The 3 Hallmarks of Successful Digital Transformation in Operations
Digital transformation is the business buzzword of the moment – and for good reason. Far from being another tech fad, however, the use of data and technology to drive operational efficiency could mean the difference between success and failure in the process industry.
As every strategy needs to include people, processes and technology, by downloading Hexagon’s free Digitizing Operations Guide you can find out how to align all three. Above all, the important thing to remember is: Digital Transformation works, but only if you can transition or adapt your people and process to new technology effectively.
Effective digital transformation is determined by three main factors:
1. Strong strategic decisions – and the ability to implement them
Senior management needs to be at the heart of any transformational effort, and they must model the behaviors and processes which they want the rest of the business to adopt. Where your managers lead, employees will follow.
Higher digital adoption rates are associated with the quality of organizational capital – those who successfully embed technology throughout their organization benefit from more accurate and relevant data for strategic decision making. This means that systems and philosophies are paramount to effective digital transformation. The executive team must start by defining necessary leadership skills, updating their own managerial practices and bringing in innovative work processes.
2. The talent pool – and how it is nurtured
As well as regularly upgrading the skills of your process workers, it will help to reserve some of your budgets for hiring digital technology specialists. Adding these specialists to your team will help you automate and streamline new processes. You need team members who are willing to regularly upskill to stay abreast of new technologies that could help your team – and the rest of your organization – meet its digital transformation goals.
While executive decisions to strengthen investment in digital technologies are important, emphasis needs to be given to complementary knowledge and capabilities, such as research and development, process innovation and other “intangibles”. One of the primary drivers of digital transformation success is investing in your workers’ skills.
3. Investment in experimentation
Digital transformation involves some degree of trial and error, which may require a change of corporate culture that affirms the value of failure as well as success. Sufficient investment will allow you to scale up quickly when one of these trials succeeds – or to quickly exit the technology if it fails.
The adoption of new technology is becoming more challenging over time because technology is innovating more quickly than industry can implement it. Digital adoption will be facilitated by efficient resource allocation, because a firm’s incentives to experiment with uncertain digital technologies will be shaped by its perceived ability to rapidly scale up operations in the event of success. They will also be able to rapidly scale down operations if unsuccessful
People first
As you can see, people are critical to your digital transformation success. As your business begins defining its strategy, don’t move on to technology issues before you have properly addressed the role your people will play.
Once issues surrounding leadership and skills have been resolved, your business can begin to foster a culture of experimentation. Innovation driven by experimentation will be the key to achieving successful, long-term digital transformation – and establishing a competitive advantage in your industry.
Ready to take your digital transformation efforts to the next level? Take a look at The Complete Executives’ Guide to Digitizing Operations for more.