It's never too early to add a useful New Year’s Resolution to your list: “I will not focus only on technology as I look for ways to deliver on the potential offered by the Internet of Things.”
The technology is certainly a key enabler….
Gartner predicts that 20.4 billion digital devices worldwide will be connected to the Cloud by 2020. Forrester Research predicts that IoT will become the backbone of future customer value “as it moves from experimentation to business scale.” Network World, in this month’s report on hot IoT trends for 2018, claims that “The exploratory/discovery phase is over, and more widespread deployment is on the way.”
… but to achieve real business benefits you need to look beyond the technology, and into the organizational changes required.
In a recent point of view from Hitachi Consulting, The Path to Operational Excellence, we highlight examples of companies that transformed their manufacturing productivity, slashed defects, improved product quality, and increased employee performance.
We’ve all had the experience of failing to follow up on a well-intentioned New Years’ resolution. But when the stakes are this high—when operational excellence is the key to improved competitive positioning, agile response to unpredictable threats, and more innovative business models—it makes perfect sense to stay focused.
The Path to Operational Excellence offers five practical steps any company can follow in the successful pursuit of operational excellence.
1. Keep the focus on an end-goal. Recognize that IoT is a means to that end. Launch the project and make the necessary investments only if the desired gains are achievable and exceed the investment by a satisfactory margin. Determine the value of the data generated by your IoT assets, and build out the business justification for specific use cases. In many instances the return can be three times the investment or more.
2. Select a digital transformation partner. Doing so can help minimize upfront costs by collaborating to co-create a tailored solution rather than off-the-shelf products and services.
3. Start at both ends of the digital spectrum. Many industrial companies have a mix of manufacturing facilities, some of them highly automated and others still reliant on manual processes and paper. A heavily automated plant might well lend itself to a fully connected IoT implementation, while significant value can be captured at the more manual operation by digitizing processes and eliminating non-value-added activities.
4. Don’t settle for the smaller, incremental results. Changing market dynamics, emerging competitors, unplanned costs from traditional maintenance practices, and increased environmental compliance standards require more nimble, efficient, and sustainable operations that stretch across the entire organization. Put simply, they require digital transformation.
5. Take a strategic approach to how the transformation should proceed. Take into account the organization’s culture, digital maturity, talent and capabilities. Some organizations have had success with an iterative approach, starting small with discrete pilot projects designed to build momentum and drive real value. Other companies, though, are skeptical of that approach, reasoning that if a pilot fails to gain traction or win sustained, visible support from senior leaders, the overall initiative will stall. They therefore aim very high from the outset with ambitious transformations that leave no area of the business untouched. Neither approach is a surefire winner or loser. Choose the path that best fits your company’s unique circumstances.
One final request: Please let me know what you think is the biggest barrier to achieving Operational Excellence—Technology or Organizational Change??
The Path to Operational Excellence Transform your organization and drive significant gains by harnessing the power of IoT to reach entirely new levels of operational efficiency.