Unless you’ve been living under a rock for the past few years, you’ve no doubt heard people talking about digital transformation. From social networks to the Internet of Things (IoT), to data storage and beyond, new digital technologies are forcing people to change their habits and their way of life. The same goes for companies: companies must be prepared to rethink and adjust their business models.
This is even more true for companies in the manufacturing sector. These companies must embrace the digital shift by modernizing their manufacturing methods and adopting technological tools that will help their transformation.
We’re currently living in the fourth industrial revolution.
- 1780 - The First Industrial Revolution: steam engines, running water, modern production equipment leading to increased industrial capacity.
- 1870 - The Second Industrial Revolution: work organization, mass production, major technological advances, electrification.
- 1970 - The Third Industrial Revolution: the space race, domestic electronic appliances, production automation.
- 2017 - The Fourth Industrial Revolution: physical and digital worlds cohabiting, artificial intelligence, big data domestication, affordable technologies, subscription sales model.
Just like the three industrial revolutions preceding it, the fourth industrial revolution comes with opportunities, risks, and hurdles for both the general public and companies. Until recently, we were living in the era of Web 2.0, but now we’re witnessing the first moments of Business 4.0.
There’s no shortage of people preaching doom and gloom across all sectors of activity. Many are concerned about robotization and the potential disappearance of several types of jobs and professions. However, it’s always best to stay on top of new developments to ensure that you can adapt. Although robotization and artificial intelligence may replace some specific jobs, these new technologies will also create new needs in terms of qualifications and skills. Companies will have to adapt to the new reality or face becoming outdated and considered obsolete. This is a huge management challenge for many organizations, from human resources to finances.
Industry 4.0 is likely to affect the manufacturing sector more significantly than any other. It promises to bring the rise of the “smart factory” where every machine and device will be connected by a common platform that can analyze, learn, and create value from the data collected to improve efficiency and productivity. Manufacturers are going to be able to automate repetitive processes and tackle the labor shortage head-on.
Some alarming statistics even show that the survival of companies could be at stake. If you’ve been keeping up to date with our recent articles, you might already know that:
- 89% of the 1955 list of Fortune 500 companies no longer exist, because they failed to adapt to the changing realities over the years;
- 77% of companies will compete in a new market segment in the next three years;
- 41% of a company’s income will stem from digital strategy by 2020.
The Theory of Evolution in the Digital Age
Constellation Research’s Ray Wang talks about “Digital Darwinism.” He believes that companies which don’t take steps to modernize and adopt current trends lose any chance of seeing their company succeed in the long term.
Ray Wang also blessed the digital world with a shocking phrase that’s been circulating on social media for quite some time: “Digital Darwinism is unkind to those who wait.”
Although it is becoming increasingly obvious that Ray Wang is right and companies are becoming aware of the current reality, the game won’t be won until companies are able to make the right decisions at the right time to ensure their long-term survival.
Ensuring your Digital Transformation is a Success
So, what’s the best thing you can do to adapt to Industry 4.0? How can you ensure that your transformation brings in the expected advantages? Where do you start? And most importantly, how can you be sure that your company is on the right path? Ray Wang believes that the five success factors for digital transformation are:
- Understanding your mission and aligning your transformation based on your priorities, for example:
- if one of the pillars of your company is your sales strategy, prioritize establishing a CRM.
- if your mission is providing consumer goods, optimize your logistics with an ERP
- if your business model could benefit from an online sales platform via a website, make sure that you have an e-Commerce solution in place.
- Building a culture of digital. Besides talking about solutions, architecture and cloud computing, how can we humanize the digital world? Wang suggests that you encourage a blend of skills when you’re making your choices and implementing technological projects: engineers suggesting a pragmatic and scientific approach must be able to work with creative minds that define the user interface (UI) and user experience (UX).
- Remembering that form follows function. Don’t model your company around your software and IT capacities. You need to firstly clearly define your business model and your sales chain or process. Then, equip your company with technological solutions, applications, and platforms that will support your processes without modifying their nature.
- Moving from gut-driven decisions to data-driven decisions based on measures and AI predictions. Pinpointing your needs using business intelligence is crucial.
- Encouraging co-innovation and co-creation. You need to keep abreast of innovations. Find inspiration in the models other businesses in your sector are implementing. Because after all, an open digital society is defined by transparency, sharing, collaboration and… empowerment!
How Can Dynamics 365 Help?
Industry 4.0 needs to transform and adopt new methods, create new business models, and maximize the use of technologies to support (and survive) these changes. Dynamics 365 has been aiding manufacturing companies to streamline their processes for over 20 years, and is now packed with even better tools to help them achieve more. With its multiple AI-driven applications, Microsoft Dynamics 365 empowers manufacturers to make better use of business data so that they can maximize productivity by optimizing supply chain operations, streamlining asset management, enhancing innovation, and improving customer experiences, all of which leads to one very important thing: increased profits.
So, Business 4.0 needs to transform and adopt new methods, create new business models, and maximize the use of technologies to support (and survive) these changes.
Come along to join in the discussion and make the most of our expertise so that we can help you navigate your digital transformation.