Now a primary focus for industrial organizations, digital transformation is already being used in 45 percent of companies and another 23 percent are expecting to kick off programs within one year. Not every company is getting it off the ground, but when they do, some interesting things happen—mostly around insights and gains that weren’t expected.
A few companies make it look easy, but when we look behind the scenes, there’s actually a lot going on to drive success. Through an LNS Research survey of the market and interviews with industrial executives, the leaders of digital transformation revealed five fundamental best practices that signal success. If your company wants to be a digital transformation leader, it must nail these five things:
- Engage top down and bottom up. Where digital transformation is concerned, executive support is critical but not enough. Programs must engage early and often with operations personnel for success.
- Focus on business, not technology. Transformation does not come from technology, but rather from process changes empowered by collaborative technologies. Understanding the power of technology to enable change is essential but cannot be the organizing principle of the digital transformation program.
- Know that it’s more than just IIoT. When looking at technology, watch with a wide-angle lens. Despite the hype, digital transformation is not being driven by the Industrial Internet of Things (IIoT) alone. Leaders are looking at many technologies, including bleeding-edge technologies and more mundane systems to fill in their system gaps and to rearchitect their business processes.
- Build on solid systems foundation. Leaders are building on a strong operational technology (OT) and IT foundation with best-in-class systems deployed widely. A strong IT and OT foundation might be the most crucial transformational opportunity.
- Use the power of more. The most powerful trend revealed by our study is that digital transformation leaders are doing more across any number of dimensions. They have a larger functional scope, broader focus, and more breadth on their teams. There’s also a focus on suppliers and customers, not just employees. They are deploying significantly more technologies and generally more IIoT technologies. They are jointly funding more initiatives—where corporate provides some funding, but plants also have a personal investment.
These five practices demonstrate true commitment to achieving step-change improvements, and each requires a commitment to engage broad and deep, and to endure the change. Ultimately, only corporations that go all in have any hope of becoming leaders.
ABB manufacturing: A shining example
We recently spoke with automation and robotics supplier ABB about its own digital transformation journey. Guido Jouret, chief digital officer (CDO), reinforced our findings when he discussed the company’s Digital First initiative with us. ABB has promoted its public effort to reorient the entire company into a Digital First organization and to make digital a fundamental aspect of the business, not just a feature of the firm’s offerings, he explained. The transformation program at ABB mirrors every one of the five best practices. Unlike most CDOs, however, Jouret controls the digital transformation budget for his company. This allows him to contribute to the reviews of leading actors across the organization.
Another high-impact habit that Jouret adopted is providing regular updates on the “shining examples” of successes within ABB to motivate the rest of the organization. He focuses on the groups that want most to engage in digitalization and seeks to ensure their success. In that way, the program has faced little resistance and has consistently delivered early wins. He also actively promotes these shining examples to encourage other business groups to follow.
If you’d like to read the full case study, we invite you to visit LNS Research and request a copy of the report.
>>Tom Comstock is a principal analyst with LNS Research, conducting research on a broad range of topics ranging from transformation readiness to IIoT.
