Digital Transformation – the way forward for operational excellence
Research clearly shows that the improvement of operational excellence or performance is the primary driver for companies to enhance their investments in all that is related to business process improvement (BPI). Obstacles to operational excellence, as you will know, have largely to do with the lack of metrics and the inability therefore to measure them accurately. While companies may generate large amounts of data, accessing them and sorting them into usable reference silos has been difficult. Digital transformation has been able to solve these issues to a large extent.
Some of these enabling technologies have been the likes of the Cloud, Big Data as well as Analytics, and Mobility. Simply by moving data into the Cloud and making provisions for mobile access to it – the problem of data hoarding was addressed to a large extent. And this is just the tip of the ice-berg. Organizations are looking to employ a wide range of digital technologies that include the Internet as well as Industrial Internet of Things (IoT and IIoT), cloud computing, big data and analytics, and also mobility, to help achieve operational excellence.
Operational excellence includes several business elements. Digital transformation projects will have to be taken up in each of these individual elements to bring about operational performance improvement. Importantly, they must be considered a good investment by any organization.
When trying to achieve such digital operational excellence you will naturally have to balance a number of factors. These can be in the areas of:
- Performance management of assets
- Enterprise quality management
- Environmental, health and safety concerns
- Industrial energy management
- Manufacturing operations management
- Introducing new product designs
- Supply chain management and the like
A recent Forrester report concludes that digital operational excellence goes a long way in increasing business agility. This means that your rate of market readiness increases, employee productivity goes up, leaner processes can be put in place and you can maximize asset utilization to a large extent. Here is how you can set the ball rolling on achieving digital operational excellence.
- Have a Clear Digital Transformation Mandate: At the management level, a clarity of thought and the road ahead for the organization is important. Once this is established, it is easier for the processes to percolate down the hierarchy and be incorporated into daily functioning.
- Encourage a Digital-first Culture: Once a well-informed digital working environment is established, it is easier for innovations to take place. This means that as management, you have to educate employees and encourage them to look at digital transformation options at a micro-level, which then tie in with company growth on the larger scale.
- Dissect Customer Journeys: When examining customer interactions, don’t restrict it to being only about the process of client satisfaction from the company end. A clear picture emerges when customer behavior as well as interaction is examined from the consumer to the supplier and the other way round as well. A clearer picture emerges.
- Encourage cross–functional teams: In the process of digital transformation, there is always a bridge period when the work of teams will overlap. Creating cross-functional teams that can iron out these obstacles can make a huge difference to facilitating a full-fledged transformation
- Work out a Business Technology Agenda: Put together a digital team that has specific digital skills and who have the passion to be the driving force behind enterprise level digital transformation. Investments will have to be made on multiple levels of systems, infrastructure as well as processes to drive change as well as engage customers.
- Be Open to Experimentation and Co-Creation: Constantly working on digital upgrading prototypes is the simplest way to building digital capabilities of your organization. Apply this to every aspect of your business and you will have a strong base for digital transformation in place.
Any organization that is seeking to achieve operational excellence through digital transformation will have to work on getting its information technology (IT) set up aligned to its business goals. Simultaneously, there is a need for a bird’s eye view of the business and that too in real time to make some important decisions. The idea is not to initiate one big change, but simply to create smaller models or prototypes, work with them and then improve flexibility and efficiency as you go.
Going forward, the focus is firmly on digital transformation. This approach is being hailed as the fourth industrial revolution and is increasingly being known by a host of titles such as ‘Smart Manufacturing in the U.S.’, ‘Industry 4.0 in Germany’, and ‘Made in China 2025’. In an industry environment that is increasingly interconnected digital transformation tools that enable industries to work faster, more efficiently and intuitively are what is going to support sustainability in the markets and encourage innovation.
Learn from the Case Study: How operational excellence enhanced with digitalized production systems for a chemical manufacturer
All this being said, these recommendations can all work only when there is a willingness to invest in technologies that will drive digital transformation as well as welcome transformation. For every company considering digital transformation projects, there are multiple approaches that need to be brought together seamlessly to ensure success.