Why Only 1% of Digital Transformation Efforts Exceed Expectations
This article was first published on SmarterChains’ blog.
According to World Economic Forum, “over $1.2 trillion will be spent by companies worldwide on their digital transformation efforts and yet analysis suggests that only 1% of these efforts will actually achieve or exceed their expectations”.
Despite the initial digitization hype, most manufacturing executives hesitate to adopt a digital transformation roadmap, and only a few companies have managed to leverage Industry 4.0 technologies and know-how successfully.
Based on SmarterChains’ research, the key obstacle that blocks companies from achieving end-to-end plant digitization is a costly and time-consuming knowledge transfer process. As Gustavo Lopez Ghory, SmarterChains Chairman and Former Vice President Global Manufacturing P&G, explains:
1. “There’s just too much advice, and too much information to orient yourself properly.
2. Taking pause is not a luxury the competition affords you.
3. This dual pressure leads to sub-optimal decisions.”
If you simplify the problem to its core, there’s no efficient way to get the right information to the right people fast. Specifically:
Industry 4.0 transformation projects drain resources. Assessing the plant, analyzing the findings, and planning the digital roadmap are all attached to a huge resource investment, walled behind many months of disrupted plant productivity. Even worse, as information sharing is limited within the sector, and knowledge is siloed within organizations, such processes rarely produce meaningful insights.
Optimized industry 4.0 roadmap design is almost impossible. Vendors are fragmented, innovation is decentralized, and new technologies are endless. Merely mapping all immediately available technology solutions is a painstaking process, as providers tend to use different terminologies for their products, which often obscures profitable opportunities. Therefore, the final roadmap design is limited by the necessity to your or your consulting firm’s personal knowledge and network.
There is rampant internal bureaucracy and inertia. Internal teams are rarely fully committed and there’s a significant lack of alignment among different departments. Even meaningful transformation efforts are usually hindered by extremely complex, multi-layered processes that leave little room for improvement.
Taking the factors above into account, it’s no wonder why many manufacturing companies struggle to adapt and execute an optimized Industry 4.0 roadmap that works.
Conventional Wisdom Has Disappointed the Manufacturing World
According to conventional industry wisdom, achieving true digital success boils down to a simple, clear-cut progression of steps. For example:
- Map out your Industry 4.0 strategy, setting clear targets for the next 5-years.
- Start small. Plan, test, and assess pilot projects to demonstrate and verify business value.
- Specify what you need to achieve your long-term goals (infrastructure, human resources, budget etc.).
- Master data analytics, build cross-functional teams and link decision-making to intelligent systems design.
- Foster a top-down and bottom-up digital culture, that nurtures experimentation and innovative thinking.
- Navigate the landscape using an ecosystem approach, establishing partnerships and alignment with other companies.
Unfortunately, as straightforward as these steps read, experience, research and a multitude of surveys have shown that they’re not easy for manufacturing companies to follow through — especially when you factor in all key stakeholders. How else to explain the demoralizing World Economic Forum insight report?
And if conventional wisdom has not been enough to support the manufacturing sector, could this mean it is time for a paradigm shift?
Breaking the Silos of the Manufacturing World
Just like supply chains have ceased to be linear, with data flowing back and forth in a circular fashion, so must the manufacturing sector evolve into a new model that’s faster, smarter, and inter-connected.
This is why SmarterChains’ software platform was created.
In SmarterChains’ paradigm-shifting ecosystem model, knowledge transfer and capability-building acceleration is not a goal, but a feature. Continuous connectivity with inter-connected partners and the latest industry advancements is not a goal, but a fact. Kickstarting Industry 4.0 transformation and receiving a fully optimized digital transformation roadmap is only a matter of two hours!
Do you represent a manufacturing company? Find out how we can help you kickstart your Factory of the Future transformation here.
Are you a technology vendor, or a technology integrator? You’ll be very interested to join our marketplace.
Interested in an ad-hoc partnership? Contact us here directly.