5 critical success factors for digital transformation
Digital transformation is the new reality; manufacturing companies must go digital, modernizing their processes by adopting technological tools that support their transformation.
We are living in the age of the fourth industrial revolution:
- 1780: Steam engine, indoor plumbing, modern production equipment increases industrial capacity.
- 1870: Organization of labour transforms society, mass production, major technological breakthroughs, electrification.
- 1970: Space exploration, home appliances, automation of production.
- 2017: coexistence of analog and digital worlds, artificial intelligence, mining of “big data”, affordable technology, subscription model.
This fourth industrial revolution presents opportunities as well as risks and pitfalls for society as a whole and for businesses. As we emerge from the era of Web 2.0, we are entering the era of Business 4.0.
Prophets of doom have predicted the demise of entire industries due to robotization and the disappearance of various types of work and occupations. Businesses must adapt to the new reality or become obsolete relics.
Alarming statistics eloquently illustrate that the very survival of companies is at stake. If you’ve been following our recent publications, you’ll know that:
- 89% of Fortune 500 companies in 1955 no longer exist today because they failed to adapt;
- 77% of companies will be operating in a new field within 3 years;
- 41% of your company’s revenues will stem from a digital strategy by 2020.
According to Ray Wang, of Constellation Research, who coined the term “digital Darwinism”, enterprises that don’t evolve, die. His pithy remark, which has gone viral, summed it up: “digital Darwinism is unkind to those who wait”.
Organizations know this, but quite rightly want to ensure that their transformation project will truly yield the benefits promised. Where do you start? How can you know that your company is on the right track? Ray Wang lists the following five critical factors for digital transformation success:
- Understand your mission and align transformation vectors with your mission priorities.
- If one of the pillars of your company is sales, prioritize a CRM system;
- If your mission is to produce consumer goods, optimize logistics with an ERP tool;
- If your business model could benefit from on-line sales through a Web site, get an eCommerce solution;
- Build a digital culture. Beyond solutions, architecture and the Cloud – how do we humanize digital? Wang suggests banking on a diversity of abilities when choosing and implementing technological projects: engineers, with their pragmatic, scientific mindset, should work together with artisans, who enhance user and customer experience.
- Remember that form follows function: technological solutions must be predicated on your business model, not the other way around. Avoid structuring your entire company based on software capacities and limitations:
- Clearly define your models and processes first.
- Then go for the technological solutions, applications and platforms that support these processes.
- Move from gut-driven decisions to decisions that are based on reliable data, measures and forecasts based on artificial intelligence.
- Be open to innovation, and draw inspiration from and build on models that your competitors put out there. Draw on cooperation and co-innovation models.
Business 4.0 must transform and adopt new ways of doing things, create new business models and maximize the use of technologies to support, and survive, these changes.
Gestisoft is proud to be participating in the innovative strategic manufacturer’s forum (Forum stratégique manufacturier), to be held on April 7 at the Palais des congrès de Montréal. Come and continue the conversation with us, and benefit from the expertise of our advisors, to steer you through your digital transformation.