Digital Thread • April 7, 2020

5 Ways to Determine Success Metrics in Digital Transformation

iBase-t Experts

success in digital transformation

When pursuing a goal, the first step is to identify what success looks like. As they say, how can you know where you are going if you haven’t taken the time to set a course? LNS Research recently conducted an in-depth study of the factors that separated aerospace and defense (A&D) companies that have been successful with their industrial transformation programs. From reading their findings, several conclusions can be drawn from the data, including how you can best measure success in digital transformation. 

Those organizations deemed “leaders” excelled in these five ways – these attributes might, therefore, be important to include in your success metrics of how you measure industrial transformation success.

Do More 

The first characteristic that becomes abundantly clear is that the organizations embracing more projects as part of their digital transformation strategy tend to be achieving greater results. This isn’t something that should be shocking to hear. If you go after more initiatives, there is a higher chance more will be successful, leading to a greater ROI on that investment. 

Some might think it is a lower risk to only go after a quick win, such as by targeting low-hanging digital “fruit.” With that first win might then come justification to do other projects. Successful companies, however, think differently. They choose projects with a broader functional scope, a wider-ranging focus, and with bigger overall gains in a shorter period of time. Essentially, they are going “all in” with their approach and allocation of resources.

One example of such a goal might be to better engage with suppliers and customers in joint initiatives to extend gains across the entire value chain – from suppliers to end-users. This measure of success in digital transformation might include setting up a digital ecosystem capable of bringing together both suppliers and end-users, delivering the potential to both increase customer satisfaction and reduce costs, a powerful combination.  

Read more on this topic here: Create a Digital Ecosystem by Taking a Cue from the Tech Giants.

Top and Bottom 

Some seek to implement digitalization from the top down. But they sometimes bog themselves down with big-bang projects that take half an eternity to execute. Others hope to avoid this fate by adopting a bit and piecemeal approach starting at the bottom and gradually working up. 

A bolder strategy is to embrace both. Yes, executive support is needed, but it also takes subject matter expertise from plant management and staff to ensure success. By involving every level of the organization chart, digitalization projects can be tailored to achieve immediate results while dovetailing with an overarching strategy that brings about end-to-end transformation. 

Focus on Business, Not Technology

There are many who extol the virtue of implementing a specific technology. But many companies make a mistake by either choosing a technology and then trying to adjust their digital transformation planning around it, or by choosing a vendor based on what existing agreements are already in place. In some cases, years are wasted along with a lot of costs with no results based on these fateful decisions. 

Transformation can come from many ways, such as being enabled by innovation, a new business model, or a new process, system or technology. Stay focused on end results. Attaining overall business objectives must always remain top-of-mind when you measure success in digital transformation. 

Limited IIoT

Industrial Internet of Things (IIoT) applications are growing in popularity. But if they are implemented piecemeal without being regarded as just one element of a broader digitalization program, trouble can result. Yes, IIoT is an important strategy. But it must only be regarded as one facet of digital transformation, as an enabling technology that is part of your overall business strategy. 

Seamless Integration – Such as With a Digital Ecosystem

Digital transformation demands a strong foundation capable of bringing together both IT and operational technology (OT) systems. It engenders a high degree of commonality across plants that can simplify the implementation of best-in-class applications. Becoming a digital enterprise is a critical requirement of being an agile organization that can respond quickly to change while remaining diligent in implementing process improvement and operational excellence as a sustained strategy. 

The good news is that solutions now exist to achieve each of these objectives – the leaders have proven this by achieving their leadership status. Such systems can establish digital continuity from divergent data streams across the enterprise. If you have already achieved these milestones, congratulations on achieving your leadership status! For everyone else, now is the time to catch up. As is the case with innovation cycles, best not to get too behind, as the rate of advance tends to accelerate as new opportunities for business growth are unlocked by tomorrow’s digital enterprises.

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