Identifying the Value of Digital Transformation

Introduction

Digital transformation (DX) has risen to the top of strategic agendas for global manufacturers; 92% are at some stage of their digital journey. These digital projects are transforming physical processes across the value chain for significant financial gains.

McKinsey estimates digital transformation is a multi-trillion dollar optimization opportunity for manufacturers to overcome challenges across operations, workers, products, and other elements of industrial environments.

However, determining which transformations to undertake across these opportunities, and in what order, can be the difference between program success and failure. Coupled with the need to minimize risk, ensure operational continuity, and drive profitability during this transformation, the path to value for manufacturers results in a complex answer to a simple question: “Where do I start?”

For many, the overly ambitious answer has been to simultaneously tackle multiple challenges. Manufacturers on average start with eight digital pilot projects, yet three-out-of-four of these fail to scale, which jeopardizes the digital program’s funding and longevity.

This lack of successful scaling derived from choice overload decision fatigue (deteriorating quality of decisions after extraneous decision making), and analysis paralysis (overanalyzing paralyzing decision making processes) results in pilot purgatory.

To resolve complex industrial challenges, we must better align digital transformation to business value. Identifying the most pressing problems impacting financial and operational goals and measuring the value attainable from resolving them, provides a solid foundation for digital transformation.