you can use the cloud strategically to enable digital growth. This will give you the power, speed, flexibility, and agility to make the most of cutting-edge Industry 4.0 technologies and new digital possibilities. You’ll also have the tools to drive and accelerate your digital transformation initiatives to add significant value. With PaaS powering your foundation, you’ll be poised to leave competitors in the dust and come out of Industry 4.0 on top.