FEATURE INDUSTRY 4.0 DEFINING SUCCESS: How manufacturing organisations can measure the impact of digital transformation
commercial objectives. Looking back at our three brand
examples, all of them can demonstrate this single point of focus. Deere & Company’s is putting data and insights into the hands of farmers with technology-led solutions to improve customer experience. Fujitsu is transforming its business into a software/technology services company by focusing on co-creation of digital agendas and products. Covestro is focused on carving a new role and purpose for a chemical manufacturing company, specifically in helping solve global issues. These single points of focus gave each of these businesses a clear steer on how to define both growth and performance objectives. In turn, this single point of focus acts
by Ross Timms, head of strategy, Rufus Leonard T
he reality is that transformation is unique to each individual business,
and often fraught with challenges. It’s expensive, time consuming, and changes may need to operate alongside existing legacy systems and BAU governance as they’re being introduced. With less than one in six organisations delivering successful digital transformation programmes, it’s clear that many companies struggle to get it right. With specific initiatives like Industry
4.0 or the Industrial Internet, there’s increasing pressure on manufacturing companies to transform themselves through a digital agenda. However, with that pressure comes great opportunity. The IDC found that 60 per cent of large manufacturers will create new revenue through information-based products and services and embedded intelligence will drive the highest possible profitability levels. Additionally, the manufacturing industry has one of the largest breadths of relevant, impactful disruptive technology, from IoT, to AI, to autonomous robots and cloud and edge computing.
CHOOSING THE RIGHT TRANSFORMATION To be successful, you need to know why you want to transform, and therefore what kind of transformation your business needs. Following 30 years of helping business leaders transform their organisations – from BT’s first website
20 NOVEMBER 2019 | IRISH MANUFACTURING
in 1994 to BBC’s future of voice strategy in 2019 – we typically see three distinct types of transformation, each with their own characteristics: 1. Change how you do business: responding to changing consumer demands, running the same fundamental business but delivering it in new ways, with new processes and through new technology. 2. Change your business: changing your business offering and responding to evolving needs and behaviours by solving problems in new ways. 3. Change your market: understanding how changing behaviours will create new markets and being there to meet that demand first. The drive to digital transformation
needs to balance two things: the practical need and the requirement for a north star. The former is driven by pressure on profit and the need to move at the speed of the consumer. The latter is driven by your company’s mission, purpose or vision. Aligning your brand to your technology gives your platform a purpose, a role beyond the practical and a clear point of focus which drives transformation efforts.
FIND YOUR SINGLE POINT OF FOCUS Defining the purpose of your transformation programme is integral to measuring its impact and success. Once you’ve defined your ‘why?’ you can distil this into a single point of focus that explicitly meets top-line
With specific initiatives like Industry 4.0 or the Industrial Internet, there’s increasing pressure on manufacturing companies to transform themselves through a digital agenda
as a guiding star for how to leverage your brand, how to shape your customer experiences, understand what’s required of the organisation and your technology platforms. Ask yourselves, ‘how might we defend or improve our brand market position/ensure ongoing user relevance/create internal alignment/maximise platform performance?’.
MEASURING THE IMPACT Understanding this creates a clear platform to identify and align KPIs across the organisation. Do you need to increase brand value/equity or increase EBIDTA? Do you need to create greater efficiencies in schedule attainment or total cycle time? Do you need to reduce employee churn or improve workforce utilisation? Or, finally, do you need to increase platform utilisation or ensure security of data and information? This approach makes sure that a
micro view on performance aligns back to the macro measurement of impact and progress. It gives the business the levers it needs to keep everyone on course over a multi-year programme of significant change. And, crucially, it provides a clear goal to galvanise everyone in the business. However, you choose to define
success, bringing both vision and impact into a single tool is the biggest single step any organisation can take to make sure they are part of the 15 per cent of companies that are successful with their transformation ambitions.
Rufus Leonard
www.rufusleonard.com
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