Resources to Scale Digital Transformation in 2020 and Beyond

Written By: David Immerman
  • 10/5/2020
  • Read Time : 2 min
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Digital Transformation (DX) and Industry 4.0 initiatives often struggle to escape pilot purgatory or expand beyond single site implementations. Manufacturers on average start with eight digital projects and three out of four of them fail to scale. This emerging pain point of ‘scale purgatory’ coupled with existing pilot purgatory issues presents industrial organizations with unique challenges and barriers to recognizing enterprise-wide digital transformation.

We’ve aggregated leading perspectives on this increasingly prevalent challenge along with strategic frameworks designed to help industrial companies scale at any point in their digital journey.

Our Industry Hotlist monthly newsletter recently highlighted curated articles and reports we’ve listed below.

  • Overcoming Pilot Purgatory

Escaping Pilot Purgatory in Digital Manufacturing

Every company is it at different point in their digital transformation journey and will have specific guidance that’s more pertinent to them. Some are still in their very early stages of DX and might be faltering under the pretense of ‘pilot purgatory’. Overcoming this inhibitor will always be a prerequisite to scaling DX programs.

In this McKinsey report over 90% of manufacturers cite that they are either on the same level or ahead of their peers in digital manufacturing. However, many still stuck in pilot purgatory are not at a point where there is enough internal momentum to rapidly scale digital projects. The three over-arching strategic themes key to escaping pilot purgatory: strategize the process, innovate the infrastructure, and mobilize the organization. McKinsey analyzes an array of additional characteristics of pilot purgatory as well as those who’ve made it to the roll-out or ‘scale’ phase.

Put the Right People in the Best Place to Succeed

Digital Transformation doesn’t require a massive re-organization of a company’s structure. But companies should make sure they empower their people to achieve DX success now and for the future.

Around one-fifth of organizations have a ‘Chief Digital Officer’ or an executive with a similar title who they’ve tasked to lead their digital transformation (DX) initiative. While leadership is critical to building digital transformation teams, industrial companies often require tight coordination with operations-oriented staff, yet only 9% of companies include Plant Managers on their teams. The convergence of Information and operational technology (IT & OT) teams is a key tenet of successful industrial transformation; organizations including operations as part of their DX team are five times more likely to have a fully implemented program rather than be stuck in pilots or proof of concept phases.

  • Scaling DX: The Next Frontier

A Practical Guide to Scale Industry 4.0

Early stage Industry 4.0 programs often succumb to ‘pilot purgatory’ when not taking a financial-impact first, value framework approach. However, many organizations that have moved past pilot stages and into production now face a novel growth-limiting phenomenon called ‘scale purgatory’. This occurs when inaugural digital programs stagnate and attempts to scale use cases to multiple sites fail, resulting in diminished value capture and impact across the enterprise. This guide provides five actionable steps to overcome this:

  • Plan value to align business strategy
  • Program Design to get organization, people, processes, and technologies orchestrated
  • Prove Value to illustrate real-world impact
  • Scale Value to create transformative waves
  • Program Governance to ensure ongoing and future success

Additional real-world examples including Carlsberg, Pfizer, and Pactiv provide a frame of basis to successfully scale your Industry 4.0 use cases across dozens of sites and unlock compounding value in 24-36 months.

The Next-Generation Operating Model

The inclusion of digital technologies is changing day-to-day operations, but some organizations are further along and reaping the benefits. McKinsey’s analysis reveals the top quintile of digital performers capture more than 90 percent of economic profits. The next-generation operating model suggests organizations design a transformation roadmap that rejuvenates their customer journeys and orchestrates a cross-functional team to scale and sustain these digital benefits. This report delves into these pillars of transformation to achieve higher levels of agility and efficiencies to capture greater economic profits and move into the top quintile of digital performers.

Scaling Value with 5 Industry 4.0 Scaling Steps

Defining the five steps of Industry 4.0 provides organization with a foundational base of knowledge but can still lead to speculation as to what these steps look like in action. PTC has applied this framework to a hypothetical $5 billion discrete manufacturer case study (ACME Enterprises) to demonstrate the transformative impact of the five-step approach. Detailed analysis and illustrations lay- out how CxOs can directly impact corporate financial and operational drivers such as generating production efficiencies. Find out how ACME navigates the immense areas of digital opportunities and generates $180 million in operational cost savings across its enterprise in this article.

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Tags:
  • Digital Transformation

About the Author

David Immerman

David Immerman is a Senior Research Analyst on PTC's Corporate Marketing team providing thought leadership on technologies, trends, markets, and more. Previously David was an industry analyst in 451 Research’s Internet of Things channel primarily covering the smart transportation space and automotive technology markets, including fleet telematics, connected cars, and autonomous vehicles. He also spent time researching IoT-enabling technologies and other industry verticals including industrial. Prior to 451 Research, David conducted market research at IDC.