How to Address Digital Transformation in Manufacturing
Deloitte’s Cloud4M is the newest and first ISV product built on Salesforce’s Manufacturing Cloud and can also help your company with digital transformation.
This blog post has been contributed to the Salesforce Blog by one of our Dreamforce ‘19 Pioneer sponsors.
Transforming your manufacturing operation to be customer-centric might sound trendy and innovative. However, due to the nature of the manufacturing business, these companies face a slew of unique challenges when embedding digital technologies.
Many are product-centric organizations rooted in physical supply and face delivery constraints that are dependent on distribution and dealer networks. So, you can see how digital transformation is a lot of work.
Customer example: Borealis lays a foundation for digital transformation
Take Borealis for example, a leading provider of innovative solutions in the fields of polyolefins (i.e. PE and PP), base chemicals, and fertilizers. Borealis partnered with my team at Deloitte to develop a foundation for digital transformation that integrated IT and business resources, and co-located teams from the start to increase productivity and agility.
To help ensure executive alignment on several key transformational projects, Deloitte delivered an incubation-style digital transformation, establishing buy-in from the start, and setting up a digital studio for long-term success. “This unique initiative will enhance the Borealis customer experience and result in the launch of new digital products, services, and solutions that deliver value for our customers and employees,” said Thomas Van De Velde, senior vice president of hydrocarbons and energy, and owner of the digitization program at Borealis.
As part of the program, the Salesforce platform provided many of the technological enablers for digital transformation including Mulesoft, Sales Cloud, Einstein Analytics, Pardot, and B2B Commerce.
How to take a foundational approach to digital transformation
From employee satisfaction to operational efficiency, a shift to digital touches all aspects of an organization. When you tack on the structural challenges faced in manufacturing, digital transformation takes additional strategy, alignment, and planning to be successful. A foundational approach with clearly mapped expectations, like Borealis did, can help guide your manufacturing organization.
1. Create executive buy-in and alignment around key strategic initiatives and a new definition of value
Simply put, clearly illustrating what digital transformation requires, what it can enhance, and defining goals and expectations from the get-go can help you get the most out of your efforts.
Leadership needs to understand how digital can transform key competitive drivers. This can be supported by establishing executive buy-in, reaching an agreement on operating model shifts, and identifying required funding.
Finding the right use cases and setting expectations with stakeholders is paramount in creating momentum and defining value creation. Areas to explore include:
- Digital extension of certain channels to expand reach, lower cost of acquisition, and improve customer experiences (e.g., online, mobile applications, AI automations)
- Emerging and new markets for products and customers created by digital
- Digital enhancement of current products and offerings (e.g., simplify order placements, translate smart data into aftermarket opportunities)
2. Define your digital KPIs for measuring maturing efforts
The way of measuring success may not look the same during and after digital transformation. Two common misconceptions are that the use of agile alone will accelerate value return and that value can be measured along traditional, already defined KPIs.
Reexamining your existing KPIs can allow your organization to achieve expected results. Methods to identify KPIs for digital transformation include:
- Select KPIs based on how they influence business decision making
- Simplify metrics so it’s easier to measure and establish a clear tie to business outcomes
- Capture leading indicators and end-result oriented metrics
- Identify metrics that are specific to your industry, customers, and digital maturity
- Keep measurements tied to unlocking value via customer-centricity
- Highlight the prevention of inefficiencies or incorrect decision making
3. Put your customer at the center of your business to create meaningful, end-to-end experiences
Your customers are already familiar with digital interactions from their everyday lives. This means people now demand customer-centric business experiences everywhere they go. By placing focus on customer experience, manufacturers can attract and advise customers earlier in the decision-making process and retain them more successfully.
Practices that help foster a best-in-class experience include:
- Go beyond asking customers what they want. Push the limits by asking, “what are the most challenging areas in their businesses that they wish there was a solution for?”
- Conduct early testing to help ensure user acceptance and solicit feedback beyond ease of use and venture towards “where else can this type of information be useful?”
- Build with the end-user when creating solutions. Creating excellent user experiences requires a solid integration landscape which incrementally builds on past versions, constantly evolving and improving the customer experience.
- Data is closely tied to customer experience. By taking a holistic view of your data, you can improve your digital products, decision making, and increase visibility into your fulfillment cycle — all changes that will exceed client expectations.
4. Build a center of excellence or digital studio for your organization
A center of excellence or digital studio can create agility within your organization and align to key strategic digital initiatives. It requires hiring and training a mix of people, implementing capabilities, and defining and embedding an acceleration process across the studio, business, and IT organizations.
It is important to define the digital studio’s mandate and scope of activities within the broader organization and ensure cross-functional expertise across creative, business, technology, and data.
Want to learn more?
The recommendations above are the steps my team took with Borealis to help them take their business to the next level. We feel privileged to assist Borealis in realizing such an ambitious program. They are setting a new digital standard for the industry, and it is great to be part of that journey.
Deloitte’s Cloud4M is the newest and first ISV product built on Salesforce’s Manufacturing Cloud and can also help your company accomplish the above and digitally transform your organization. (Request a demo now.)
If you’re attending Dreamforce ‘19, you can learn more about our approach and how we’ve helped other manufacturers with digital transformation by visiting the Deloitte Digital booth (#1320) in the Dreamforce Campground or by attending our session The Future of Manufacturing.