Digital Transition Road Map

Digitization is no Longer a Technology Issue

Digitization is no longer a technology issue but a matter of tools and processes to build trust and commitment.

2B1st Consulting is pleased to share its experience to propose you key milestones to success on the road to Digital Transition.

When Industrie 4.0 was introduced at the Hanover Fair 2014 in Germany, the industrial companies thought that “Internet of Thing (IOT)” was a matter of technology.

Therefore they approached the Digital Transition by the technology angle considering that IOT solutions should help them to offer new services and develop new business models.

Digitization-is-no-Longer-a-Technology-Issue-1

Experience has shown that most of them struggled to go further than proof of concepts (POCs), leaving their Digital Transition at square one.

In Hanover Fair 2019, the 6,500 exhibitors were showing how much the technology is no longer an issue for digitization, meaning barriers are elsewhere.

These industrial companies just missed on point: People need to be connected together before expecting the”Things” to talk together.

Thus, the barriers to Digital Transition rely on the lack of trust and commitment between the companies having to work together.

Instead of the technology approach, the road map for the digital transition needs to follow the value creation approach, as illustrated above.

Digitization is a Collaborative Process
Step 1 : Establish a New Business Model

The prerequisite to “Internet of Things” is to connect people together, that is where the Digital Transition is a collaborative process.

But connecting people together is not enough, they must be connecting through an ecosystem building trust and commitment in order to share information and create value together with the appropriate governance.

The picture below is comparing the business model of the conventional industry, structured around a value chain, and the GAFAM (Google, Amazon, Facebook, Apple, Microsoft)

New-Business-Model-required-for-Digitization1It illustrates how the companies stretched their organization to the extreme end of the value chain since the 1900s year.

If this business model has proven its efficiency to cut the costs, it also highlights how the one-to-one supplier-customer relationships makes nearly impossible to develop any collective intelligence, thus the collaborative process required for digitization.

In opposite way, we observe how the GAFAM business model does not rely on a conventional value chain, but on a network of competences, they activate or deactivate to boost their agility, capture opportunities and concentrate the entire value creation.

This comparison figures out how the Digital Transition requires first to rethink the conventional business model of value chain to establish a network of partnerships around well identified competences as a base to grow a collective intelligence.

This collective intelligence is the engine to drive the collaborative process for Digital Transition.

And establishing a new business model is the first step on the road for digital transition.

This new business model must integrate the protection of the intellectual property in order to bring the collective intelligence to fruition.

Intellectual Property relies on Data Governance
Step 2 : Switch to Data Centric Organization

Once a new business model has been established to protect the intellectual property of the partners working on collaborative mode, it becomes possible to set up a data governance.

This data governance provides the guidance for the data management, defining to whom belongs the data, where the data should be stored and protected, how the data should be shared and rewarded.

But of course, this data governance must be implemented in a consistent way, in order to maintain the trust among the partners while they activate their collective intelligence.

All the communication must be traced and recorded in order to run the collaborative process in compliance with the data governance.

With the data governance in place, it becomes possible to move the company from a “Documents Centric” organization to a “Data Centric” organization as shown below:

From-Documents-Centric-to-Data-Centric-Organization-1

The “Data Centric” organization driven by a clear data governance will ensure all parties to share the only data they should have access to, use the same data, and a continuously updated data to edit documents whenever required.

Tracing the communication is key to maintain a “Data Centric” organization on the road to digital transition.

Two Ways for the Digitization Process
Step 3 : Top – Down or Bottom – Up

Once all the partners feel comfortable with the ecosystem put in place through the new business model and the governance to manage the data, the Digitization Process can start.

Each partner is well-aware of his rights, expectations in term of value creation, and of his commitment to convert the collective intelligence into collaborative value creation.

According to the fractal structure of the Reference Architecture Model Industrie 4.0 (RAMI 4.0), there are two ways to implement a Digitization Process : Top – Down or Bottom – Up.
Digitization-Process

Top – Down Digitization aims at developing the digital twin of plant by the top end.

Highly technical and capital intensive this approach shall require to involve all the players of the value network.

This activation of collective intelligence at large scale is very ambitious, its supposes that all the partners have acquired a robust experience in collaborative processes.

In manufacturing industries where robotization is already highly integrated, the Top – Down Digitization may be considered as the next step toward the connected enterprise.

Bottom – Up Digitization is a more pragmatic approach to develop Digital Twins on the work-floor item by item.

The first item to begin with should be as simple as possible, such as a component, and involve no more than three to five different companies.

When this first Digital Twin has been achieved, it can be copied/pasted and the experienced acquired through this use case, should help the different partners to move the next level and undertake the digitization of an equipment, then a machine, then the whole plant.

This Bottom – Up approach also facilitates the digitization of the process along with the digitization of the components, equipment, machines and plant.

It also provides the partners with quick wins at low risk.

Overall, it helps to test the validity of the business model and the pertinence of the data governance before large scale deployment.

Digital Transition relies in Tools and Processes

To become effective, this three steps road map to Digital Transition supposes all the partners to use tools and processes able to:

– Secure the intellectual property in the new business model

– Ensure the traceability of the communication in the data management

– Evaluate risks and Measure the value creation while developing the Digital Twin.

Digitization-Relies-on-Tool-and-Processes

Mobilizing the collective intelligence of a company value network is not a technical challenge, it is about adopting the right business model, implementing a consistent data governance and select one either ways for the digitization process itself.

Industrie 4.0 Smart Platform®
First Online Workplace to Play Collaborative

In the road map described above to Digital Transition, Industrie 4.0 Smart Platform® offers an intuitive and secured process to convert partnerships into successful collaborative initiatives.

Industrie_4.0_Smart_Platform_Home_Page_March_3rd_2018

With this digital tool, all the communication, documents, newsfeeds and action plans are centralized on the same spot, thus you can:

– Protect the intellectual property

Team up with your value chain

– Measure the Value Creation

– Get rid of lose emails

Meaning, you can work with your partners as if you were in the same company.

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