Accelerating Digital Maturity with S.I.R.I. Assessments

Summary

In a time defined by the Fourth Industrial Revolution (Industry 4.0), a period transforming industries through advanced technologies, the manufacturing landscape is evolving beyond something we recognize as familiar. With the potential to automate processes, enhance data visibility, optimize operations and redefine value chains, technology is revolutionizing industries globally.

However, many organizations grapple with a critical question: “How can they assess their digital transformation (DX) readiness for this important paradigm shift?”

The shift is distinguishable if you consider a comprehensive DX—rather than just the act of digitizing processes—in which case it becomes a viable strategic advantage. Armstrong’s CIO, Dawn Kerchner-King, was able to streamline business operations and divert the savings to transformative technologies including cybersecurity and data analytics. And the Capital One CIO, Rob Alexander, helped champion the company’s apps to support Apple’s Touch ID biometric software.

This article dissects the Smart Industry Readiness Index (S.I.R.I.) framework and how it can help companies navigate DX challenges—especially if they are seeking to thrive and adapt to new market pivots.
 

On the precipice of change

Picture for a moment a base chemical company with 2,500 or more employees, perhaps a producer of methane or ammonia on the precipice of significant change. It is grappling with outdated processes and a rapidly evolving industry that demands they develop sustainable processes, reduce waste and minimize environmental impact. The organization knows that DX can help ensure it meets business objectives; but it doesn’t know where to start.

The key is starting by mapping the organization’s key business objectives, linking those objectives with their current states of play and drawing out a roadmap to ensure the organization has a blueprint to produce the outcomes it needs. DX need not always be just a technological solution. It can encompass a few organizational changes or some modifications to the existing protocols and processes. However, a holistic approach is the key to a truly successful transformation.

Digital maturity refers to the capability and readiness to effectively leverage and use digital technologies to drive business growth, innovation and efficiency. The Yokogawa Digital Maturity Assessment is powered by S.I.R.I, which was developed by the Singapore Economic Development Board (EDB) and adopted by the World Economic Forum (WEF). S.I.R.I. helps break down the current maturity level into 16 dimensions that revolve around three foundational pillars: process, technology and organization, thus, the S.I.R.I assessment offers an in-depth understanding of the company’s current state. It provides clear insights to identify areas requiring improvement and paves the way toward stepping up an organization’s digital maturity level.

By introducing digital assets and capabilities within an organization, organizations increase the likelihood of significant positive business impacts. These assets and capabilities are grounded in six fundamental principles of digital transformation and Industry 4.0:

1. Interoperability: The capability of systems and devices to interact and communicate with each other.
2. Virtualization: The utilization of computer systems to replicate real-world processes.
3. Decentralization: The distribution of systems and resources away from a central location.
4. Real-time capabilities: The potential to collect and analyze data without delay.
5. Service orientation: Prioritizing service delivery and customer satisfaction.
6. Modularity: Designing systems as interchangeable and combinable components.

These principles, which are the keys to achieving digital maturity, are methodically evaluated within the S.I.R.I framework.

The S.I.R.I framework provides a comprehensive understanding of an organization’s current state across the process, technology and organization pillars. Each of the 16 dimensions scrutinizes a different aspect of a company’s digital maturity, offering a comprehensive measure of its readiness for digital transformation.
 

The pillars of S.I.R.I.

The process pillar is about operations, supply chains and product lifecycles. An operations view assesses the efficiency, predictability and flexibility of a company’s manufacturing and production processes. A supply chain evaluation looks at the integration, transparency and flexibility of a company’s supply chain. A product lifecycle view measures the efficiency of managing the lifecycles of products or services.

The technology pillar is concerned with automation, connectivity and intelligence. An automation view addresses the extent of automation in manufacturing and other operations. A connectivity examination reviews the capacity of a company’s systems, devices and people to share and exchange information. An intelligence analysis looks at the use of data analytics, artificial intelligence (AI), machine learning (ML) and other technologies to facilitate informed decision making.

The organization pillar looks at leadership, talent readiness, change management and culture. The leadership view surveys the effectiveness of a company’s leaders in driving digital transformation. The talent readiness lens evaluates the skills and readiness of a company’s workforce to support digital transformation. Change management reviews the management of the human side of change, including communications, training and employee engagement. The culture and collaboration overview assesses the company’s culture, especially its support for innovation, risk taking and collaboration.

By leveraging these principles and frameworks, manufacturers can devise actionable plans for Industry 4.0, helping them to effectively prioritize investments and initiatives for measurable benefits from digital transformation.
 

The assessment process

The process of measuring digital maturity using the S.I.R.I assessment also involves the assessment matrix, the world’s first Industry 4.0 self-diagnostic tool, designed to look at and evaluate the current state of industrial factories and plants. The matrix strikes a balance between technical rigor, usability and relevance. To date, the assessment matrix has been used by more than 2,000 companies worldwide, a testament to its versatility, effectiveness and global acceptance.

The evaluation begins with the Official S.I.R.I Assessment (OSA), a two-day independent review of a factory or plant. This assessment provides a formal report with insights such as the characterization of the current state of a company’s manufacturing plants/factories, benchmarking against industry peers or other companies within a specified geography and identifying high-impact areas to prioritize for improvement. During the evaluation, the factory or plant undergoes rigorous scrutiny to determine its digital maturity. The organization is evaluated across the 16 dimensions of the S.I.R.I framework to be sure that elements such as strategy and objectives, organization and talent, operations, technology and products and services, are assessed thoroughly.

Each dimension is a crucial insight that provides a granular view of the organization’s current digital state and its potential for future growth. Upon completion of the evaluation, each dimension is classified into one of six maturity bands, ranging from Band 0 (lowest level of maturity) to Band 6 (highest). This classification serves as a baseline for understanding the current level of digital maturity and helps identify areas that need enhancement.

The S.I.R.I assessment also employs a prioritization component known as the prioritization matrix, which builds on the S.I.R.I matrix. This exercise leverages data such as the company’s cost profile and key performance indicators (KPIs) or essential business objectives to uncover high-impact areas that the organization can target for improvements such as technology and infrastructure, data management and analytics, partnership ecosystems and many others. This results in an accurate, data-driven roadmap for digital transformation initiatives that produce outcomes.

The digital maturity assessment allows organizations to gain insights into their strengths, weaknesses and opportunities related to their digital transformations. This knowledge assists organizations in making informed decisions about which areas to prioritize and invest in, in line with their strategic and operational goals. Without first understanding their digital maturity level, companies could make misguided investments, potentially diverting resources away from areas that require more attention and impeding the progress they intend to make.

With digital technologies continuously evolving, companies must keep pace with new trends to stay relevant. Understanding one’s digital maturity level provides insights into the ability to adapt to these changes, thus ensuring business continuity and resilience in the face of technological market disruptions.

Beyond technological proficiency, digital maturity directly impacts a company’s financial health. According to a study by Capgemini, digitally mature organizations are 26% more profitable than their industry peers. This is because such companies are better equipped to leverage digital tools and technologies, leading to enhanced efficiencies, lower costs and improved customer experiences, all of which can positively impact the bottom line.

For example, General Electric has reported significant cost savings through its digital transformation efforts. By leveraging the power of the Industrial Internet of Things (IIoT) and big data analytics, GE has improved its operational efficiency, leading to substantial reductions in unplanned downtime and maintenance costs.

Also, a high level of digital maturity allows companies to be more agile, capable of rapidly adapting to business changes. This agility can be particularly valuable in a volatile market, enabling businesses to seize new opportunities and mitigate risks more effectively.

However, the path to digital transformation can often pose challenges, including resistance to change, a lack of necessary skills and data privacy and security issues. Overcoming these challenges requires a systematic approach combined with strong leadership:

1. Resistance to change: This is often one of the biggest hurdles in the digital transformation journey. Employees may be apprehensive about new technologies and changes in their roles. This can be addressed by fostering a culture of digital learning and innovation. Training and development programs can help employees understand the benefits of digital transformation and equip them with the skills needed for the digital age. The best way to support change is to employ an onsite digital champion, a knowledgeable digital enthusiast who can help support and communicate the value of adopting new technologies.
2. Lack of skills: The digital transformation journey often requires new skillsets that may not exist within the organization. Partnering with educational institutions, offering continuous learning opportunities and hiring experienced digital consultants can help bridge this gap.
3. Data privacy and security issues: As businesses digitally transform, concerns around data security and privacy become more critical. Having robust cybersecurity measures in place and adhering to data privacy regulations can mitigate these risks.

Leadership commitment to digital transformation sends a strong message. Leaders can use insights from the S.I.R.I assessment to identify gaps and take ownership of the roadmap for transformation, paving the way for a successful digital journey. A case in point is IBM, which undertook a substantial digital transformation initiative aimed at becoming a cognitive solutions and cloud platform company. The process involved substantial internal resistance. However, by establishing a clear vision, engaging employees at all levels and investing in upskilling initiatives, IBM successfully navigated the transformation, achieving a complete business model overhaul with services like infrastructure as a service (IaaS) and software as a service (SaaS).
 

Looking ahead

The path toward digital maturity is not a solitary step but an ongoing series of intentional actions that innovate and adapt, stay ahead of the curve and reshape the future of the industry. The transformation story powered by the S.I.R.I assessment captures the essence of our digital times characterized by resilience, adaptability and continuous growth. For­­­­ companies aspiring to accelerate meaningful change in the digital era, harnessing tools such as the S.I.R.I assessment is not just a strategic option. It is not a matter of “if,” it is a matter of “when.”

Digital transformation is a strategic endeavor that requires careful planning. Merely adopting isolated digital technologies without a broader vision will likely result in limited impact and eventual failure, as scalability will become a challenge. To be successful, it is crucial to embrace a holistic approach and leverage a proven, independent methodology such as S.I.R.I. to ensure comprehensive integration and scalability. Successful organizations do not end up changing for change’s sake but change for the strategic outcomes they want and need.

_{This feature originally appeared in AUTOMATION 2023: IIoT & Industry 4.0, which was published in November 2023.}