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Stop Sabotaging Digital Transformation. Your Future Success May Depend On It!

July 9, 2020
Study shows internal actions, not technology inadequacies, stand in the way of manufacturing reaping digitalization rewards.

Manufacturers have reached a bit of a breaking point. What has been the norm for many years is not going to work moving forward. Businesses need to find better ways to operate – capitalizing on what technology and access to data can offer.

Is the fact that manufacturers need to adjust to the new normal a direct result of COVID-19? Absolutely. However, the need to better utilize digital technologies has been lurking in the wings for some time now.

According to Accenture Industry X.0’s Global Lead Nigel Stacey, as manufacturers navigate today’s lingering uncertainty, there's never a better time to collaborate and drive digital transformation. However, collaboration has been illusive as manufacturers have pursued digitalization initiatives. According to the results of a recent Accenture report, Together Makes Better, 75 percent of executives say their departments compete rather than collaborate on digitization. Unfortunately, competition has negative consequences including missing opportunities for growth and greater performance.

As the stats show, embracing competition rather than collaboration has resulted in:

  • Increased costs by almost 6 percent; 
  • Realizing a 6 percent boost in revenues vs. an anticipated 11.3 percent; and 
  • A whopping 64% failing to see any revenue growth as a result of their investments.

As bad as the pandemic has been, it is creating a watershed moment where companies are strategically looking at where they stand, explains Stacey. “Do I need to accelerate? Do I need to move forward with perhaps things that I was thinking about doing six months ago? Three months ago? Do I need to bring those forward?” he says. “Whenever companies go through that thought process, if it results in the answer being yes, it’s a positive because it's positive for the company, employees, shareholders and society at large.”

Stop competing and start collaborating

What’s it going to take for manufacturers to get on the right path to actually collaborate? Stacey offers a few recommendations:

Establish a Clear Vision. The first thing that companies need to do – and it needs to come from the top – is establish a vision for digital transformation, with a clearly articulated strategy aligned across all functions. It needs to inspire every function, leader and C-suite executive in a way they can understand the role they play in achieving success.

Set and Communicate Expectations. The second critical thing is setting an expectation around behavior, including the leader’s ability to role model those behaviors, and not just for a day or two. “It takes a very specific type of leader,” he says. “You've got the energy and the drive to make sure that you push the company forward with the staying power and inspiration to get keep people onboard. Clearly assigning a single point of contact for senior leader who has all of those traits and can bring organizations together while also putting the difficult conversations on the table. Having this leader is key to breaking down silos and barriers to collaborate and derive a sense of purpose, community and longing is vital.”

Embrace a Structure. As with any wide sweeping initiative, digital transformation needs a governance structure including reward mechanisms to support the vision and strategy. “If you don't support the behaviors you expect to see, things can start to break down,” he says. “Getting the governance model right across the functions and making sure that everybody aligned around how the company measures performance and success is crucial.”

The entire process needs to occur with cross functional teams in mind, explains Stacy. “We live in a more complex world, and digital is all about complex ecosystems,” he says. “Positioning ecosystem partners as true partners and true collaborators at the heart of what you're doing is going to be a very important step.”

Learn from leaders

As the Accenture report demonstrates, not everyone has struggled. When delving into what leading organizations have accomplished, it’s clear they are benefiting from the ongoing maturation of the latest technologies, whether it's digital twins or threads, AR/VR, applied intelligence and machine learning.

“It's all about driving intelligence across the entire value chain and functions. This is now enabling a level of intelligence and insight that that even 12 months ago wasn't there,” says Stacey. “That intelligence and insight drives the ability for industries and companies to actually accelerate the transformation programs and accelerate the return on investments.”

Collaboratively realizing results should not as difficult as people think. “It needs some top down clarity around the vision and the strategy, the right leaders with staying power, and the real ability to inspire and bring people together,” he says. “If you do those steps, not only will companies transform much faster, they will achieve the kind of returns the research highlighted.”

“Decades ago, we talked about how industries need champions. And it's almost this call to arms that industry needs you. Of course, the reason we need champions is because they are a beacon that others potentially look towards and follow,” he says. “The growth that the champions enjoyed is a very clear indicator that they are doing something right. It's not just about launching a transformation program that might be 6, 12 or 24 months. They're thinking about the continuous innovation cycle and the innovation loop required to sustain the expected competitive advantage or return on investment. These are manufacturers who recognize the need to speed up the process of innovation.”

About the Author

Peter Fretty | Technology Editor

As a highly experienced journalist, Peter Fretty regularly covers advances in manufacturing, information technology, and software. He has written thousands of feature articles, cover stories, and white papers for an assortment of trade journals, business publications, and consumer magazines.

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