Digital transformation is one of the most overused terms in business.

Organizations that are ‘digital leaders’ are driving transformations by becoming digital – not merely doing digital by implementing digital technologies. These companies are creating a sense of urgency, enabling a 360o customer experience, becoming efficient and operationally resilient and, thereby, delivering sustainable business results. Stakeholder value from successful business transformations come from a balance of growth and cost-optimization initiatives, and when aligned with core organizational strategy and purpose.

Industry 4.0 has accelerated digital transformation combining physical and digital technologies – cloud computing, sensors, internet of things (IoT), mobility & augmented reality, big data, AI & analytics, robotics, additive manufacturing, etc. The promise of Industry 4.0 is to drive (inter)connected enterprise(s) that are more flexible, responsive, and enable intelligent operations and actions derived from data-driven insights. Large economic potential is linked to digital transformation – and much of it is yet to be captured – even in North America and Europe.

Why are Industrials laggards?

While digital transformation started in the early years of last decade (2010+), the industrial sectors (i.e., Oil & Gas, Energy & Utilities, Manufacturing, and Mining & Metals) are among the laggards.

Industrial digital transformations have profound implications to an enterprise affecting strategy, business and operating models, and talent & organizational structure. However, manufacturing and operations stakeholders have not necessarily been the key decision-makers. But that is changing! Industrials that have realized significant return on investment (ROI) from their digital transformation initiatives are likely driven by productivity, safety & compliance, and operational objectives rather than mere “desire for innovation.”

Covid-19 has also accelerated digital transformation in the industrial sectors, especially, around the front-line workers in manufacturing, operations, and service functions. However, the Industrials Sector is very diverse – Automotive, Aerospace & Defense, Electrical & Electronic Components, Industrial Machinery, Industrial Services, etc.

For the industrial sectors, these digital transformation opportunities differ for capital-intensive vs. labor-intensive industries:

• Capital-intensive industries with the potential to further transform the physical asset management lifecycle.
• Labor-intensive industries to upskill industrial workers to improve productivity and safety, and enable operations leveraging digital tools.

There are many questions that need to be explored, understood, and acted on, such as:

• Why have many Industry 4.0 initiatives stalled, and in the proverbial “proof-of-concept purgatory”?
• How can business leaders attain the projected return on investments (ROI) and produce sustainable improvements within Industrials?
• How can Industrials leverage connected workspaces enabled by the Cloud? How can we leverage on-premises, private cloud, public cloud, hybrid cloud, and multi-cloud solutions?
• How can we extend information technologies from back office or Operations Management Offices to the front-line workers using mobile technologies and augmented reality securely?
• How can we capture data and unleash the power of data (big data) leveraging emerging technologies, such as analytics, artificial intelligence, and machine learning?
• What business models can drive operational capabilities within Industrials and, thereby, deliver the promise of innovation and digital transformation?
• Does digital industrial transformation materially vary based on the Industry sub-segment?

What do you think?

About the Author

Based in the New York metropolitan area, John Gonsalves is an industry thought leader specializing in business innovation and digital transformation. As a senior business leader, he served Global 2000 clients while at Cognizant, HARMAN, Capgemini, EMC, and ADVENTIS. His 25+ years’ industry experience spans heritage IT services, product & platform engineering, and digital services as applied to manufacturing & industrials, products & resources, healthcare & life sciences, and financial services sectors.