Written by Rich Dale
29 09 2021

How to Develop a Digital Transformation Strategy for Your Manufacturing Business

A failed digital project could set your business back months. Avoid the pitfalls by gaining clarity on your objectives and ensuring you have team buy-in.

Reading Time: 5 minutes

Every company that aims to digitally reinvent itself faces one major concern above all others: that the transformation strategy may ultimately fail. Those fears are not unfounded. According to the Everest Consulting Group, as much as 70% of digital transformation projects fail. Such failure equates to significant time and resource losses and makes it all the more difficult to implement other digital transformations in the future. However, these failures happen primarily due to ineffective strategies. This article will describe some of the more common pitfalls encountered during digital transformations and outline what is required to develop a successful digital transformation strategy. 

  1. Define business objectives

The first step of any digital transformation project is to fully understand the underlying purpose of the transformation itself. How will it help the company achieve its long term goals? The best way to quantify this is to list a set of top-level business objectives that need to be solved or achieved by a new system. This list should highlight why existing business processes cannot achieve the objectives and help set the groundwork for the next steps in the transformation drive. Some examples of typical objectives are listed below:

  • Increase profitability or reduce waste from inefficient processes.
  • Improve remote working by streamlining the business process and making it more accessible.
  • Future-proof the business and potentially set it up for a future sale once all the important KPIs are accessible.
  • Consolidate the company’s information into a single source and eliminate dependence on disparate or incompatible CRM and MRP systems.

“We got to the size where we absolutely needed a system. Spreadsheets were never going to do it for us.” 

Dennis O’Hara – Chairman – Photonic Measurements

“We wanted an end to end process management from enquiries to order fulfilment.” 

Julian Athawes – MD of Halomec

  1. Secure stakeholder buy-in

The move to a new system is very likely to fail if all relevant stakeholders don’t first understand and buy into the model. Upper-level decision-makers are often unable to predict all the ways a new system will impact different departments, roles, and existing processes within the company. Engaging with all stakeholders helps paint a clear picture of the existing interactions and relationships between various steps in the business process.

All the relevant personnel need to be engaged and aligned with the digital transformation strategy’s goals early in the process. New software typically should not be selected during this stage; the purpose at this point is to define what each stakeholder will need from the new system. This granular level of detail coupled with the topline business objectives helps round out the requirements for the new system and helps all parts of the company benefit from it. 

“We got some outside help to define the issues we had and also to engage with all of the key stakeholders across the business.” 

Julian Athawes – MD of Halomec

  1. Map out the business process

Once the team has been convinced of the benefits of implementing a digital transformation strategy, the next step is to map out the entire business process. Most companies will already have mature processes in place. These may be integrated into existing MRP software and CRM systems or may simply be sets of procedures that define the business process and data-capture methods. 

The best time to refine or update these processes is during the implementation of a digital transformation strategy. Processes will be changing to fit the new architecture anyway, so additional improvements — even if they don’t relate to the digital strategy directly — will fall into the new learning process that’s happening along the way. New or updated processes should be mapped out and reviewed by all stakeholders. Doing this will highlight current pain points in the system and give the relevant experts a chance to optimise or replace them with better processes.

At the end of this mapping work, the top-level requirements developed during the last two steps will evolve into a more practical list of granular requirements for the new system.

“We started by driving requirements and understanding what it is we really needed from a sales order management and production management side to MRP.” 

Oliver Caunt – MD – JCS Nuclear Solutions

“Walk through the process and look for areas that can be improved or removed and then you can automate.” 

Dennis O’Hara – Chairman – Photonic Measurements

  1. Selecting an implementation lead

Once the requirements are understood, a person must be selected to drive the implementation of the digital transformation strategy. This person needs to have a comprehensive understanding of how the business operates, as well as the necessary authority to implement changes as per the defined set of requirements. In addition to this, the leader needs to have a thorough understanding of existing systems in order to best leverage them in pursuit of the defined objectives.

  1. Testing and comparing available tools

Only after the previous steps have been completed can the new software tools actually be chosen. Trying to select the tool at the beginning of the process will result in a disjointed approach to the problem and may force the company to adapt itself to a tool that doesn’t fully match its needs. That just makes a failure in the digital transformation strategy all the more likely. 

It must also be understood that no tool will meet all possible requirements and some trade-offs may need to be made. Generating a shortlist of tools for trial and analysis is a good way to see the full breadth of potential solutions and understand their strengths and weaknesses. The trial phase consists of the following steps:

  • Refine requirements: The requirements should be clear after working through phases 1-4. However, they may need to be refined in light of the selected software systems’ capabilities.
  • Real-world data: To perform realistic tests, it’s important to have real-world data ready to integrate for testing. Actual business data will generate the most accurate test.
  • Simulate: The final step is to test the various solutions. It is a good idea to isolate the tests and keep day-to-day company operations separate. For example, Flowlens software has a sandbox mode where data can be uploaded and the functionality of the software can be tested without risking business operations.

All stakeholders need to be involved in the above-mentioned steps and they need to have some hands-on time with each system. That’s the only way they’ll fully understand what each one brings to the table.

“The single most important thing was to allow the team to choose which system to go with.” Dennis O’Hara – Chairman – Photonic Measurements

  1. Implementation

Once the system has been selected and all stakeholders are happy that it will have the best chance of achieving the stated goals, implementation can begin. The time required to fully implement a new system should never be underestimated nor should this phase be rushed. 

It must be noted that despite the testing done in phase 5, there will always be unforeseen challenges when integrating a new system. Changes may need to be made to existing business processes to best suit the new system’s functionality. This is why it is important to implement these changes in a structured manner by adding business processes to the new system one at a time and allowing each one to reach full functionality before moving to the next one. This may draw out the digital transformation strategy’s timeline, but it’s a low-risk method that makes success more likely. 

”To help us grow we required some more strict processes right through the whole of our business.” 

Julian Athawes – MD of Halomec

To summarize

A properly designed digital transformation strategy can have a wide range of benefits such as time savings, simplified workflows, simplified data capture, and better customer retention. However, planning is essential to successful implementation, so care must be taken to define the requirements, align the team, select an appropriate person to lead the change, thoroughly test available solutions, and finally implement the system in a manner that poses the least risk to the business.

To learn more on how our expert team can help you implement the Flowlens system into your business, contact us today.

“It (Flowlens) really streamlined our effectiveness and our ability to work effectively.” 

Julian Athawes – MD of Halomec

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