Competition among manufacturers is at an all-time high due to the increasing ease of cross-border trading, combined with customers demanding more options, cheaper, and faster. And if these challenges are not enough, organizations must also adapt to new conditions imposed by the pandemic, such as distributed workforces and less-financially-secure customers who are more hesitant to spend money.
Consequently, more organizations are turning to digital transformation to easily pivot, adapt, and continue growing in the face of rising competition and change. Without a digital strategy — which could be as big as completely automating your assembly line or as small as upgrading your mechanical punch-in clock to a digital timekeeping system — making changes within your organization is bound to take longer, require more resources, and cost you more money.
With this in mind, I’d like to share a framework that explains the four key elements behind any successful digital transformation initiative.
A Step-by-Step Guide to Going Digital
- Establish a framework for project governance
Before you can begin to make decisions about your transformation, you first have to create a management framework that controls how decisions are made. An effective framework consists of the following:
- Stakeholder engagement: Employees don’t like being pulled out of their normal work without context. This is especially true if no training or recommended learning is provided to employees to help them effectively manage through all the change. Long before your digital transformation begins, it is critical to communicate the “why” to all stakeholders to ensure buy-in and keep communicating throughout the project.
- Risk management: Some issues are code red and require immediate action — and some aren’t. Understanding how to track, manage and prioritize issues you experience throughout your transformation can help ensure that crippling issues are promptly dealt with and that less serious issues are tabled so they don’t consume more than their share of time and resources. Careful planning also helps ensure that risks are averted in the first place.
- Establishing project controls: As the old adage goes, “what can’t be measured cannot be improved.” Whether it’s profitability, efficiency, productivity, production agility, or any other KPIs relevant to your organization, you’re going to need project controls or processes for gathering and analyzing data if you’re going to monitor their progress and ensure that your transformation remains on track.
- Create a high-performance implementation team
Did you know that 26% of organizations state a “lack of leadership or vision by senior management” as their top barrier to successfully implementing new digital initiatives? Therefore, it’s necessary to establish proper leadership to guide and support the implementation.
Your first step should be creating a steering committee for policy and strategy. Below this, you should also create project management and solutions architecture teams to monitor execution, as well as a core team responsible for mapping, testing, documentation, and training.
For all teams, KPIs should be defined, roles and expectations understood, and relevant training provided (skill gap analyses can help identify the kinds of training required). KPIs help teams to unify their actions around goals. A proper understanding of roles and expectations creates accountability and allows for clearer standard operating procedures (i.e. who does what) and relevant training reduces the chances of exposure to unfamiliar situations — and the heightened risk of error.
- Map your processes
Taking the time to map your processes and finding out how information flows within your organization before embarking on any digital initiative is extremely important.
For starters, you should be able to answer the following two questions:
- How does one department interact with another department?
- What triggers lead to what kind of actions?
The answers to these types of questions will help you develop a map of how information flows through your organization, which ought to tell you where communication is good and, more importantly, where it needs to be improved. For example, you may find that a significant gap exists between your organization’s engineering and production teams, resulting in misunderstandings, delays, and errors.
Knowing where the gaps exist can help you better plan your digital transformation to bridge these gaps, improve communication, and ultimately help you in mapping out your future business processes.
- Manage data migration
Along with poor training and testing, poor data migration is one of the biggest reasons why digital transformation projects fail. For a successful, on-time data migration free of surprise inaccuracies and inconsistencies, start early and include the following:
- Data cleansing: If your data isn’t accurate, nothing else matters. Data cleansing is your first step in the data migration process and should consist of fixing inaccuracies, inconsistencies, redundancies, and any other errors. The cleansing process itself can be performed in your legacy IT or ERP system, in an intermediate format like Excel, and/or in the new IT or ERP application.
- Static data migration: Because static data doesn’t change, you can migrate it early on, leaving more time to handle the more complex task of migrating dynamic data.
- Dynamic data migration: Dynamic data, which is data that constantly changes, such as transactions, should be migrated last to make sure that data fed into your new digital system is as current as possible.
Making Your Digital Transformation a Success
Heightened competition in a post-pandemic world has put the squeeze on organizations — manufacturers, in particular — to become as lean as possible, leading many to turn to digital transformation. Fortunately, while it may not be an easy road, with the right guidance and dedication, any organization can successfully make the transition to Industry 4.0.