What is digital transformation? Essentially, it means using IT to fundamentally change business models to deliver efficiencies, a greater return on investment, lower costs and an improved customer experience and business processes.
Even so-called “legacy” businesses like manufacturers are using technology to retool their business models. For manufacturers, focusing on back-office technology to change daily processes is a key trend on their digital transformation journeys, according to Deloitte’s Tech Trends 2018: “Though savvy organizations are approaching the digital mandate from a number of angles, one issue remains consistently important: the interconnectedness of front- and back-office systems.”
Many manufacturing companies are transforming operations with advanced technology. IDC estimates that global spending on digital transformation will hit $1.7 trillion by the end of 2019 — a 42 percent increase from 2017.
By the end of next year, IDC predicts, three-fourths of large manufacturers worldwide will deploy Internet of Things and analytics-based situational awareness; and by the end of 2020, half will start seeing business value from the integration of supply chain, plant operations, and product and service lifecycle management.
Think you’re ready to make big changes at your organization? Here are four areas to consider.
1. Get Leadership On Board for Digital Transformation
Get executive buy-in from the start, before the project is under way. Funding isn’t the same as buy-in. When you have buy-in from every level of management, things go more smoothly. That’s true with all IT projects, but more so with digital transformation because it can take a while to see a return on investment.
2. Ensure the Right People Are in Place to Change the Organization
Make sure the right personnel are in place — or accessible. “Smaller companies in particular in the manufacturing sector may have issues with IT staffing,” says Benjamin Moses, technical director at the Association for Manufacturing Technology. Moses suggests looking for consultants or other outside help to get your project off the ground and help train existing staffers.
3. Secure IT Systems Ahead of Transformation Projects
Don’t forget about security. Digital transformation is useless if the technology you’re adding isn’t secure. John Peterson, general manager of IT for automotive parts manufacturer AW North Carolina, says his company doubled down on security right away. “The first thing we did was an audit, which found that we were not in great shape. We immediately put in a new firewall, intrusion detection, email and web filtering.”
4. Remember that Digital Transformation Doesn't Happen Overnight
Expect growing pains. Bob Barker Company, a supplier of products to correctional facilities, migrated from an on-premises communications platform to a cloud-based offering. The process is saving them $200,000 per year, but the journey wasn’t an easy one, says IT Director Dan Callari. “The initial stand-up took a lot of blood, sweat and tears,” he says. “It was a lot of late nights and a lot of weekend driving, but it was worth it in the end.”
For more on how digital transformation is reshaping the manufacturing sector, check out, “Manufacturing Companies Reinvent Themselves with Advanced Technology.”