There’s no beating around the bush; digital transformation (DX) is hard work. To be successful, organizations need to rally together around a plan – a plan that clearly connects DX to business value. A value-first digital transformation creates the foundation to success, and significant return-on-investment (ROI) for the business.
A digital transformation roadmap provides an outline – based on experience and research – to guide organizations and leadership in their pursuit of true digital transformation. Every organization is unique, so use your discretion in how to implement these best practices.
Before you set out on a road trip, you’ve got to figure out where you’re going. It’s the same for digital transformation.
At every organization, there are financial goals and these targets influence decisions at all levels, from executives down to the factory manager, engineer, and service technician. The primary factors impacting these financial goals are revenue targets, operating margins, and asset efficiency. Making progress in these areas moves the needle for an organization with investors and valuations. With these financial goals as a guiding light – a destination, one might say – organizations can work out the most effective way forward.
There are a host of value drivers for digital transformation – we outline the top ones across engineering, manufacturing, and service here – but some examples include:
With an idea of where you’re headed with digital transformation, and the value you want to bring to the organization, you’ve taken the first critical step to ensuring digital transformation success.
With a clear understanding of which digital transformation direction would bring the most value to the organization, the next step is to figure out the best way to get there. You want to avoid traffic delays, which slow down time to value, and dead ends, which prevent DX projects from scaling.
The strategic selection of use cases is where the rubber meets the road; picking the right projects will lead to transformational value and increase the overall success of DX.
A 2021 survey found a profound disparity between the DX programs that exceed expectations and those that fall short. On average, successful DX programs beat return-on-investment goals by 50%, while programs that miss ROI goals do so by 30%.
Identifying a few initiatives to start with is imperative. Research has shown that DX programs have an average of eight pilots, and three-out-of-four fail to scale. Starting small, but scaling quickly, is the key to achieving a fast time-to-value and ROI. (Find the most common DX use cases here.)
Choose digital technology that enables a high-degree of cross-functional integration, which can build a foundation for scalable digital transformation. The traditional industrial software stack is notoriously fragmented – often solving a single issue in the single place. Identifying areas where digital use cases – piloted and proven – can be rolled out to multiple sites is one of the fastest ways to achieve impact quickly.
On a road trip, we look to trusted advisors to help get us there faster and easier – friends who help navigate and apps that have the latest data. Organizations should seek out the same for their digital transformation efforts and find the right partners to support execution. These partners might deliver technology solutions, guide with their industry expertise, or both.
When considering vendors and technologies, the right fit is everything. (Nothing worse than having a dud sitting in the front seat on a long road trip!) Look for vendors that not only meet the needs of your company today, but are also aligned with your long-term digital transformation strategy – and can scale with your efforts.
For example, value can be quickly multiplied if you consider scale as part of the review. Manufacturers can often bring digital use cases to multiple factories or sites. In order to gain flexibility and agility – two necessities in today’s marketplace – companies should consider how the technology platforms are delivered – on-premises, hybrid, or cloud. The cloud’s scalable infrastructure, in combination with software-as-a-solution products, makes for a forward-looking choice, aligned with Industry 4.0 best practices.
You have a destination, you have directions, you have support, but have you prepared, mentally and physically, for the road trip? More than packing appropriately, bringing snacks, choosing a music catalog, it’s about cultivating the right mood – vibe, if you will – for all involved . This can make the drive much more enjoyable, and ultimately add to the success of the trip overall. It’s not just about the destination, it’s about the journey.
For digital transformation, nurturing a company culture that’s innovative, collaborative, and inclusive is imperative. Internal buy-in from all levels of the company is one of the keys to successful digital transformation, research shows.
Pursuing the cross-functional change that can achieve transformation impact requires both a top-down and bottom-up approach. Executives focus on strategy and ensure that DX efforts align with the long-term strategy of the organization. Departmental leaders and stakeholders provide visibility into operational benefits and identify the most valuable use cases.
Creating a digital transformation governance body is one way to ensure representation of each stakeholder group and offer a sense of ownership across functions. Striking the right balance between strategic focus and functional execution can propel digital transformation efforts past expectations. Our research shows that ROI is two to three times more likely to exceed expectations with this approach.
A road trip ends, but the memories of a great trip live on, and what worked well can be incorporated into the next one.
Digital transformation is a journey – it’s an iterative and progressive process focused on making the type of change necessary to lead in your industry, manage disruption, drive growth, and foster innovation.
As initiatives are executed, and benchmarks met, it’s vital to have a plan to bring successful initiatives and use cases to other factories or business units, as well as identify ways to continuously build on digital initiatives. Creating a playbook for each use case to help future implementations sidestep any roadblocks.
A digital transformation roadmap is your organization’s guide to value, impact, and scale. While we’ve outlined the best practices here, gained from years of experience in helping industrial companies reach transformational change, your organization needs to consider its unique needs, financial outlook, bottlenecks, and structure to design the best route to success.
Learn 3 tactics shown to boost DX results.