Achieving digital transformation (DX) is like trying to eat an elephant. You must take bite-sized pieces – but you must always remember it is an elephant!
The role of the CIO in digital transformation has grown as data becomes a key currency for continuous improvement. Far from its traditional position as a necessary business cost, the IT strategy is now a fundamental revenue driver for industrial organisations, placing the CIO at the heart of sustainability and growth.
CIO Challenges
For CIOs then, it is an exciting time, full of opportunity. But there remain significant challenges to overcome to be successful. Chief among the challenges are two issues. First, creating a ‘digital first’ culture and getting buy-in from senior management, and second, the related issue of proving the business case for digital transformation.
These two issues speak to the huge scope of the opportunity that exists around digital transformation – the size of the elephant. Most medium-to-large companies are already undertaking DX initiatives – but there are few who are achieving success at scale across the enterprise. This means that most companies fall into one of two categories: foundation-stage strategic implementation or pilot-phase tactical implementation (proof of concept).
Doing a pilot here or there makes sense, right? It’s like a bite-sized piece of the elephant you must eat…?
The problem for companies undertaking a pilot to prove the business case is that pilots tend to be about pass or fail. The truth is that you can’t digitally transform a company with isolated pilots – it’s the wrong starting point. It doesn’t build the right team across the business or ensure the right commitments and buy-in from the many different departments. It’s non-committal. And what’s more, what happens if a pilot fails, or underperforms? Is that the digital transformation journey over? Is that the right thing for an industrial enterprise? The short answer is no, of course it is not.
Enterprises need to commit to digital transformation from the top floor to the shop floor to be successful.
Human Transformation
It’s often said that digital transformation starts with human transformation. This thought certainly chimes with the Rockwell Automation philosophy of expanding human possibility.
A people-focused approach is important for two major reasons. First, digital transformation precipitates a culture change, so it’s important to take the hearts and minds of the whole enterprise on the same journey. Second, and as a function of this, successful implementation is about designing technology solutions to help people achieve more, not implementing technology for its own sake.
That’s all well and good, you might be thinking. Sold. But how do I get that buy-in, how do we become ‘digital first’, and how do I make the business case?
In truth, there is no easy answer, though the digital transformation process for Rockwell Automation offers important insight. As well as being a vendor of many of the automation and information technologies that can help with industrial digital transformation, we are also, of course, a manufacturer in our own right, and have been on our own DX journey, which you can read about in detail here.
Our DX Journey
What helped Rockwell Automation to get the buy-in was a plan that had the same fundaments and business goals as we always had: safety, quality, service, and cost. We asked the open question: How do we improve and even transform those? We didn’t reinvent manufacturing, or create new metrics, or new initiatives. We just asked how to do what we do better, and in this sense, digital technology was another tool to build with.
We benefitted from a strong continuous improvement culture, so that helped too. But when we put digital tools in the hands of people, we weren’t trying to change the culture, but trying to take the same culture to a new level. The lesson here is not to move too far away from your core principles when considering your transformation journey – keep doing what you do so well, but do it much, much better with digital tools.
There are often foundational things that need to happen, whether it’s with your network, or your security, or your data integration, and sometimes they are hard to justify because they are foundational and they help to enable what you will then do in the future. And this is about really understanding what your company goals are and ensuring that you have the executive buy-in for those goals to justify the foundational requirements.
Our own digital transformation journey was about improving productivity, but what it enabled us to do (among other things) was to improve lead times. That meant we could offer better customer service by completing orders much more quickly. This sort of win might not be planned but can be huge, and immensely valuable.
Making a Business Case
Consulting companies don’t have a problem making business cases for customers to become agile factories, for example, but getting the business case converted into budgets is where it can fall apart. Perhaps, for example, the business case involves a huge cost increase in IT, blowing the budget, while there is a cost reduction over the same period in core operations. Companies undertaking a digital transformation journey need to have alignment across the silos and not compete for resources with short-term thinking.
This brings us back to where we started, the ‘hearts and minds’ point of needing the buy-in from the whole C-suite, and the whole company. It’s important to extend innovation throughout the organisation – you don’t know where the best ideas will come from. Importantly, if your biggest asset – the human one – has the tools and the ways to innovate, and bring ideas forward, they will make a big difference.
So, how do you prove the business case for digital transformation, create a digital-first culture, and get buy-in from senior management?
Get out of “pilot purgatory” (remember, it is still an elephant). Get the connectivity and security foundations in place. And, most important of all, view your digital transformation through the lens of human transformation and human possibility.
Learn more about navigating the road to a successful digital transformation at the Management Perspectives hub. There, you’ll find insights and expertise from Rockwell Automation, our customers and our partners, helping you to unify your people, processes and technology and achieve better business outcomes.
Published May 26, 2021
