Companies that have embraced digital transformation are 26% more profitable than their average industry competitors. They also enjoy a 12% higher market valuation, according to the MIT Centre for Business. However, digital transformation can be an incredibly complex process. With that in mind, Terri Hiskey, Vice President, global product marketing for manufacturing at Epicor Software, provides CEO Today with five key steps companies need to take to prepare for a successful digital transformation journey.
1. Align your business transformation strategy to your business goals
A massive 96% of companies see digital transformation as important or critical to their development. However, in order for businesses to avoid investing in new technology for the sake of it, or because they feel they should, it is essential to identify where technology change is needed most. Manufacturers must assess their overall business goals, then ask what technology will help you to achieve these.
2. Invest in the right technologies
Digital transformation means different things to different businesses, and, crucially, there’s no one size fits all solution: according to our research, 19% of manufacturers are planning to invest in inventory management, 18% in cloud, big data and customer relationship management, and 17% are planning a mobile technology implementation.
Businesses must ensure that they are investing in the technologies that are right for them. One business may see immediate benefits from implementing cloud infrastructure. Meanwhile, a manufacturer operating out of just one facility might see more immediate ROI from an on-premise enterprise resource planning (ERP) solution that tracks orders against real-time stock and supply chain data.
3. Ensure buy-in from key stakeholders within your business
After a firm has identified how digital transformation can support its business goals, it must bring stakeholders on board–because successful digital transformation strategies change how businesses work. They impact people’s jobs, how they complete tasks, and also how they work together.
Helping staff understand the reason for the business’s investment will make it easier to overcome any potential resistance to new processes. This is particularly important when digital technologies are being implemented to automate tasks that are otherwise completed by staff members, or when it might not be immediately obvious how an investment will deliver ROI.
4. Turn insight into action
Businesses today are collecting more data than ever, but simply amassing vast amounts of information as a result of digital transformation is not enough. The key lies in being able to use insights effectively, to guide change or identify new revenue streams.
The latest data analytics suites can provide businesses with crucial information about customer trends and predictions, or information about how products are performing.
For example, UK manufacturer of fasteners and latches, Southco, has optimised the assembly line in its smart factory in Worcester. Intelligence from the Epicor Mattec MES system demonstrated the business was only benefiting from 20% utilisation of its static assembly lines. Many products were previously only assembled on their own ‘exclusive’ assembly benches. However, once it was highlighted that in some cases a bench would only be used for eight hours a month, Southco deployed semi-automated plug and play assembly machines which are now used for multi-assembly tasks. This has pushed average bench utilisation up to 60%.
5. Continually reassess your digital strategy
Companies must understand that digital transformation is a journey that is never complete. New technologies are being launched all the time—from robots that complete tasks on the production line quicker than humans, to machines that can fix equipment problems without intervention.
It’s important that businesses constantly adapt their digital transformation strategy to encompass new technologies, continually reassess their journey, and constantly question the rate of digital change—is it matching up to their customer expectations? How is it stacking up against business goals? If these change, perhaps the businesses’ technology should too.
Innovative ERP solutions, combined with Industry 4.0 developments, are already helping to automate production lines, streamline supply chains, and provide the intelligent data manufacturers need to react quickly to changing consumer demands. For UK businesses to take a place among the world’s production leaders, deploying advanced technology to drive manufacturing efficiency is going to be the way forward.