Digital Transformation

With the digitization roadmap to a truly digital company

The digitization of business processes has received remarkable attention in recent years. On the one hand, the Corona pandemic ruthlessly exposed digital gaps, and on the other hand, in view of the political, social and ecological changes, companies are being called upon more than ever to act in a more agile and sustainable way. Motivation is high enough and progress in digitization is becoming more and more visible. However, implementation is usually less based on a digitization roadmap that shows the milestones and waypoints to the goal, but rather on a salami tactic.

Digitalization in small bites poses risks

When I talk to representatives of medium-sized companies about digitization, the answer is often: Yes, we do it all the time! Examples include actions such as the creation of policies to increase the use of Office software features throughout the company, the introduction of a ticket system, or the use of a requirements management tool in product development.

This reflects a common practice of carrying out digitization projects on a divisional or departmental basis, in relation to individual tasks or sub-processes. At first glance, it often seems attractive to plan and implement projects from a departmental or site perspective, because the coordination effort is lower and department-specific solutions can supposedly be implemented quickly.

In principle, implementing demanding projects in manageable steps is a sensible approach. So does generating benefits quickly and making digitization progress continuously visible. However, the fragmented approach also carries risks: This is when the target image of digitization is unclear and the path to achieving it is not adequately described. Here, there is a realistic risk of not achieving essential goals of digitization projects. For example, not exploiting the potential of new, digital business models and thus not driving forward the digital transformation of the company. Or not using the company-wide and cross-company data treasures if the focus is only on local optimization.

The benefits of a digitization roadmap

To put it up front: With a digitization roadmap, companies can minimize the above-mentioned risks with little effort. It provides a reliable, medium-term guideline for all digitization activities in the company, aligned with a clear target image. With its different perspectives on the topic of digitization, it addresses the specialist departments, IT and management. The digitization roadmap should contain some essential information:

What is the company’s level of digitization?
The basis of the digitization roadmap is an inventory of the current level of digitization in the company. For this purpose, the existing target images, requirements, and activities in the various corporate divisions and hierarchies are reviewed. Common maturity models help to assess the company’s level of digitization.
What is the target scenario?
Once the status quo has been established, a clear, coordinated target scenario for digitization can be drawn up. The target scenario contains an overview of the future digitally end-to-end business processes as well as the future application architecture and the necessary information services.
Which sub steps are necessary?
Once the goal is clear, the next step is to define and describe the necessary subprojects. In order to prioritize the subprojects in a meaningful way, the required internal and external resources and the possible project risks are estimated. The information previously obtained from the inventory is also used to extrapolate the benefit and business potential of the individual digitization subprojects. This makes it possible to calculate business cases for the planned projects.
The project team and management are thus able to decide on the subprojects and their prioritization according to objective cost/benefit criteria, resource availability and other company-specific parameters. In this way, today’s digitization bites become defined, evaluated subprojects within an overarching context.
What is the business case?
The high degree of concretization of digitization activities, especially of the relevant business case, is an essential basis for reliable financing of digitization projects. For example, special IT project financiers offer flexible top-up leasing that adjusts the leasing rates to the expected increase in benefits. Or even the financing of internal personnel resources. With such financing models, digitization then even succeeds without any restrictions on liquidity.

Conclusion

In the past, only individual projects were often launched. Currently, however, more and more of our customers are taking advantage of strategic planning with digitization roadmaps. With little effort, they offer a reliable orientation for the digital transformation with a clear target picture, concrete business case and alternative financing options.

Successful IoT business: just a question of standards?

There are days the little things in life make me happy. When my microwave broke last week and even a repair couldn’t save it, it took me less than five minutes to solve the problem: simply selected a new model on the manufacturer’s site using my smartphone, ordered it and paid via PayPal. Three days later it was unpacked, plugged in and running. The ease of this process illustrates two things:

digitization makes it incredibly easy for us to handle even extensive processes quickly.
I didn’t ask myself whether the microwave would also fit into my power socket and whether it would meet the usual standards for radio interference suppression, hazardous substances, etc.

Anyone who has ever traveled abroad knows that this lack of concern is not a matter of course. In the case of power sockets, the right time was simply missed to ensure global standards. In the meantime, the implementation of a standard would cause so much cost and electrical waste that it is no longer practicable.

Unimaginable that something like this could happen again to our highly developed society… or could it?

Digitization is opening up new business potential. The focus is shifting from the exchange of physical goods to the exchange of information. When I buy my microwave, it’s not just the manufacturer who earns money, but also the online payment service PayPal. And that is solely through the exchange of information. Digitization is also creating the basis for new business models in industrial companies. This is shown by a recent study by Sopra Steria and the F.A.Z. Institute. More and more machines and systems are being networked via IoT platforms in the industrial Internet of Things in order to determine performance data or offer product-related services. This is a development that has taken hold around the globe and is thus giving rise to many solutions with different data models and integration options. This allows us to draw a worrying parallel to the connector mess mentioned above. Companies that want to drive their digital business forward quickly lose their orientation here when choosing an IoT solution that is suitable for them. After all, how future-proof it is depends largely on how well it can be connected to other systems and data sources.

Global standards for sustainable digitization

Serious initiatives here give hope for an international standard in the industrial Internet of Things. The Plattform Industrie 4.0, for example, has developed the concept of the management shell, which is to be understood as the digital representation of a device. It makes it possible to address machines with all the necessary information and functions. For example, I could develop an app for my microwave, interact with it, display the instructions for use, and set the power intensity or duration via smartphone. If the manufacturer of my washing machine also provides the information and functions of this device according to the management shell concept, it is no effort for app developers to integrate other devices into their application. This manufacturer- and system-independent interoperability paves the way for the future of Industry 4.0.

Context is King – virtual collaboration in product development

The past two months have given the topic of virtual collaboration an enormous boost. The Corona crisis has forced everyone to deal with this topic. And the conclusion is consistently positive!

In the first few weeks, the main task was to create the possibilities for virtual collaboration. Now it is a matter of continuing to use the potential of these possibilities after the return to “normality”. What’s even more: many companies are taking the experience they have gained as an opportunity to rethink their structural and process organization and to further digitalize business processes.

Special case product development

While common office solutions in combination with video conferencing are easy to use in areas such as administration, marketing or sales, they often reach their limits in product development. One reason for this is, among others, the high level of interdisciplinarity in this area. Many different specialist teams have to work together at the same time and on several projects. Added to this is the high complexity of the work objects, which are often developed as structures and have many different relationships with each other. In order to work together productively under these conditions, the possibilities of the usual IT tools are not sufficient.

New requirements for IT tools

Intelligent platform solutions for collaborative product lifecycle management (PLM), which enable context-related interdisciplinary work, provide a remedy here. Context-related means that all work objects are linked to each other and can be called up at any time in the work process and from any context. Analysts like Gartner speak of content collaboration tools. This means that you can navigate from one work item to all neighboring work items without having to search and ask questions. This guarantees efficient and valid collaboration, especially in distributed teams.

Intelligent platform solutions offer yet another advantage in collaboration: a common environment in which all project participants can inform themselves and view changes directly. Cross-team chat functions, so-called activity streams, support the consistent exchange of information on the current status of the project. Especially in virtual collaboration, this guarantees a continuous flow of information, which in most cases more than compensates for the lack of “office grapevine” or the meeting at the coffee machine. Gartner has a term ready for this, too, which is Workstream Collaboration.

Another key component of intelligent platform solutions is the use of integrated task boards, which allow development teams to organize their tasks independently. In the past, task lists with several hundred entries were often used. Today, task boards allow only important milestones or quality gates to be set, but leave the individual tasks within the milestones to the teams themselves. This allows an interdisciplinary, distributed team to carry out a joint weekly planning on screen in virtual sessions, e.g. via Zoom.

The main advantage of integrated task boards is the direct linking of to-do cards on the boards with the work objects. This avoids not only the time-consuming search for the appropriate work objects, but also error and version risks. These additional expenses and risks usually occur with purchased individual solutions.

Conclusion:

The Corona crisis has prepared the ground for the continuous expansion of virtual collaboration – also in product development – from now on. Product development places special demands on IT tools for efficient virtual collaboration. Especially working in context is a decisive productivity factor here. Selected intelligent platform solutions for collaborative PLM already meet these requirements today.