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Why Digital Transformation Fails: 5 Mistakes to Avoid

By: Ben Baldwin

November 30, 2021

Why Digital Transformation Fails: 5 Mistakes to Avoid

Why digital transformation fails is a common question… but it really shouldn’t be.

Digital transformation and Industry 4.0 have brought the manufacturing industry into a new era where businesses intelligently connect and automate their systems. It has allowed companies to move away from manual processes and acquire powerful data and knowledge. In the modern era, digital transformation is essential for business growth.

So why do some digital transformations fail?

It comes down to two main components:

  1. Poor planning and a lack of sufficient intention
  2. Misunderstanding the impact digital transformation has on the people, the companies, and the industry.

Sadly, some manufacturers fail to experience the full benefits of digital transformation for these reasons. Ultimately their efforts fall short. So then, the questions must be asked: how do we avoid the common mistakes that plague the industry?

5 Reasons Why Digital Transformation Fails and How to Overcome Them

When embarking on a digital transformation journey, there are 5 common pitfalls that you need to avoid. These pitfalls complicate your operation and ultimately contribute to an ineffective digital transformation.

But the good news is that these problems can be solved or completely avoided with a little bit of knowledge and preparation. Let’s discuss the 5 reasons why digital transformation fails and how to overcome them with accurate planning, safe practices, and powerful tools.

1. Changing Too Much at One Time

incremental approach

With the amazing results and connectivity achieved by Industry 4.0, it may be tempting to dive headfirst into the digital transformation pool. But pushing to transform your business in one fell swoop can lead to severe resistance from people and areas not ready for a complete transformation.

It is better to start with specific areas that will benefit most from a digital mode of operations. This can be accomplished through several methods:

  • Cut out paper in specific areas: This can be done within any sector of your business. But try to start small and not bite off too much at one time. If transportation workers have smart devices then this can be a great area to cut out wasteful paper activities. Areas like payroll are also great places to start a paperless system.
  • Employ digital work instructions for a few key processes: Taking a gradual approach to digitally transforming your operation will enable workers to progressively get used to the big changes that are about to come. Once this is done, you and your team will have gained a greater perspective on what digital work instructions can do, how it can strengthen the workforce, and what data points you’ll want to track.
  • Incrementally connect and trace specific data: Choose specific KPIs and metrics you want to track and add more as time goes on. This will allow you to focus on the most important data from the specific areas you’ve implemented your digital software.

Just as Industry 4.0 is a constantly evolving mechanism, so too is your digital transformation process. Take the time and learn as you go. You and your team will discover more as you progress through the process and analyze your data. You will realize which components truly help your company and how to implement effective and long-lasting improvements. As these areas experience success, you’ll be better equipped to push this technology forward. Taking a slower and incremental approach will help you gain support from workers as well as your superiors.

2. Copying Processes Instead of Transforming Them

This can be a tricky one but it is essential to avoid. As we stated above, you don’t want to change too many areas of your business at one time. But digital transformation is still a big change. Sometimes, we can get bogged down with the idea that a process should be done in the same manner as it was before. But this seriously harms your success in the future as it prevents your ability to continuously improve or innovate.

Digital Transformation should not lead to a digital copy of your previous processes. For this reason, it is important to focus on the second word in the term: Digital Transformation.

Many companies will simply make their process digital without transforming the operation. Verbatim copies of processes and procedures lead to stagnation whereas transformation is flexible and leads to growth. If you make an exact copy of what you were doing (but now on a computer screen instead of paper), has there been any growth or progress? Copying processes is a key reason why digital transformation fails.

To get out of this rut, it can be useful to ask yourself this key question:

With the new technology and knowledge of the era, what would I do differently?

If you moved away from paper processes and implemented a digital system, would you use it to do the same things you had always done? Of course not! The point of digital transformation is to innovate and grow in the competitive market. The potential of Industry 4.0 is seemingly endless and manufacturers should seize the opportunity for their products, their workforce, and their bottom line.

Implement the best process your company, your technology, and your knowledge can offer. This may require a dramatic change, but that’s why you’re only digitally transforming one area at a time.

3. Failure to Plan

You may be familiar with the saying: “If you fail to plan, you plan to fail”. This expression is especially true for digital transformation. When implementing industry 4.0 technologies, you need a clear goal; one that outlines the specific areas that need improvement and how your digital transformation will occur.

All too often, companies push towards new digital technologies and systems without establishing a smart strategy. Soon afterward, they are overwhelmed by the vast amounts of data that come pouring in. With sensors picking up machine health, process speeds, worker efficiency, power consumption, and more, it can be tough to focus and improve on any one area. This is a key contributor to why digital transformation fails. There’s simply too much to take in all at once.

make a plan

Start by creating a clear goal and strategy. What area needs improvement? How will data be collected? Identify the core components of these targeted areas and pull the specific data you need. Create a comprehensive plan that enables you to pinpoint the right data and find the best solutions for your business. Gathering the right people connected to these systems and processes will enable you to gain valuable insight into the key indicators that affect performance.

With a thorough plan that identifies the key data you want to gather and the areas you want to improve, then you and your team can focus on your goals and take hold of your digital transformation.

pro tip

Pro Tip: People are generally at the core of any process. For this reason, a worker-centric MES is one of the strongest ways to collect data from your operation.

4. Inadequate Security

Along with the benefits of digital transformation comes the unique challenge of cybersecurity. In the current era, cyber-attacks are more prevalent than ever.

Sadly, many manufacturers overlook their security needs, hoping for the best outcome. And this attitude, especially when it comes to security, is a key contributor to why digital transformation fails. But if done right and not overlooked, keeping your data safe can be quite simple.

As we discussed in our previous point, failure to plan and prepare will inevitably lead to an inadequate digital transformation. We could simplify this and say that cyberattacks have the greatest impact on companies that are not prepared for them.

So, how do we prepare for them?

One of the key methods of combating cyberattacks is human intelligence and comprehension. More than 90% of cybersecurity risks stem from human error such as downloading malware or giving out information to phishing emails. Training employees to identify potential breaches in security will enable you to almost completely mitigate the risk of cyberattacks.

Adding to this, use systems and tools built with security in mind. With our digital work instruction software, your intellectual property is kept safe through the use of Access Controls, Trusted IP Logins, Electronic Signatures, SSO Authentication, and various levels of encryption. This level of digital security enables companies to comply with trade regulations such as ITAR (International Traffic in Arms Regulations) used by the DoD (U.S. Department of Defence).

By using intelligent tools and training your employees, your company’s digital transformation is strong and resilient to modern attacks.

5. Going Alone

When it comes to adopting digital operations, it would seem logical for you to create a system that is tailored to your specific needs. Who else would understand the exact requirements of your organization? But this logic does not match the reality of fast-paced modern manufacturing.

Creating a digital transformation solution takes a lot of time and money with even more effort and planning. Instead of pursuing digital transformation alone, take advantage of the innovations and experience of the modern manufacturing industry and push forward from that point. Standard solutions have already been tried and tested, making them easy to use and mold to your needs.

Additionally, digital transformation is not a one-off process. Like Industry 4.0, your company is constantly evolving. By using a system that scales and grows with your business, you are better prepared for your current and future needs.

With an already established solution, you maximize the efforts of your workers, processes, and technologies over the long term.

Take Hold of Your Digital Transformation!

take hold of your digital transformation

As with any company transformation, it is always advantageous to be proactive and not reactive. The key component to avoiding the reasons why digital transformation fails is to take control and create a clear strategy with long-lasting goals and objectives that truly benefit you and your team.

Our work instruction software provides you with the knowledge, insight, and tools to efficiently conquer your digital transformation. With VKS, you are connected to your workers, your machines, and your processes, allowing you to seize a smarter digital transformation.

Curious to learn more? Book a demo today and see how an effective Digital Transformation can benefit your company!

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