A digital transformation to Industry 4.0

Even before the global health crisis changed the face of enterprise forever, digital transformation was soaring higher and higher on the business agenda for boards of directors worldwide. When it comes to establishing and holding a competitive edge, digital solutions can set businesses apart with improved operational efficiency and agility.

Alcatel-Lucent Enterprise has guided hundreds of businesses through their technology transformation journeys over its 100-year history and continues to welcome businesses into the digital age with ever-evolving products and solutions.

But ALE itself is no exception to this need to transform, and during the business’ own digital transformation numerous valuable lessons were learned from which other businesses can profit when facing their own journey towards Industry 4.0 and evolving to a business model which relies on data, a lean approach, agility, and continuous improvement.

The Digital Factory

ALE began with the creation of its ‘Digital Factory’ – a transformation unit with dedicated teams assigned from each department. It was the mission of the Digital Factory to pinpoint which processes required a technological transition and subsequently which tools, architectures, and frameworks were required to streamline these processes.

Essentially, the Digital Factory produced a plan of action which was implemented with agile working practises based on the ‘Try-Fail-Improve’ model. Through this strategy, we were able to learn quickly from any shortcomings and transform efficiently and rapidly.

The pillars of Industry 4.0 include interconnectivity, automation, machine learning, and real-time data. ALE was keen to implement these tools to transform our order management, supply chain, purchasing and industrial operations. And the data gather throughout has since been leveraged to improve efficiency across all processes, increasing customer satisfaction and sales.

Digitalised logistics

At the end of each successive quarter, we’ve also seen huge improvements in delivery accuracy, reduced stock levels, and more secure shipments for high-volume transactions. In the face of a global components shortage, a digitalised supply chain became vital for business continuity and ALE was grateful to be ahead of the curve when it came to tackling this challenge.

Our reliance on data, gathered through IoT and AI, meant we could forecast more accurately and make well-informed supply chain decisions as we navigated the components shortage. Data sourced at multiple points in the supply chain could be collated to create a network of integrated planning systems with advanced analytics for smart procurement and warehousing.

Though the situation remains challenging, it is no longer uncertain as our data forms the foundation of a secure strategy which is regularly reviewed in accordance with market fluctuation.

Elements for success

Overall, ALE has learned that a focused and defined strategy results in the delivery of a successful digital transformation. Below we will explore the elements to be considered when approaching a transformation to Industry 4.0 and how they lead to success.

1.) Company culture

Digital transformation is not only about changing systems, processes and operations. It is about changing mindsets and achieving buy-in on every level of an organisation. Digital transformation should take place in the context of a change in the culture of a business.

Lack of adoption is the number one reason why many digital transformations do not succeed, and that adoption issue occurs because the change is not being adequately managed on a human level. Explaining the reasons for such a change is fundamental to gaining trust and engagement from your team.

Humans are creatures of habit and often resistant to change but approaching the situation with sensitivity and highlighting how digital transformation will make the everyday work of your team easier stands businesses in good stead for an easier adoption.

2.) Blueprints

Producing a blueprint means that success can be replicated and protects against the same errors being repeated and causing delays in your transformation. By learning from mistakes and establishing what works well through a test and improve mode, a blueprint can be created and applied across different departments for a holistic transformation journey.

ALE’s Digital Factory was fundamental in analysing performance to ensure that each iteration of our transformation built on the previous lessons learned.

In building a blueprint, ALE started by targeting a specific department and transforming its processes until the outcome was successful. We then took the same approach and implemented it in other departments.

However, there must also be an element of collaboration to ensure the blueprint fits optimally in each given situation. This means making sure that skilled experts are given the freedom to transfer their skills across different teams with agile decision-making and thorough checking of outcomes to ensure that the points of value are correctly identified. This way success is more easily carried over in each new stage of the digital transformation.

3.) A hybrid environment

The most effective data processing takes place in the cloud but carrying out the shift to cloud in one go incurs numerous risk factors and short-term disruptions to operations which can be significant for both the organisation and the customer.

To mitigate this risk, ALE opted for the creation of a hybrid landscape, adding a layer of cloud services on top of our on-premise communication system to create a hybrid landscape which allowed flexibility to move from one model to another without any major losses, failed processes or downtime. This graduation to cloud meant that ALE could enjoy the benefits of cloud and reduced cost without the associated risk feared by so many businesses.

4.) Managing data

Data is power and effective data management can mean the difference between data that is pivotal to operations and data that is simply collected, stored unused and wasted.

By installing a proper database, ALE could enable automation which through analysis and merging of our databases and ongoing automation, successfully increased recurrent business through higher service contract renewal rates, more up-sales, and higher sales conversion.

These incredible results were the product of powerful data usage and better knowledge of our installed technology base. These elements also facilitated more accurate forecasting to complete a virtuous circle, all powered by data.

Final thoughts

Though it is tempting to accelerate through a digital transformation to keep pace with competitors and not fall behind in your market. Harsh lessons have been learned from this method during the health crisis, with businesses contracted to solutions which do not fully meet their needs and operations which are not really improved.

As ALE learned, success must be thought out, planned and strategised. Only then will businesses be able to truly reap the rewards of digital transformation in an organisation which understands its goals, its plan of action and its role in successfully delivering digital transformation for the business.