Digital transformation: Getting started, accelerating quickly

Digital transformation: Getting started, accelerating quickly
Digital transformation: Getting started, accelerating quickly
Even though we’ve got a few years’ experience now, it’s fair to say that industrial companies are just getting started on digital transformation. But the results of a new survey conducted by the Digital Transformation Council and ARC Advisory Group, in conjunction with ISA and, provide evidence that industrial companies are becoming more comfortable with the prospect and process of using new technologies in innovative ways to change and improve their business.  

A few companies have been able to measure improvements in innovation, customer outcomes, revenue, and new product introductions as a result of their transformation programs. And, judging from recent anecdotal stories from manufacturers, the COVID-19 crisis will end up accelerating transformation programs even further. That is because companies have glimpsed the power and potential benefits of transformation initiatives as they have been forced to react to the crisis. 

Is your organization keeping up with the changes and transformations taking place throughout the industrial sector?  By comparing your own organization with the data revealed by this survey, you can get a feel for how other organizations are executing their respective digital transformations.  Download a PDF of the full results of the survey.

The research was designed to give manufacturers and producers a feel for how their organization compares to others in progressing their digital transformation journeys. The research was conducted in the last quarter of 2019 and the first two months of 2020 with individuals from all vertical industries. The majority of respondents were from North America, Western Europe, and Asia, but Eastern Europe, Latin America, and the Middle East and Africa were also represented.

More than a third of the respondents worked for large companies (greater than $5 billion), and almost 30 percent worked for small (under $500 million) companies, with the rest falling somewhere in between. About 30 percent identified themselves as C-level executives or executive management and about 40 percent identified themselves as functional or supervisory managers. Respondents’ main focuses in their organizations varied quite a bit, but was split among digital transformation/digital innovation, operations, engineering, IT, maintenance, business, and supply chain.

Results show that most companies are actively pursuing digital transformation initiatives on multiple fronts and with strong support from senior executives.  That reflects the fact that many organizations see digital transformation as critical to their business success and not merely a technology-based effort to incrementally improve production operations.  

Many companies also have either fully deployed, or are in the process of scaling, many new technologies.  Cloud, IoT, robotic process automation, edge computing, digital twin, and more are among the technologies these companies now use effectively.  Other key findings include:
  • CEOs, CIOs, and CDOs are often the key deciders – or at least key influencers – in most digital transformation initiatives.
  • Companies are challenged to support parallel or interconnected digital transformation initiatives in six main business areas. Though production operations tops the list of digital transformation programs, for many companies, projects are also underway in one or more of these areas as well: business operations, supply chain and logistics, design and engineering, services and servitization, and (connected) products.
  • Learning to use data or becoming data-driven, is an important strategic consideration for 75 percent of companies pursuing digital transformation. Other strategic goals include business agility and sustainability.
  • Companies are obtaining measurable improvements from their digital transformation programs. Productivity, cost, quality, and uptime lead the list, but some companies have measured improvements in innovation, customer outcomes, revenue, and new product introduction.
Going forward, we expect to see industrial companies aggressively pursue digital transformation initiatives focused on new operating and business processes, services, and competitive strategies. But all this is not to say that the way forward is an easy one.  Many challenges still exit. 

Cost is a factor and creating a business case or ROI justification can be daunting.  Workforce, organization, and cultural issues likely will need serious attention if the transformation programs are ambitious enough to make a difference.  And as with any new initiative, there will be many technical, process, and business details to be discovered and worked through.

About The Author

Greg Gorbach is Vice President of Digitization and IoT for ARC Advisory Group. Greg spearheads ARC's transformative technologies for industry initiatives, including Analytics and Big Data, Cloud Computing, Mobility, and Industrial Internet of Things.

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