Digital technologies are transforming how businesses operate. Manufacturers today understand the importance of these changes but many find it hard to keep pace with technological advancements. Without a precise strategy in place, successfully deploying your first initiative towards digital transformation is going to prove extremely challenging.
In a recent webinar, we discussed how to build an Industry 4.0 strategy.
According to Jonathan Gross of Pemeco Consulting, here are 7 steps to help you build a roadmap to your future:
1. Identify Industry and Competitive Drivers
You must understand where things currently stand and where they’re headed, both from an industry and a competitive perspective. Where are you excelling, and where can you improve? By examining industry trends and drivers, you’ll get a clearer picture of how you can establish your competitive differentiators and possibly open up new business avenues. For example, if your specific sector lags behind in real-time data sharing, building this capability will create a differentiator and therefore an opportunity to surge ahead of the competition.
2. Map Current Technology Architecture
Now that you have a good handle on the competitive landscape it’s time to determine your current technology state compared to where you need it to be to get you where you want to go. Map your existing technology architecture to understand what is currently required to push a transaction through the organization. How does the data flow? Where does it flow smoothly and where are the friction points? All of these details help you gain a better understanding of where there may be major gaps in your systems and how upgrading will provide business value to your organization.
3. Map Current Business Frictions and Gaps
By visually mapping out your business processes, you can see where the frictions, gaps and, ultimately, the opportunities to gain efficiencies, lie. It’s necessary to dig deep and get very specific with this project, but it’s vital that you have an understanding of what’s going on within your organization that may be an impediment to you delivering on your Industry 4.0 strategy. Digital transformation requires rethinking how business is carried out, often resulting in significant changes to your organizational structure that will help achieve more streamlined business processes.
4. Map Future Requirements
Now that you’ve established the gaps within your processes, it’s time to bridge them with viable solutions. This is when you build your case for change by mapping out the requirements of the future-state, including all the necessary modifications to organizational structures, data and information architecture and business processes, plus the technologies required to support it all. This will outline where you are today, what is preventing you from getting to the future, and how you’re going to overcome these challenges to evolve into a more mature company.
5. Build Your Future Technology Architecture
It’s now time to start thinking about your technology architecture environment, which involves three layers of Industry 4.0 concepts:
- Edge computing – such as manufacturing control systems
- Fog computing – which is like a superset of edge computing, bridging the cloud and connected devices, and
- Cloud computing – Internet-based systems and solutions that are available to many users
Your own set of circumstances and business goals (in terms of automation, analysis, big data needs, flexibility to quickly and efficiently deliver last-minute customer changes, etc.) will ultimately determine the significance of the roles for each of these areas.
6. Build Your Program Plan
Next, this will all get built into a program plan outlining exactly how you’re going to phase in your strategy by determining the order for each implementation stage and mapping out integration and acquisition timing. To support this strategy, you’ll examine areas that need to be implemented concurrently plus changes required to the organizational structure, business processes, technology, and data. Lastly, you will need to assign project teams while also determining how best to manage the risks involved in this entire operation. Upon completion of this step, you’ll have an Industry 4.0 roadmap to follow.
7. Build Your Budget
Now that your implementation teams are organized and your projects and technologies are planned, it’s time to assemble a 10-year budget. Prepare a comprehensive integrated program budget for each project which includes complete Return on Investment (ROI), Total Cost of Ownership (TCO) and internal rate of return details.
Look out for the next part of this series “The Digital Transformation Journey: Part Three”, to learn about what to avoid in order to succeed with your digital transformation initiatives.