In the 1960s, the British rock group Gerry and the Pacemakers had a hit song called “You’ll Never Walk Alone.” The song opened with:
When you walk through a storm
Hold your head up high
And don’t be afraid of the dark
At the end of a storm
There’s a golden sky
And the sweet silver song of a lark
When it comes to digital transformation, many smaller manufacturing and field service businesses feel like they are being pressured to walk through a storm. They are afraid because:
- They think it will require boatloads of money
- They think the effort will probably fail
- They believe it will upset their customers and employees
- They are afraid they will eventually put their whole future in jeopardy
- They see it everyplace they look. (For example, here is a recent article about digital marketing)
What Is Digital Transformation?
Digital transformation is the process of adopting digital technologies in an effort to improve service delivery and business management. By swapping out older, non-digital or manual operations with digital versions, business leaders can expedite processes, encourage innovation and creativity, improve production output and efficiency, and more seamlessly run overall business operations.
The phenomenon of digital transformation is happening across virtually all business sectors, from marketing and sales to manufacturing, as executives increasingly recognize the massive value such an overhaul can deliver.
Using Modern Digital Tools
Businesses should recognize that they are already on the digital transformation path. Here is a list of some common modern digital applications:
- Numeric control
- CAD
- Additive manufacturing
- Zoom meetings
- Web site
- Thomas
- LinkedIn and other social media
- Blogs and email shots (marketing)
- Electronic invoices and payments
As a Business Leader, Why Should I Consider Accelerating My Digital Journey?
Recently, McKinsey published a survey that showed that 77% of consumers will continue using digital channels after the COVID-19 pandemic has dissipated. And consumer expectations directly carry-over to business relationships. Remember that Amazon started the quick delivery, easy-to-use website, and easy return trends that are now shaping all businesses.
You may be a large and diverse manufacturer with deep pockets who has been moving quickly with your digital transformation, or you may be a small, focused business that offers specialized products and/or services. But no matter what size business you are, you have competitors who may be further ahead of you.
Or, on the other hand, you may be in the lead. In either case, you must either try to move forward to not lose competitive advantage or work hard to gain some advantage.
Standing still will not get you any advantages.
How Should I Start My Digital Journey?
Step 1: Start Small
Focus on small projects that are low cost, minimal risk, and can be completed quickly. Remember that success breeds success and failure breeds more failures. Quick wins set the kind of tone you want to shape your business’ culture.
Step 2: Focus on Outcomes
Every project should create positive outcomes for your customers, your business, or both. Outcomes can be financial or experiential.
Here are some examples of positive experiential outcomes.
- Allowing customers to track order status creates peace of mind
- Getting a quick online quote helps customers achieve new and shorter internal goals
- Using augmented/merged reality allows your customers to perform a pre-ship inspection without having to travel to your plant and worry about catching COVID-19
- Implementing an eCommerce store where customers can order spare parts directly from the OEM (you) with no hassles is a little more complex yet has a great payback
- Installing ERP, CRM, and service management systems generally yield high paybacks but do not create quick outcomes
Step 3: Plan Future Projects
After a few successes, start planning for the bigger risk, bigger reward projects. You will be able to think about what makes sense better after you have some successes under your belt.
- Create a vision of the digital future for your business. This is critical because it help get and keep all your employees on the same page.
- Start planning your digital roadmap. There should be two main branches – internal and customer focused projects.
- Include a description of the problem you want to solve
- How you are solving the problem now (the current state)
- How you envision solving the problem in the future (the future state)
- When you are comfortable that all the projects are identified, put each branch’s projects in priority order
- Identify any dependencies (projects that require other projects before starting)
Step 4: Identify an Executive Sponsor and a Project Team
The executive sponsor should:
- Be well respected throughout the company
- Be a great communicator (internally and with customers)
- Be a good planner and delegator
- And, most importantly, have a sense of urgency. This is because in a 2017 survey of manufacturers, the survey found that 63% of surveyed manufacturers had experienced some measure of digital transformations. And that was about three years before the start of the COVID pandemic where companies started accelerating their efforts.
The project team should include a representative from all departments because you can never be sure which teams will be impacted by any project.
Step 5: Begin the First Project on Each Branch of the Roadmap
Set a series of progressive goals that reflect short term continuous improvements. Remember that perfection is the enemy of good enough and the teams should target going live with a minimum viable project (MVP) first and then continue to improve it until it is reasonable to stop.
Step 6: Collect and Use Feedback
Make sure that both internal and external customers’ opinions are collected and shared with the respective teams. And when you start seeing results, be sure to communicate them with the whole company.
Step 7: Keep Going
Continue working the roadmap and do not be afraid to make modifications since the business world is changing at an accelerated pace. Start soon, take it in little steps, build on success, and praise failure if you learn a lesson.
Welcome to the new world of digital.
Sam Klaidman is the Founder and Principal Adviser at Middlesex Consulting. He helps his B2B product manufacturing clients grow their services revenue and profitability by applying the methodologies and techniques associated with the Customer Value Creation and Customer Experience professions to assist his clients as they design and commercialize new services and the associated business transformations. Contact Sam here.
