The 5th edition of the IDC Pan-European Manufacturing Summit took place in Dublin this year. Themed “Win Fast, Scale Fact, Innovate Big,” the two-day event set out to measure the pulse of digital transformation in European manufacturing.
About 45 manufacturing delegates from 15 European countries participated in the event, with job roles including both IT and non-IT in C-level and line-of-business (LOB) management positions. The summit, ranked highly by delegates as a place to learn about key industry trends and best practices in particular, included keynotes by end users, technology vendors, vendor-led workshops, panel discussions, and one-to-one networking sessions.
No Fear of Change
Change management was the most recurring topic throughout the summit, fueled by the results of our delegate pre-summit survey, which showed that 42% of the delegates from European manufacturing companies currently see cultural change as the number 1 challenge while implementing their digital strategy. Whether or not you agree with Harvard Business School Professor Dr. John Kotter’s statistic that 70% of change initiatives fail, delegates agreed that most people resist change in the workplace; in the case of digital transformation, which significantly disrupts an organization’s processes and operations, this resistance can hinder further acceleration.
The delegate audience unanimously agreed that fear should not be the main driver of change, and neither should change just be a box-ticking exercise. Instead, the transformation needs to start with a C-level-driven burning platform (the business imperative your organization is trying to solve) that gets people involved right from the start and answers the “what’s in it for me?” question.
To help adjust to new roles, mindsets, processes, and using multiple new systems, training of course is essential. However, there was consensus on the fact that traditional training is dead, and that companies need to become more creative about how they can turn their workforce into digital natives, and for some this means having a digital evangelist on each floor.
A Leadership Which Explains the “Why”
Leadership and executive support was another key thread that ran through the summit’s conversations, and the key here is to create commitment for results, which is what inadvertently creates shareholder value. 80% of leaders, as was highlighted in a keynote by guest speaker Peter Rosseel, director of Management Consultant Research (MCR) and visiting professor at the University of Leuven, should focus on that, and only 20% should focus on the results. The closer leaders move to the 20%, the higher the risk that they end up micromanaging, not leading.
The other aspect of leadership is that it needs to provide a clear vision of what exactly the transformation will accomplish. Our pre-summit survey revealed that a quarter of the delegates who are currently implementing a digital transformation strategy struggle with identifying short- and long-term business benefits. In other words, they lack direction and are stuck on their journey. To get the buy-in and motivation from employees and stakeholders, it’s essential for leaders to clearly and continuously communicate the digital vision, its objective, and the impact it will have on the organization. This also includes any changes that come along the way.
Not Big, But Right Data
Another obstacle faced on the road to digital transformation is not the lack of (Big) Data, but rather the lack of data quality. This is another area that calls for the authority, vision, and direction of the C-level suite which ultimately needs to set the strategy and define which data is needed in the first place. The other challenge with data is that it requires dedicated people who are focused on finding all the relevant data, securing access to it, and ensuring it’s not only high quality but also reliable, trusted, and in a format that can be used and reused. The growing interest in the area has led to the creation of new data officer roles, which, as pointed out by some delegates, highlights the fact that human intervention is still critical. And because Big Data is about empowering people, the user interface/visualization aspect of it is also key.
One delegate closed a discussion session on the topic with the rhetorical question, “”If we add more and more data, do you think there will be a time when Big Data will no longer be important?” While the answer is not obvious, we may speculate that as analytics technology becomes more advanced, we will reach a point at which we will be able to achieve more with less, and will ultimately stop obsessing over data volume/quantity.
Converge Technical With Business Skills
The acceleration of digital transformation requires a new kind of talent that extends beyond the job role of the traditional software developer. According to the latest IDC European DX Practice Survey (March 2017), the skillset most difficult to fulfil for Western European manufacturers is IT/digital, even ahead of engineering. Manufacturers will need to look for technical consultants, data scientists, software engineers, cybersecurity strategists, project managers, and many other new and emerging job roles.
However, as delegates discussed, drawing from previous experience, the convergence of technical skills with the existing business and operational skills is key, and efforts range from mentorship/coaching initiatives to setups where, for example, data scientists work in conjunction with demand planners.
Tackling Use Cases, in the Right Order
Use cases are increasingly gaining importance when it comes to the exploration of new ideas and the prioritization of tasks along the digital transformation journey, but there can be too many to choose from. It seems obvious, but use cases need to be prioritized depending on factors such as industry, customer demands, and risk factor; as one delegate recommended, the number should be tractable to ensure success. And finally, it’s worth considering a unified platform which connects all the data and helps with the enablement of use cases.
A Positive Outlook for Manufacturing
You might have noticed that we have referred to our pre-summit survey — which we used to gauge the level of digital maturity on a sample represented by delegates from large manufacturing companies across Europe — throughout this blog. The key themes summarized above speak for themselves, but our analysis shows us that the majority of companies are well underway on their digital transformation journeys. There is still more work to be done before they get to a point where they would be considered, as defined by IDC, “digital disruptors,” but if we look at the emergence of innovation accelerators such as additive manufacturing, robotics, and blockchain, where we expect increasing adoption over time, we are optimistic that European manufacturers will leverage these technologies to master the challenges ahead.
We would love to hear your comments and look forward to continuing the discussion about key trends shaping the European manufacturing industry. Please feel free to get in touch with us to learn more about our ongoing research in this industry.