Digital Transformation Guidelines To Success

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Digital Transformation: Guidelines to Success Oct 2019 Tom Rafferty Digital Transformation: Guidelines to Success Overview Much is written about digital…
Digital Transformation: Guidelines to Success Oct 2019 Tom Rafferty Digital Transformation: Guidelines to Success Overview Much is written about digital transformation and how companies need to embrace the new digital era or get left behind. Businesses all over the world are trying to figure out what’s right for them. Whether you’re a business that runs on paper-based processes with legacy IT systems and siloed data or a digitally mature company that has it all figured out, digital transform is an ongoing continuous improvement process that every business needs to build into their strategic plan. There is no once size fits all. Each business needs to figure out their own journey and develop a plan that realises its full potential. The following are common costly mistakes that many companies make: 1. Committing to large investments and getting a result that is different to the original expectation 2. Committing to large investments without having thought through its impact or alignment with the end-to-end business model 3. Expecting the investment in technology as the only way to fix a business problem 4. Not having a proper support structure in place to support implementation of the investment This paper proposes how to begin this journey with Cofficient who have worked with several companies at various levels of digital maturity. It aims to simplify how companies need to think about and execute digital transformation ensuring that technology and software are well planned up front and achieve the desired result. Technology and software solutions, well planned, using a Lean Six Sigma approach are far more likely to succeed. Providing the right solutions the right way is in our DNA. 2 Introduction The manufacturing industry is ahead of most industries when it comes to digital transformation. For years manufacturers have been capturing data from their operations to help improve efficiency and increased competitiveness. Manufacturers are now looking at IoT devices and data mining to provide even more in-depth analysis to drive further improvements. This is necessary for survival. Those that don’t get left behind. Other industries such as Construction and Utility Service industries are for the most part beginning this journey and realise that it is necessary in an ever-increasing competitive environment. It is necessary to provide internal and external benefits. Internal benefits such as improving quality, process efficiency, cost reduction and external benefits such as the provision of new products and services. Digital transformation can be inward (process) or outward (product/service) facing: Process Transformation: creating paperless processes that improve internal process efficiency. Product or Service Transformation: creating a new customer experience in a product or service that they are willing to pay for. Eight Key Guidelines The following are key foundational guidelines that need to be built into any transformation plan to be successful: 1. Define what you want the end-state to look like. This needs regular review and adjustment. Digital transformation takes time and you need to be aware of internal and external factors that can change or adjust your direction 2. Build the Digital transformation end-state into your business strategic plan. These cannot be independent. Your business goals need to be supported by your transformation plan. It is an enabler for business growth, increased profitability and new innovative products or services 3. Build step-by-step plan that gets you there. Avoid high up-front costs and plans that take months or years to deliver. Break your plan down into manageable sizes. Start with your biggest problem or where you will extract most value and build from there 4. Ensure that you get the right balance across 3 key components: a. People b. Process c. Technology 3 Technology alone will not transform your business. You need to have the right team in place that are ready for transformation and understand the role they play. All stakeholders need to have a level set understanding of how the current process operates. Don’t transfer a poor process into a new digital platform. Poor process will always win. Streamline and standardise your process first and then transform it. Customisation is ok but unstructured it will cost you time and a lot of money 5. Ensure every step is a step towards your end goal. A well thought out up front plan will significantly increase your chances of success. You will spend less time debating it as your team will quickly see how each step contributes to your end goal. It also significantly reduces the risk of costly errors 6. Start in the right place. Many businesses have made the mistake of starting digital transformation in the wrong place, for example, by implementing automated tools to report on existing data or trying to automate connection of data sources. Key consideration is to check the quality of your data first. How accurate is the data you are receiving from your process? How quickly do you receive this data to make effective management decisions? Bad data into an IT system will only produce bad outputs. Ensure that your source data is right first time and available real-time. Then you know that all systems are built on high quality data, whether this is factory machines producing product or service teams installing cables. These are the resources that ultimately have control over your profitability 7. Don’t trying to create the end state too soon In the eagerness to get to the end state ensure that you have that right balance between driving the team and getting the right result. Moving too slow can lose 4 the support of key stakeholders and moving too fast can miss key steps that lead to disaster 8. Identify a proof of concept that demonstrate it can be done. A proof of concept that aligns with your strategy is great to get buy in from your organisation and also to delivers value from the beginning. It is also a way of testing your transformation process by transforming something small by engaging people, process and technology How to implement a proof of concept At Cofficient, we have many years’ experience in blue chip manufacturing and utility service industries. We have built highly automated, high volume, manufacturing lines and lived with the challenges of paper intensive processes where updates are slow and often lack accuracy. We also have experience in implementing lean, continuous improvement programs that help structure successful plans. Now we are a technology solutions provider that know how to create partnerships to guide businesses on their transformation journey. The following section shows simple steps on how to successfully implement a proof of concept whether it’s an app to remove a paper process or IoT device to provide a new valuable source of data. Replacing a paper process This picture shows a typical paper process for a team working in the field where information on process performance is captured on paper using clipboards and handed back to the support office for processing. This data can take days to receive, often has to be chased, can get lost, sometime illegible or missing key information. It then has to be entered into an Excel or IT system and verified. At this point a QS usually gets involved to calculate the client bill and process the invoice. Management reports take time until all this data has been processed. This can take up to 6 weeks or more in some cases. Step 1: Process map the process opportunity from beginning to end. The benefits of doing this are: 1. Level set everyone’s understanding of the process 2. Allows a clear understanding of scope 3. Engages the users to solve the problem 5 Step 2: Process map the future state process. Define what you want the new process to look like. Benefits are: 4. Level set stakeholders on what can be delivered in the new process 5. Provides a development spec for the software team to quickly deliver 6. All stakeholders feel engaged and therefore a level of ownership Step 3: Develop, test and deploy the solution In this example a simple field data collection form for dayworks or variation instruction is digitised. The app is handed to the users to provide their feedback. As users are the most knowledgeable on how the process it is important that their input is considered and valued. That way they also feel a level of ownership for the solution. The proof of concept can be stand alone or the data integrated into an existing or new ERP system 6 The benefits of transforming a process like this are: 7. Can be done within days and generate immediate value 8. Provides live, high quality data on a process that has a direct impact on revenue and profitability, reducing timelines from weeks to days 9. Can be done quickly at low cost. 10. Doesn’t require highly skilled users. 11. Business process can be corrected on time if there are issues. 12. Billing is more accurate 13. Can be connected to existing or new IT system or standalone therefore fits well with most strategies 14. Cofficient know how to connect people, process, technology to deliver support, improvement and quick results 7 Summary No matter what level of digital maturity you are at or industry you are in, Cofficient can partner with you on your digital transformation journey. We provide end-to-end business solutions including Mobile hardware, phones/tablets, IoT devices, mobile apps and ERP solutions through our partnership with Oracle-NetSuite in a fully connected eco-system that transforms source data into valuable process insights. In upcoming whitepapers, we will discuss: • How to avoid common pitfalls in digital transformation • How to get the right balance between people, process and technology to achieve project success • How do you build the right strategic plan for you • Industry 4.0 & Industrial Automation 8 9
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