Our recent research study with Cranfield University highlighted 7 key challenges impacting businesses ability to implement a digital transformation programme.
The UK economy is on the road to recovery, and this has caused a sudden rise in demand for highly-engineered products at a time when supply chains are already stressed. Manufacturers have no time to waste when it comes to finding ways to improve their productivity and must ensure that they have well-developed digital transformation plans in place. A joint research study by Vendigital and Cranfield University, conducted with 38 companies, has identified where businesses are on their digital transformation journeys and what challenges need to be overcome.
The implementation of Industry 4.0 technologies, such as the Internet of Things (IoT), automation, big data analytics, AI and machine learning can help manufacturers to improve their productivity by supporting them in scaling back up to their pre-pandemic size, while maintaining an efficient cost base. At the same time, improved data visibility across the organisation can help to facilitate intelligent decision making as well as improve customisation, agility, speed to market and sustainability. However, for many Board-level decision makers, Industry 4.0 is still a buzzword and a lack of understanding about its true business benefits could be holding them back from realising its potential.
The acceleration of digital transformation during the pandemic means that now is the perfect time for manufacturers to build on this trend by increasing adoption of AI and digital collaboration. According to the research study, manufacturers perceive some Industry 4.0 technologies as more important than others. For example, cybersecurity and automation were ranked as ‘high importance’, while less focus was given to blockchain, augmented reality, autonomous robots, additive manufacturing and communication protocols.
Companies may also lack the methods, tools or practical guidance needed to define their focus areas for digital transformation, or may not have necessary infrastructure, such as ERP systems or robotics. A lack of specialist skills or an over-reliance on developing robust business cases can also dissuade companies from making investments in this area and becoming leaders in their global production networks. In the research study, a general lack of skills was identified as one of businesses’ top challenges to digital transformation, especially when it comes to integrating Industry 4.0 technologies.
To ensure that investments in digital transformation deliver real results, businesses must develop an organisation-wide understanding of Industry 4.0, and its potential for unlocking hidden value. They should then turn their attention to building digital leadership from the top down. This is key to promoting the importance of digital transformation across all areas of the business and nurturing an organisational culture that is open to exploring new technologies.
The next step is for businesses to consider how digital transformation can support their 3-5 year business strategy and help them in optimising the customer journey, which should include an assessment of best practice across the marketplace. The company should then take steps to secure its required digital skills by upskilling existing employees and filling skills gaps. This should not only cover projects that are already underway, but also support new concepts or the business’ future areas for expansion.
In order to achieve successful digital transformation, UK industry must focus on overcoming resistance to change and building it into their organisational culture. Misconceptions by employees that their jobs may be being undermined by any digital technologies under trial can prevent such changes from being an empowering experience for the workforce. This may result from weak leadership in this area, or from digital transformation initiatives being siloed within IT departments, rather than integrated within the wider business. To overcome these issues, decision makers must have a clear vision of what success will look like, and ensure all people are on board with it, whatever path that may take. Individual employees should also be given responsibility for making transformation initiatives a success, which could include the appointment of Digital Transformation Champions.
Once a range of Industry 4.0 technologies have been assessed to determine their value creation potential against a defined objective, a bespoke Industry 4.0 framework for delivery should be developed. This will vary depending on the business’ current operating model and its future strategy. Opportunities for integrating digital technologies should then be kept under constant review and the benefits of transformation should be closely tracked to guide strategic planning.
In order to achieve their growth ambitions and stay competitive in the future, it’s vital that manufacturers accelerate their digital transformation plans now. By investing in the right skills and putting in place a clear data maturity roadmap to guide their digital transformation journeys, businesses in the sector can strengthen their position in the marketplace and realise enterprise value.
Our white paper on the subject of digital transformation will be coming soon. Sign-up for Vendigital insights to get the paper as soon as it is launched.
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