Critical learnings in digital transformation. 

Embarking on a digital transformation has now become a priority for most enterprises across the globe. The transition to digital technologies is often referred to as the fourth industrial revolution, otherwise known as Industry 4.0. If correctly implemented, it can bring huge improvements across multiple operational activities, giving organizations a competitive advantage. 

As a long-established business with more than 100 years’ experience in innovation, our goal was to move swiftly towards Industry 4.0. We’ve learnt a lot during our digital transformation journey, and now we want to share our experiences to help other organizations confidently face the challenges of a transition to Industry 4.0.

So, where to begin?

At ALE, we started by creating a ‘Digital Factory’ – an overarching transformation unit with teams assigned from each department. The purpose of a Digital Factory was to identify the ‘how’ of the change, implementing agile working practises based on the ‘Try-Fail-Improve’ model. As a result, we were able to implement solutions steadily and quickly adapt based on the lessons we learned from our initial processes. 

Although the tools of a digital transformation are widely available, putting them into practice can be challenging. You need data storage and protection, a lean approach, agility, and continuous improvement. At ALE, our ambition was to transform order management, our supply chain, purchasing and industrial operations. 

Any digital transformation requires a focused strategy, so we established five pillars in approaching digital transformation at ALE. We are now happy to share them and guide you through our process of reaching Industry 4.0. 

1. Blue prints

A blueprint for success comes from experience. Figuring out what works – and what doesn’t – and then replicating this approach across multiple departments. Blueprints are vital to ensure success and progression through every new stage of a digital transformation. 

ALE’s approach to the building of a blueprint is to first target a specific department and keep testing digital transformations until we reach a successful completion. Then, we take this same approach, and implement it across other areas of the business. 

2. Hybrid landscape

For businesses today, data protection is a major priority. As a result, we are seeing increasing interest in moving data processing to the cloud. However, this shift requires careful consideration to reduce the chances of short-term disruptions. Otherwise, the transition could negatively impact operations and customer services. 

Implementing a hybrid landscape can help mitigate these risks. Adding cloud solutions to existing on-premise services allows for more flexibility when moving from one model to another without any major losses or failed processes. A hybrid landscape facilitates a gradual shift to the cloud, and helps to reduce costs, all while enjoying the benefits the cloud bring. 

3. Data management

Large businesses consider data storage of the utmost importance. Those that store it correctly know there is a significant difference between accessible and pivotal data, and data that is simply collected and of little use. The data we’ve collected along the way is something that we’ve leveraged to make all of our processes more efficient and increase customer satisfaction and sales. 

We harnessed the power of IoT and AI to collect and understand data. This informed our supply chain decisions through a network of integrated planning systems with advanced analytics and smart procurement and warehouses. As the situation remains challenging, data will be key in maintaining a handle on the situation, with regular reviews of our process to ensure it is optimized to its full potential. We’ve seen huge improvements in delivery accuracy, reduced stock levels, and more secure shipments for high-volume transactions at the end of each successive quarter. 

By implementing data analysis and merging our databases to move towards automation, we have successfully reached higher service contract renewal rates, more up-sales, and higher sales conversion. 

4. Test and improve 

To ensure businesses are not at risk of making the same mistakes repeatedly as they embark on their digital transformation journeys, testing and improving frameworks is key. At ALE, our Digital Factory was at the centre of our transformation process to ensure we learned from our previous mistakes. In order to make the test and improve approach a success, collaboration must happen at every stage between transformed and pre-transformation departments. This means encouraging skilled experts to transfer their expertise across different teams. 

Another important aspect of the test and improvement processes is agility in both implementations and in decision-making processes. This way, you will avoid wasting valuable opportunities to learn, implement, and improve. 

5. Company culture 

Finally, a fundamental pillar of digital transformation is the company’s culture. The transformation is not just digital: it is real, and requires a shift in the mindset of an organization. It cannot be forced, so your people need to be onboard. 

When the human factor is not taken into account, issues will occur, and many digital transformations fail because of a lack of an adaptive mindset. Companies should not underestimate the importance of getting their teams engaged and aware of the reasons and responsibilities around digital transformation. 

A journey into no shortcuts

Digital transformation takes time. It comes with a great deal of benefits, but challenges will arise if not carefully planned and meticulously executed. At ALE, we believe detailed strategic planning is non-negotiable. We encourage companies to integrate these pillars as guidance through digital transformation while also ensuring that their teams understand the goals, implementation plan and roles they will play.