Digital transformation
Reading time: 20 min
May 14, 2022
AUTOR
Pascal NAPARTY
CEO & Founder
In a nutshell
In 2000 the world population was 6.1 billion and the number of people connected to the Internet was estimated at 360 million.
In 2022 the world population reached 7.9 billion people and there were 5 billion of them connected to the Internet.
Digitalizing processes means positioning the company in the connected market of more than 5 billion people, but it also means giving the company the computing power and speed of digital.
Digital Transformation, Digital Transition, Digitalization of processes, Digital journey, DX... are all marketing terms created to talk about the transformation induced by the fourth wave of the industrial revolution.
Introduction
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The world population was 1.6 billion inhabitants in 1900. One century later it reached 6.1 billion, and got the arrival of the internet with 360 million people connected.
What has happened in 100 years?
The world has gone through the second industrial wave - electrification which enabled mass production - and also the third industrial wave - automation which enabled the reduction of costs and tedious tasks. The consumer society has exploded. These transformations of the industrial landscape have been accompanied by social, economic, political and cultural transformations.
The birth of the microprocessor in 1971 and the microcomputer in 1972 kicked off an exponential growth in technological innovation. The computing power allowed the acceleration of all simulations as well as the creation of systems providing high performance. Around 2010, we finally entered the 4th wave of the industrial revolution, with the availability of disruptive technologies such as: 3D printing, internet of things, cobots, artificial intelligence, cloud, metaverse ...
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Not considering these technological advances is to risk seeing your business disappear.
Considering them means - in view of the complexity and changes needed - taking the risk of not succeeding in adoption and disappearing through a bad digital strategy.
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So how to succeed ? What are the criteria for success ? We will reveal this to you in the following sections.
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What should you expect ?
The 4th wave of the industrial revolution brings the maturity of technologies that have existed for several years, but which still required improvements to make them “standardizable” in production (some will still experience some changes from our point of view).
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Obviously the idea of ​​digital transformation is to bring the company on the road to internet customers. But the fact remains that the fundamentals of business must be respected : a response must be provided to a well-defined need. The need now, is to offer the customer - who has become a consumer - the possibility of personalizing his product infinitely and up to the latest moment in the production chain.
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This involves establishing an almost permanent "connection" with consumers... or finding a strategy to bring consumers together around your brand, your products, your services. How to do this ? Large multinationals have open the door. They created the need, allowed the personalization of the order, worked on innovation strategies to get ahead of the competition, they even created emotion to their consumers ... they seek their loyalty. And everything is good to get there... including a more marked social footprint, the demonstration that they contribute to the challenges of the planet and that human values ​​are priorities ito them, with the establishment of new cultures highlighting the values ​​of the company and its employees forward.
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It seems quite logical that on an operational level, the digitalization of business processes and the use of the most efficient tools become essential.
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But be careful not to get lost along the way, Digital Transformation is not a project with a beginning and an end ... it is a “journey” that does not stop. At least if you want to dictate the rules to the market. And there are many areas to consider ... it goes without saying that investments are also very important. As always, it is a scale whose financial balance is growth with positive margins.
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You will therefore need to take the subject very seriously and align the reasons and priorities with growth ambitions. Evaluate internal and external impacts. Assess the maturity of your teams to embrace the new challenge and continually put yourself in a mode of improvement and pursuit of excellence. You will have to be visionary and identify the “quick wins” that will fuel the program.
To unleash the power of your employees, you will need to review their interactions, their motivations, their training, their desire to travel with your company all along that journey.
Does the transformation work for everyone ? No ! Many companies have approached the subject as a traditional IT implementation project ... but without reinventing the company, it is guaranteed failure. Indeed, the parameters of success involve opening up your business processes to integrate external stakeholders. The complexity of the new technologies deployed may require new profiles to be recruited ... fundamentally the culture of the company will change. If you're not convinced of this, don't go this way. Instead, continue your localized optimization routines and cross your fingers that your competitors will do the same.
On the other hand, if you foresee the magnitude of the initiative for your company, you will quickly understand that you must not wait and that you will have to be supported by experts. And, in this scenario, you will navigate the "A team" of companies that are giving themselves the means to transform and you will find the benefits for your companies and your employees.
Reinvent your business
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To begin, it is important to take stock of the situation. To understand your strengths, your weaknesses, to identify threats and opportunities. The justification for transformation must be defined in relation to the company's main business indicators. Then it is necessary to imagine the possible scenarios and develop them, confirm the feasibility, identify the risks and obtain the support of the executive committee, all managers and finally feel the endorsement of the employees.
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If alignment is not done before launching the program, you will encounter resistance which will slow you down at the worst moment in your transformation.
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For all these stages, you will find many service companies who can offer you their portfolios of offers, to structure your approach and properly evaluate the "pros" and "cons" at each stage.
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But above all, you need to understand the new technologies available to youv... and perhaps simply start to get up to the level of being able to start with "PLM Cleansing" - which corresponds to setting up a common and secure repository of data management - because without data control, there can be no digital power to deploy.
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Here is the list of the main technologies that you should consider in your studies:
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3D printing or additive printing
is the ability to create a physical object from a digitally encoded design by deposition of materials via a 3D printing process.
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​Artificial Intelligence (AI)
applies advanced analytics and logic techniques, including machine learning, to interpret events, support and automate decisions, and take action.
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Business Process Management (BPM)
is a discipline that uses various methods to discover, model, analyze, measure, improve and optimize business processes. A business process coordinates the behavior of people, systems, information, and things to produce business results in support of a business strategy.
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Customer Relationship Management (CRM)
is a business strategy that optimizes revenues and profitability while promoting customer satisfaction and loyalty. CRM technologies allow to strategize, identify and manage customer relationships, in person or virtually. CRM software provides functionality to businesses in four segments: sales, marketing, customer service, and digital commerce.
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Data Center
is the service of a company that hosts and manages the back-end IT systems and data stores: its mainframes, servers and databases. Market and industry trends are changing the way businesses approach their data center strategies.
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Database Management Systems
a DBMS is a product used for storing and organizing data that usually has defined formats and structures.
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Digital Mockup
is a digital representation of a real-world entity or system. A digital twin implementation is an encapsulated software object or model that reflects a single physical object, process, organization, person or other abstraction.
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Enterprise Information Archiving softwares (EIA)
combine products and solutions for archiving user messaging content, such as email, instant messaging, SMS, and public & business social media data. This also includes other types of content, such as data stored in Enterprise File Synchronization and Sharing (EFSS) platforms, files, website content, and voice. The majority of EIA spending is on email compliance and retention.
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Internet Of Things (IOT)
is a network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.
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Manufacturing Execution System (MES)
monitors and synchronizes the execution of physical processes in real time involved in the transformation of raw materials into intermediate and/or finished products. Coordinates the execution of work orders with production scheduling systems and corporate systems.
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Metaverse
is a shared 3D virtual collective space, created by the convergence of virtually enhanced physical and digital reality.
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Middleware
is the software "glue" that helps programs and databases (which may be on different computers) work together. Its most basic function is to allow communication between different software.
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Open source
describes software that comes with permission to use, copy, and distribute, as is or with modifications, and that may be offered for free or for a fee. The source code must be made available.
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Product Lifecycle Management (PLM)
is a process and disciplines supported by software for managing products through the stages of their life cycle, from design to decommissioning. As a discipline, it has evolved from a mechanical design and engineering focus to application with many vertical industrial product development challenges.
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Robotic Process Automation software (RPA)
execute "if, then, else" statements on structured data, typically using a combination of user interface (UI) interactions or by connecting to APIs to drive client servers, mainframes or HTML code.
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Software As A Service (SAAS )
is software that is owned, provided, and managed remotely by one or more vendors. Vendor provides software based on a set of common codes and data definitions that are consumed in a one-to-many model by all contracted customers at any time on a pay-as-you-go basis or under form of subscription based on usage measurements.
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Supply Chain Execution (SCE )
focuses on execution-oriented applications, including warehouse management systems (WMS), transportation management systems (TMS), global trade management (GTM) systems, and other execution applications, such as real-time decision support systems (e.g. dynamic routing and sourcing systems) and supply chain visibility systems within the enterprise, as well as throughout of the extended supply chain.
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Enterprise Resource Planning (ERP)
is defined as the ability to deliver an integrated suite of business applications. ERP tools share a common process and data model, covering broad and deep end-to-end business processes, such as those found in finance, human resources, distribution, manufacturing, services and supply chain.
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Cloud
refers to servers accessible on the Internet, as well as the software and databases that run on these servers. Servers located in the cloud are hosted in data centers located around the world. The use of cloud computing frees users and businesses from the need to manage physical servers themselves or run software applications on their own equipment. There are four types of cloud computing services: SAAS (Software As A Service), PAAS (Platform As A Service), IAAS (Infrastructure As A Service), FAAS (Function As A Service)
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Success factors
Digital transformation impacts all departments. It is absolutely mandatory that senior managers are involved in this program, in order to contribute to the arbitration of difficult decisions. ​
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Based on our project experiences, the following are criteria to be added to your success criteria list, to position your organisation in a winning mood :
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Define and execute based on a value engagement model
(Value Assessment | Value Definition | Value Commitment | Value Delivery | Value Performance)
these 5 phases are composed of essential activities for defining needs, establishing value equations, constructing the roadmap, implementing proofs of concepts, defining projects and executing tasks , going as far as adopting new solutions and maximizing the power of new users
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Governance involving members of senior management
we recommend a 3-tier governance model, adapting the pace accordingly to the phases of the transformation : Executives (Quarterly-Monthly) | Sponsors (Monthly-Weekly) | Project (Weekly-Daily)
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Program/project managers
experienced in one or more areas of the scope. The specificitices of the technologies require that these managers have technical background to challenge teams, deep dive with them and make sure all alternatives to a problem are identified
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Build the "A team"
New technologies require cutting-edge expertise. Some profiles may have several technological expertises. Their stability in the project is key. Do not underestimate the complexity of the technology, applied to business process and impacting humans.
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Realistic schedules and don't believe that days have 48 hours!
The run to reduce costs pushes some sponsors to recommend (not to say impose) aggressive schedules, carrying out many (too many) tasks in parallel. The intention is good and they believe this approach will benefit the company. We must keep in mind that the complexity of the subjects, the involvement (or lack of involvement) of the people who must validate the deliverables, the versatility required of employees, etc. are all obstacles that exhaust teams. We often see exhaustion and resignation of key team members. In this case it creates immediate delays for the entire plan and the frustration of the entire organization which will not be able to keep the commitments on date nor budget.
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A trusted relationship
with partners participating to the project. Between executives, between sponsors, between project members, trust is essential. Program participants and decision-makers should not be afraid to speak out. They must know that they are listened to and respected. It can only be a win-win-win !
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We don't know what we don't know!
This seems obvious, but many programs have made unrealistic assumptions due to a lack of knowledge. The digital transformation program will affect the company culture and the humans who will interact with the new solutions and new processes. It is very presumptuous to claim to know the precise behavior of these 2 parameters.
When we don't know, we say so and we know that we will (probably) have to accommodate certain deadlines or review the scope.
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Keep communication on
setting up a program and project scorecard is essential. Stakeholders must understand the key indicators and be able to support the consolidation of progress knowing that certain statuses directly influence performance indicators. Resolving problems as early as possible often allows alternatives that no longer exist under the pressure of the last few meters.
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Do not look for the culprits but together try to find solutions
what's done is done. If it is not a question of malice or incompetence, there is no point in wasting the energy of the group and undermining everyone's morale by focusing on the culprits of a poor performance. We all make mistakes. Our strength is to bounce back and re-motivate everyone, by learning from our mistakes. A supported team will move mountains because they know that their value is recognized and it is accepted that the road to meet the deadline is not always an highway.
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Recruitment and retention of skillable/knowledgeable personnel
the proliferation of digital transformation programs has created strong demand in the market. Experts are less and less available and their prices have skyrocketed since COVID. The company will have to implement advantages to attract new talent. However, it will be necessary to be realistic and adapt... or follow the distributed budgets.