In the first part of this blog, I touched on some challenges that companies face when it comes to digitalization as well as provided some general observations about how to address these topics. I also promised that this blog would focus on the four-step approach that can help you break down that lofty, “pie-in-the-sky” digitalization vision into much more tangible steps. The very first thing is to consider why digitalization and the use of new technologies is even being considered.
Why are we doing this?
Before looking at any specific project or technology, it is important to first gain a basic understanding of where your company is when it comes to digitalization. Some of the things that you want to discuss internally include:
- What are the business drivers and motivations behind initiating a digital transformation journey?
- Why are we pursuing digitalization, and what is it that we believe it can help us achieve?
- What are our digitalization goals?
The goal of step one is to get an in-depth understanding of why digitalization is being looked at across the business so make sure to include all relevant stakeholders in this highly relevant discussion.
How ready are we for it?
The next step is all about assessing the digitalization readiness of the company. In other words, is there something ongoing that may be considered digitalization? Or, was something implemented in the past? Such an assessment should cover a wide range of areas including:
- What equipment do we have available that can transmit data to the cloud?
- How automated are our plants and processes?
- How well integrated (or not) are our information and operational technologies, and how does information flow across these systems.
- What networks and connectivity options are available to share insight based on the data?
If you have more than one facility, make sure to assess every single one of them. The goal is to identify a pilot location and evaluate potential easy-to-tackle improvement projects that address any apparent gaps using new technologies.
How strong is the return on investment?
With this information at hand, you have completed some of the key components of a step-by-step operational digitalization strategy. The aim in step three is to create a digital road map that should include answers to the following questions:
- Which digitalization projects should we tackle first and why?
- Which technologies could be employed to address the challenges and what skills do we need to roll them out efficiently?
- What is the required investment in each of them?
After having done this, you should know what your priorities are going to be within the next, say, three years, how much it is going to cost, which specific projects will provide the fastest ROI. And that leads to the fourth and final step.
How is implementation digitalization different than implementing any other strategy?
The fourth, and final, stage is implementation. Implementation is pretty much the most straight-forward step as it is very similar to any other strategy implementation. I would like to highlight two important differences, though, and that is the people aspect and the importance of executive management support.
Since new technologies typically, and most commonly, affect what people do, and why and how they do it, it is extra critical to have a change management plan in place. People need to feel comfortable that they will be involved in every step of the way and that their inputs count and are valued. After all, people are typically the ones directly affected by the introduction of any new technology, so make sure they’re onboard.
Due to the impact that digitalization is going to have on a company, executive management sponsorship and involvement is most definitely required. Although embarking on a digitalization journey does not necessarily require ripping and replacing all of your industrial process equipment, significant investment is necessary over time to make the most of it. And that funding will probably come from a mix of capital and operation expenses so make sure get the executive buy-in right off the bat.
So, what’s next?
Now, there is, of course, a lot more that goes into putting a digitalization strategy together than I was able to cover here, but this blog should give you a good starting point. If you’d like to talk to us about digitalization in more detail, feel free to reach out to me or find more information here: https://new.siemens.com/global/en/company/topic-areas/digital-plant/digitalization-consulting.html