The rapid pace of technological change is radically altering the way manufacturers do business. Market conditions, customer expectations, and technology capabilities are transforming manufacturing processes at phenomenal speeds, with no slow-down in the near future. This is causing instigating smart manufacturers to take a complete 365-degree evaluation and modernisation of their plant operations, from the core IT infrastructure to solution integration, personnel roles, operational best practices, and deployment.
As businesses that strive to be on the front line of innovation, manufacturers must stop, look, listen and plan their strategy for being the Digital Enterprise of the future. Such a substantial shift doesn’t happen overnight, but Smart Factory concepts, the Internet of Things, Big Data, Mobility and Cloud deployment, will find the first levels of maturity in manufacturing. As a result, waiting is a high-risk decision. The question is how to map out such a large-scale transformation
Defining the disruption
How does someone identify and define a digital enterprise? How do you know if your company can claim the title of Smart Factory or Factory of the Future? These terms are largely interchangeable. They all refer to the interconnected, advanced IT solutions that allow manufacturers (and indeed any business) to use data to be highly strategic, proactive, customer-centric and profitable.
Typically, several interoperable solutions are involved, and they are often cloud-based. While many manufacturers have adopted next generation solutions and started to reap the benefits, many analysts believe this disruptive advancement in manufacturing is in its infancy. However, those same analysts agree the full scale disruption is coming; it is only a matter of timing and scope.
In a recently published paper, Deloitte commented: “In today’s highly connected world, digital strategy is business strategy. It’s developing new digital capabilities and integrating them across the organization to create an intuitive enterprise. A truly intuitive organization integrates digital initiatives enterprise-wide, regularly implements new and innovative technology, and uses digital capabilities to sense and shape markets.”
In Technology Vision 2015 Accenture consultants sum up the potential impact well when they describe the “digital fabric” as a force that: “has the potential to touch all aspects of their business, their customer relationships, and the world around them. Already, this fabric has provided enterprises with an ability to connect and scale up in unprecedented ways. Companies routinely deal with hundreds of business processes, thousands of employees, and millions of consumers. Many large companies are at a scale where they touch billions of lives.”
The report also cites a recent survey which examines how businesses, including manufacturers, view the impact. The report states that 81 percent of respondents agree: “in the future, industry boundaries will dramatically blur as platforms reshape industries into interconnected ecosystems. Huge efficiencies can and will be gained as businesses continue to master digital technologies internally.”
No matter which industry view you prefer, one element ties all of the definitions and views together: data. The growing influence of meaningful data is the driving force behind this disruption.
Moving towards the Digital Enterprise
Becoming a Digital Enterprise by 2020 requires advanced planning. It is no simple task, nor is there one “off-the-shelf” product in a box you can buy and install that will suddenly transform your organisation into a high performing Digital Enterprise. It is a process, one that often involves multiple phases, outside expertise, investments, and top-level commitment. And as with all substantial undertakings, if you don’t have C-level support and backing, which includes a budget, the plan is doomed to fail. Here are the common stepping stones to reaching the status of Digital Enterprise:
- Prioritize goals and set strategy
- Define success clearly from the outset – know what you want to achieve and why.
- Be specific with your objectives and measure progress toward them.
- Set realistic goals. Don’t exaggerate benefits or ignore challenges.
- Keep customer satisfaction at the core of your strategy.
- Prioritize those goals that achieve early wins in order to build support.
- Create the best teams in the best way
- Establish a cross-functional team with representative from every department involved.
- Make sure you have one definitive leader with decision-making capabilities.
- Clearly define roles of team members and expectations. Digital Transformation can’t be a low-priority project that gets intermittent commitment.
- Invest in team building and empowering internal personnel to conduct research and become experts of specific subjects or tasks.
- Break roles into manageable segments. Do not overload one team member or department.
- Involve skeptics as well as enthusiasts in your team structure. Differing perspectives will help bring a balanced view.
- Don’t reinvent the wheel. Turn to industry experts, consultant and product vendors to assist with highly specialized areas. Ask for case studies and references.
- Optimize market opportunities and keep a commercial perspective
- Develop an in-depth understanding of your target market, including buyer profiles, triggers, and the decision process.
- Explore new markets, regions, demographics, and vertical niches.
- Evaluate specializing on a vertical industry or niche market in order to focus resources.
- As you choose priorities, select initiatives that support your efforts to reinforce current market positions as well as capture new opportunities.
- Pursue most the opportunities where you can create product differentiation and offer unique value propositions.
- Implement, while controlling risk
- Successful companies often use a phased approach to deployment of major initiatives, such as becoming a Digital Enterprise. A phased implementation approach provides you with early wins and chances to refine your strategies over time.
- Start with foundational concepts then build from there.
- Get the basics right before you more on more advanced strategies.
- Start with technologies which will be used across multiple applications. For example Business Intelligence is used in nearly every application of a Digital Enterprise.
- Consider strong analytics and reporting tools as the prerequisites for moving on to more applications of data.
- Monitor for quality and security issues. As with any new initiative, integrity of data, quality, and security must be considered. Involve experts to minimize risk.
- Evolve by evaluating
Perfection is seldom achieved on the first attempt. Continuous improvement is an important concept that remains critical in manufacturing and wider businesses looking to move to becoming a Digital Enterprise.
- Evaluate progress at predetermined milestones, making course corrections as needed.
- Keep your organisation informed on progress. Celebrate achievement and accept suggestions for improvements.
- As move closer to your goal of a Digital Enterprise, you may want to set higher standards or goals for yourself. Don’t set the goals too low or let them become too low by remaining static. As your expertise moves up, so should your expectations.
- Measure new revenue or gains versus investment to calculate your return. Remember your ROI can be a less tangible characteristic, such as customer loyalty, recognized leadership, or positioning as the expert company in the field.
These five steps are merely highlights of a path to becoming a Digital Enterprise. Each industry will undoubtedly have variations and specific must-do steps which need to be introduced, such as any industry mandates, testing or compliance issues to manage. Each company will find its own cadence of “plan, research, enact, evaluate” that makes sense for their organization and stakeholder expectations. One size does not fit all, nor can a cookie cutter format for modernization be prescribed and expected to be followed precisely. The most important take-away is to get started on the journey because soon enough, every business will be digital.