Overview
Industrial innovation is accelerating. Leading companies have their transformation initiatives well underway, with digital champions leading designated teams that focus on resilience, disruptive technologies, remote work, autonomous operation, sustainability, the circular economy, climate change and other critical business-level objectives. We all hear anecdotes about companies that have had success with machine learning, augmented reality, robotics, additive manufacturing, data management, autonomous operations, cloud and edge, IoT or other core transformational technologies, but who are the real leaders in digital transformation? What makes them so?
Digital transformation
Leading companies take a strategic approach, integrating digital technology throughout their value chains. Design and engineering, production operations, maintenance, logistics, supply chain, business systems, customers, products and organizational structure are subject to innovative change as processes are examined and updated and new tools and technologies are deployed.
The core business model by which a company produces and/or offers services to the marketplace can be replaced by new business models that leverage cognitive analytics, digital twins, predictive technologies, or other technologies that enable the company to expand their worldview, embrace competitive excellence as a goal, and thereby move beyond production efficiency to a much more dynamic, responsive and resilient business model. To be sure, digitalization in production, whether known as Industry 4.0 or Smart Manufacturing, plays a crucial role in opening new opportunities for highly flexible, fast, and high-quality production systems. Such systems can fulfill orders to individual customer requirements.
Top companies know that "digital" can’t be bolted on–they must intimately weave digital together with their internal and external processes. Traditional organizational silos must be broken down, multi-functional teams must innovate around customers, processes, and employees, and workforce hesitancy must be addressed head-on and overcome. Bold digital strategies may fuel a company’s growth as well. Today, some companies are ‘born digital’ and may grow rapidly to overtake existing competitors.
These companies are not encumbered by legacy systems, of course, but more importantly, they are unencumbered by legacy thinking and the need to overcome resistance to ‘the way we’ve always done it.” They can build systems and processes better from the start, and not plan for incremental improvements to eventually achieve top performance. In one form or another, software is key to digital transformation. For industrial companies, there is a correlation between investment in software and transformational technologies and corporate valuation. Software powers digital transformation, necessity drives innovation, and the whole cycle is accelerating year after year.
Many leading companies have been at it for some time, but the best understand that the successful, ongoing transformation relies not only on getting the technology right, but also on empowering the right people to guide, interpret and leverage the technology. The workplace, work methods, and workforce may all need to change, but done well, this can become a powerful source of competitive advantage. Another massive driver for digital transformation is the pressure companies feel to become more sustainable and significantly change their operations in response to increased pressure from citizens, stakeholders, and governments to address climate, environmental, and circular economy concerns.
In fact, these same digital technologies, such as artificial intelligence, are also being used by shareholders to increase pressure on boardrooms and leadership to quantify sustainability progress. Leading companies recognize that they can’t make these changes quickly and effectively–or maybe at all–without substantial digital transformation.
The Top 25 Industrial Companies
ARC Advisory Group has been conducting research designed to identify the global industrial digital transformation leaders. For this research, digital transformation was defined as: “The integration of digital technology into all areas of business, fundamentally changing the way companies operate and deliver value to customers. The organization is typically charged to innovate and improve across multiple dimensions such as: digital/disruptive technologies, culture and leadership, operational agility, workforce engagement, customer experience, environmental, social and governance, and competitive performance.”
It’s not straightforward to identify leaders in such a complex space, but ARC developed a rigorous process based on financial performance, a community intelligence based ranking system, and software and sustainability data. Publicly available financial information, ARC primary and secondary research, data from ARC’s market database, and the opinions of members of ARC’s community of end users were all factored into the determination of the Top 25 Industrial Companies in Digital Transformation. The result is an analysis and listing of the Top 25 companies together with their scores in various categories, profiles of each of the leading companies, details about the research methodology, and more.
The Top 25 List and report will be released in January. Look for more details and a summary of the report in the next InTech Magazine and at the upcoming 26 th Annual ARC Industry Forum, held Feb. 14-17, 2022, in Orlando Florida. Think your company is doing digital transformation well? ARC would love to hear about it! For further information or to provide feedback on this Insight, please contact your account manager or the author at [email protected] .
ARC Insights are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part may be reproduced without prior permission from ARC.
