Incremental approach to digital transformation gaining traction

Posted on 9 Apr 2021 by Karen Queen

Instead of an all-in leap across the digital divide, industrial professionals have learned the hard way that focusing on incremental, operation-specific digital transformation works better.

In a recent survey, 94% of industrial professionals told AI firm, Plutoshift, that digital transformation spans their entire company, but only 25% said an enterprise-wide, top-down approach was the best method.

“Digital transformation can interrupt workflows and uncover expensive and time-consuming problems, all for a digitization process that might not even fix the problems those on the ground are experiencing,” said Prateek Joshi, founder and CEO of Plutoshift. “While the top-down approach might look great in the boardroom, it might not fix the issues most pertinent to those who work on the front lines.”

The top-down approach can be plagued with massive consulting contracts and multi-year timetables. Despite capital outlay, the approach can lead to confusion and result in failing to solve the problem a smarter factory was intended to remedy.

Often the issues that come up are related to a lack of understanding of the workflow that’s being digitized. When the company board and top executives impose digital initiatives without including those on the ground, the planned transformation often uncovers new problems such as software that doesn’t apply to all workflows or the need for new computers or other hardware to run new software. These obstacles slow or even halt digital transformation.

Productivity and ROI can suffer when front-line employees are disengaged or left out of the company’s digitization process. When these on-the-ground employees are tasked with carrying out a top-to-bottom approach to digitization, 78% reported uncovering underlying issues. Respondents said that some of these issues slowed down the digitization process (57%), and others reported that these issues added to its overall cost (44%).

“This shows that when the C-suite embarks on a top-to-bottom approach without engaging with their staff, they could be leaving money on the table,” Joshi said.

Small pilot projects may be best for Digital Transformation

As an alternative, operation-specific digital transformation is an emerging method implementing digitization and automation techniques to specific workflows directly within a front-line professional’s control. The strategy is to test with smaller projects that yield immediate results.

Front-line workers may in fact know best where technology can drive results. When asked about digitization in their work, more than two thirds (68%) of 500 industrial professionals surveyed by Plutoshift said they had specific workflows they’d like to improve and 58% said they believed they already had the tools on hand to start a new digital strategy.

This incremental approach is gaining traction; 58% of Plutoshift’s respondents said they have explored operation-specific digital transformation. Of those, 79% said the effort was successful or somewhat successful. Two-thirds believed incremental transformation would be more manageable and cost-efficient.

One problem that can arise, however, with operation-specific transformations to smart factories is what’s often referred to as islands of automation—where individual steps in a process are automated but not integrated or connected with each other. Involved project champions can make the difference.

“We have found that project champions can drive integration of data automation, and op-specific successes, when they begin to connect departments and teams within their organization.,” Joshi said. “The champion can  facilitate integration across the organization.”

For example, many manufacturers collect sensor data across multiple processes. Part of the challenge is the data is spread out all over the company and not integrated or connected with other data that could be relevant.  

“Data is only valuable if it’s put to work, if insights are extracted and it’s applied to future learnings and activities,” Joshi said. “What’s the point of collecting data if it just sits there? We’ve found that many companies are collecting it and using it; however, we’ve probably seen as many companies collecting it not knowing how to make use of it.”

“Implementing technology solutions begins to surface insights that were not previously available, “ Joshi continued. “As the different parts of the organization spin these up, they will need to decide how to integrate them effectively.” 

Nearly three-fourths of companies said their digital transformation strategy had changed; and most of those changes involved the abrupt shifts brought on by the Covid-19 pandemic. Eighty-four percent said the pandemic rapidly expedited their need for digital workflows.

“Since the pandemic, businesses have been shoving years of transformation into just a couple of months,” Joshi said. “Obviously, Covid has been an overt driver of change, both positive and negative. After being forced to work from home, 42% of respondents said that some of their work became difficult or impossible to complete virtually.”

This change accelerates the need for new technologies and digital practices such as performance monitoring software and distance tracking systems that at first were needed only to accommodate this new era, but are now a vital part of day-to-day work. Related strategies could involve using digital monitoring and maintenance technologies, converting, initiating lights out automation to limit the number of people that need to be on-site, or using IoT applications to help with performance management.