Why Manufacturers Need a Phased Approach to Digital Transformation

Those that succeed with this difficult work break it into three stages, each with its own guiding metrics.

- Nitin Joglekar, Geoffrey Parker, and Jagjit Singh Srai

AS COMPLEX AS DIGITAL TRANSFORMATION CAN BE FOR MANufacturers, leaders in that sector tend to view it as a single process, the success of which can be demonstrated via a single metric: return on investment.

Such a simplistic view belies what’s actually involved: investing in and mastering new operational technologies (OTs), reskilling workers, keeping capabilities in sync with external supply-chain partner infrastructures, and enabling new digital ecosystems for partners and customers. Digital transformation for manufacturing differs substantially from transforming IT services or implementing e-commerce because it requires combining the staged integration of physical assets with digital technologies. For these and other reasons, many manufacturers struggle to adopt transformative tech and end up misaligning and wasting their investments or misdirecting their scarce specialized resources. As a consequence, their digital investments generally fail to enable the business transformation they seek.