The ability to deliver a measurable return on tech investment quickly (and to the satisfaction of internal stakeholders) is the number one concern for 64 percent of decision-makers when it comes to digital transformation initiatives. However, we know that, all too often, digital transformation desires don’t translate to reality.
When you consider the layers of complexity that exist in aligning and executing a digital transformation strategy, it’s easy to begin to identify numerous areas where the best of digital transformation intentions can go awry. But in striving for ROI, it’s worthwhile to examine the best practices and lessons learned of those who have already paved their path to success. With that in mind, here’s a collection of insights gleaned during Future of Field Service interviews that shed light on some of the defining traits of digital transformation done right.
#1: Eliminate Siloes
It is absolutely imperative to understand that digital transformation success hinges on an aligned, cohesive, and collaborative approach. The elimination of siloes between business and IT functions – as well as an overarching view of the digital future of the company – is essential. Digital transformation cannot be accomplished within functions or in the presence of siloes – it requires a company-wide agreement and effort.
Pekka Nurmi, Director of Corporate IT at Cimcorp, and I discussed this during his podcast interview. “I had a fantastic discussion with one of my colleagues from another company regarding this exact topic, and we were thinking, okay, 10 years ago how we would have solved this item at the time?” he says. “And we would have selected really dedicated IT people. Now, the business is much more involved and should be much more involved. It’s not like the IT side has become any less important, but today you have to solve the IT and business sides at the same time. This is the core change that has happened in the last 10 years.”
#2: Define Your Guiding Principles
A major barrier to digital transformation success is that it can be easy to veer off course or become distracted, even if those distractions are born of additional opportunities. When you allow scope creep within your project, ROI becomes increasingly difficult to achieve. This isn’t to say you cannot evolve your digital transformation efforts and add additional capabilities, but rather that you must clearly define your guiding principles so that you aren’t continually pulled out of focus.
Katie Hunt, Service Operations Leader at APi Group discussed the importance of guiding principles during her podcast. “Guiding principles exist so that, as the inevitable ebbs and flows of the project occur, you know exactly what to stay focused on,” she explains. “We had four that we outlined to ensure everyone was aligned. The first was maintaining focus on end user needs. Our second one was being open to changing processes. The third one was leveraging the ideas and suggestions of our steering committee. And then the last one was valuing time over process changes, which was us saying that our go live date needed to be met and viewed not as a stopping point, but really as something we could continue and use as a springboard to keep developing upon.”
Guiding principles won’t look the same from company to company and are meant to be unique. The point is that you, as an organization, should know what is most important to you – your ‘why’ for the initiative – and you should develop these principles to help you stay focused on those overarching goals. Otherwise, you will inevitably get off course as challenges, curve balls, or new ideas come into play.
#3: Set the Stage for a Data-Driven Future
One of the goals for most companies’ digital transformation efforts is to create a stronger foundation for the world’s data-driven future. Data has become the most valuable asset for many businesses, not only for internal decision making and optimization but as a customer value proposition and tool of differentiation. As such, you want to be sure that you are putting a digital foundation in place that will support your long-term data goals.
Gyner Ozgul, COO of Smart Care Equipment Solutions discusses how the company has set the stage for a data-driven future with its pragmatic technology selection. “Looking at our future vision, we wanted to make sure we had a partner in technology that allows us to dictate the inflow of the data. In all data reporting or monetization out there, the inflow of data is critical. IFS helps us to master the seemingly simple things first, like building labor and parts accurately,” explains Ozgul. “That seems very fundamental but believe it or not it’s easy to do wrong and provides a ton of value when we get it right. With IFS we have a simpler platform with less integrations – and every integration is a breakage point, so this improves integrity. It gives us the ability to aggregate data, which is very unique and imperative for our long-term vision. Every single work order in IFS generates hundreds of data points and over time this allows us to generate very valuable insights, which is where we feel we can drive a significant point of differentiation for our business.”
#4: Work Smarter, Not Harder
I began covering these topics in 2008 and the advancements in technology just in that timeframe are astounding. To achieve digital transformation success, and to maximize ROI, it’s important to acknowledge not only the sophistication of the technology itself but also of the ecosystem that exists to aid you in your efforts. Pekka Nurmi, Director of Corporate IT at Cimcorp, discusses this using the phrase “work smarter, not harder.”
Working smarter can be accomplished in a variety of ways – reducing the number of systems in use to achieve greater simplicity, outsourcing responsibilities that aren’t necessary to handle in-house, and realizing that you may be surprised how well today’s technologies work sans time-consuming and expensive customizations. The general idea behind much of Pekka’s message is that modern IT is more about strategy and vision, and less about execution.
“The strategy is that we are always reducing the number of the systems in house to focus on what’s core to our business,” he says. “We also look for opportunities to outsource. There is so much new stuff we have to take care of, like a compliance, information security, and embedding IT and IT processes, so we always are trying to find things that we don’t have to do ourselves anymore.” Pekka and I discussed the fact that there seems to be a desire for control and even a sense of ego that prevents companies from utilizing the vast array of resources at their disposals today, but when you let go of the need for control you can often get more accomplished.
“It’s so important to try not to over-complicate any of the processes and topics,” says Pekka. “If we look at ERP systems or software in general, they already have built-in processes, and tried out ways of working. Have an open mind that maybe somebody has found the golden egg of approaches that’s already built into the system. We’ve worked to accept what the platform enables, and we’ve been trying to channel our energy to provide value to the customer using that. The innovation in that is really about finding a platform that fits your business and then accepting that platform.”
#5: Focus on Function Vs. Speed
There isn’t a scenario in which you can just opt out of the need for digital transformation. However, you also shouldn’t race ahead based on an “us too” mentality – digital transformation ROI isn’t a box you can check. As Trond Aune, Global ERP Manager at Jotun says, “doing it right is more important that doing it first, or fast.”
I can’t emphasize his point enough, because there are hoards of companies whose digital transformation initiatives have failed because they mistakenly assumed there was a shortcut to success. There are no shortcuts and racing will only result in determinantal mistakes. A steady-paced path of digital transformation that includes building a strong technological foundation, optimizing processes and cross-functional collaboration, and amply managing change will get you farther, faster than looking for a quick fix.
“Our digitalization approach is not to be the fanciest or to utilize every digital tool that exists. We are very focused on making decisions either because it serves our customers or because it will improve our efficiency,” says Trond. “So, we are not jumping in all kinds of digitalization trends, but we are very focused on the activities we start. We pick our important areas which make us unique and that is where we focus our energy on digital transformation.”
#6: Embrace the Reality of Continual Evolution
The final common trait for those succeeding at digital transformation is an understanding that it really isn’t a transformation so much as a continuum – meaning, it’s a journey not a destination. Digitalization isn’t an effort you complete, but one you continually evolve and expand upon.
Klaus Glatz, Chief Digital Officer at ANDRITZ discusses this continual evolution in his podcast episode. “Digitalization for us is on one hand internal, so optimizing processes, delivering new solutions, helping our people to really focus on what they need to do,” says Klaus. “And then on the other hand, we are digitalizing for our customers, creating additional revenue, implementing new models, like performance-based contracts or revenue sharing models up to equipment-as-a-service. Technology offers a lot of possibilities and, even though we’ve already done a lot, we are still in the learning phase. For instance, with AI and machine learning and anomaly detection, we are still in the phase of learning and understanding how we can use them. We’ve started, but we have so much to further explore in how we can use these technologies to further optimize what we are doing.”
To avoid the overwhelm that can come with a never-ending journey, Klaus suggests thinking big but starting small. In other words, have a big-picture idea of what you’re aiming for but work toward that picture in consumable chunks. “Our mission is to develop a fully-autonomous solution. Starting from zero, it’s very ambitious. That’s why you need to have a very clear plan, which steps you need today in order to get there,” he says. “We started very small, very easy but it’s also important not to work two years in your protected environment, go out to the customers and learn you’re off. Failing is also okay. This is also something we needed. Think big and start small has been key to our success.”