The future of digital transformation is happening now, and it is driving the future of all industries. This article highlights just about everything you need to know about the impacts and trends involving digital transformation.
No matter where your company resides on its digital journey – or even if you have yet to start with digital transformation, this article is just for you.
What is Digital Transformation?
Digital solutions not only enable organizations to achieve new levels of efficiency through automation, but they also open doors for creativity and innovation (rather than simply enhancing and supporting traditional methods).
Although applying the use of digital technology to solve traditional problems can offer numerous business advantages, many organizations have yet to begin the journey with digital transformation.
Digital Innovation: Where to Start?
If this is the case with your organization, – don’t worry, you’re not alone.
According to a research study performed by Accenture and the World Economic Forum, 80% of executives stated they were completely convinced ‘digital’ advancements would fundamentally change and transform their industry within the next 5 years!
That’s right. Eighty percent! … And they’re not wrong at all!
In fact, digital technology has not only already begun to transform industries, but it has also started to transform the way the world experiences products. Despite the ability to recognize the effects that digital processes will bring, only 17% of the studied executives stated they had a strategy in place to address the challenge of digital transformation.
This left a shocking 87% to admit they had no current digital strategy in place whatsoever! This is exactly why, if you have not yet started your digital transformation journey, it’s important to realize A) It’s not too late and B) You are not alone. There is no better time to start than now!
Organizations are realizing the significant impacts that the digital transformation era brings and how it’s going to drastically change just about everything when it comes to the way we do business.
The Impact of Digital Transformation
The process of digital transformation is creating entirely new ways of doing business. It has begun to create new experiences for customers while adding entirely redefined value propositions for mature product segments.
This era of digital transformation has started to impact and define what products are and what they mean to businesses and consumers.
Product perceptions are changing
This means the rise of digital transformation has driven consumers to be sold by the outcome of the product – the recurring value. Manufacturers can address this shift in the market demand archetype by embracing three technology categories – Internet of Things (IoT), analytics, and mobile.
The future and advancement of technology is happening now
Established power plays and industry lines are beginning to blur. You cannot wait until some time in the near future to start your digital journey.
If your organization is going to succeed going forward, you won’t want to be left behind in this new industrial revolution, or you will fail.
Whether or not you’ve noticed if your industry has been affected yet, the key message is the effect of these disruptive technologies doesn’t discriminate one sector or industry. Every industry will see a major impact due to these digital technology advancements… And it is happening right now.
‘Business as usual’ is no longer an option. Organizations must adapt in order to survive.
The future of Digital Transformation: Smart, Connected Products
Digital transformation is reinventing products. Products from cars, to jet engines, to pumps, to heavy equipment, to medication, and more!
Machines, assets, and devices are starting to communicate, learn, and react to newly accessible context as they exchange and leverage data from sensors.
We are talking about the area of ‘living products’ – meaning transformative products that are responsive, collaborative, reactive, and responsible. Whether products are B2B or B2C, there will be a totally different process in the way we think about how our customers are using our products in the near future.
The future is now. Don’t let the opportunity slip away.
The first step in your digital transformation journey should be a strategic one. Understand where you are, where you want to be according to your current framework or understanding, and where you’d like to be as you embrace future technology and evolve with changing markets and new opportunities.
EAC Product Development Solutions would like to help you begin your transformation. We provide the people, technology, and services to make any transformation successful. The first step should be a Product Development System Assessment (PDSA). This will help you understand the opportunity that lies in front of you. Request more information on the PDSA today and start taking your digital transformation seriously.
Our Product Development System Assessment will help you start your digital transformation journey
Risk… what does it mean?
For some, it is crossing the street. For others, it is starting a company with the last of their own money, or money from an expectant and hopeful investor.
But, what does it mean for companies/customers? Ultimately, I think it drives everything at a company. For some companies, often publicly traded, risk is not an option. Everything they do must have a strong business case to produce more revenue with little or no risk. Smaller companies tend to be much more willing to take risks. Sometimes it’s the only way to get the growth they so desperately want and need. In between you’ll find many companies along the willing-to-take-on-risk spectrum.
How do you convince your company or customer to take a risk?
One way is to downplay the risk. Not a good idea. It can, and likely will, bite you in the end. No, you must address risk head on. You must out weigh the risk with the potential benefits. Show examples of success. Find and present metrics from those that have gone before you. Show the potential benefit the customer/company can recognize if they accept the proposed risk. Even after all that, you may only open the door to considering an improvement project. It does not guarantee a person or company will proceed.
You must address the risk
Address the risk head on. Show how you, or your company, will mitigate risk throughout the venture. Always keep in mind the customer’s or your company’s view on risk. It could be as simple as a loss of the investment into a project. On the other end of the spectrum could be lost customers, lost revenue, or even lost jobs. By not dismissing the risk, but acknowledging it and trying to prevent it, it shows your commitment to the customer, whether internal or external. It shows you are a partner, not just someone trying to sell an idea and run.
In the end, everyone wants to grow. Very few want to take the risks needed to grow. If you’re trying to help your customer or company grow and improve, you must prove you will do everything possible to manage risk, but not dismiss its existence in the first place.
Assessments help organizations avert risk
Are you in the process of accepting risk in order to improve, grow, or move in a new direction? We offer many solutions that can help mitigate risk — solutions and services with proven track records that adhere to best practices. We also offer a Product Development System Assessment (PDSA) and Functional Group Assessment (FGA) to help align organizations, define strategic direction, and help map the best course forward. Download our PDSA brochure or FGA brochure to learn more. Please share your experience and thoughts about accepting and managing risk in the comments below.
Does the phrase “Formal Change Control” lead to scary thoughts like “We don’t have the time to set that up,” or “We don’t know how to do it or where to start?” If this sounds like you, likely your organization is spending more time dealing with the downstream and long term repeated issues than if they took the time to outline a change control process.
While every company will vary, there are three basic phases of creating a formal change control process. Find out how to implement a formal change control process in these three phases.
- Issue or Problem Reporting
- Change Request or Approval Process
- Change Notice or Execution
Phase 1: Reporting & Logging Issues
- Provide an efficient way for anyone in the organization to report and log issues.
- Store issues in an Issue Queue that will resolved it in one of three ways:
- Take no action
- Put the issue on hold
- Request a formal change
Phase 2: Formal Change Request
- The Formal Change Request is the second stage of review that can be handled in one of three ways:
- Request more information
- Approved for further action, either fast track or Full Formal Change
- If the change is approved for further action, it typically is reviewed by a board that will do one of the following:
- Reject the change request
- Proceed to the change notice
Phase 3: The Change Notice
- At this point the change request can no longer be rejected, it must be addressed and acted upon.
- This phase can be defined as Static or Dynamic:
- If it is a Static process, the same departments and teams will be notified and responsible for executing the change
- If it is a Dynamic, a new process is developed specifically for each change
- When the plan is fully defined, typically a change implementation board review occurs.
Formal Change Control processes are simple, the added control of these processes alone could save your organization money in the long run. The possibility of increased productivity and reduced quality issues will far outweigh the initial time and resources required to get a change control process implemented.
We like to keep it simple, not scary here at EAC. For a full overview of how to design an effective change control process, download our eBook, Designing an Effective Change Control Process.
When is PDSA season?
We all know when it’s cold and flu season and what precautions to take to get back to health or at least dial down the symptoms. However, do we recognize when it’s time to conduct a Product Development System Assessment (PDSA) to get our organization back to health?
To analogize a real life situation, if someone is sick and goes to the doctor, the doctor would want to treat the immediate sickness and then propose a physical to determine what else is going on within the patient’s body. The doctor then sets a diagnosis for continuous improvement of health. A PDSA lends itself to something close to this from a product development standpoint.
An organization must first acknowledge a problem from a department stakeholder (i.e: Vice President, Director, Manager). They must obtain an understanding of how this problem effects downstream departments and create a sense of urgency that this one problem, is only one problem, and more problems are likely to be a major inhibitor to reaching goals.
Sure, organizations can operate with these inefficiencies and still make products, but we want them to know that they could make even more products or run more projects by taking part in a PDSA, which is when we come in to align an organization’s goals and measure achievement recognition through a secure and obtainable continuous improvement plan. PDSA’s are our way of measuring an organizations pain in their processes and providing a long-term solution to provide continuous improvement and maintain a healthy organization.
PDSA’s are the only way for EAC to truly understand the heartbeat of a company and the only way a customer or prospect can become a partner. Their goals become our goals for that organization.
Why would you want a PDSA?
PDSA’s are valuable for two reasons. First we, EAC, help clients to see their product development operation as a system which is a critical first step in making the operation better (i.e. more systematic). Secondly, we provide, as the output of the assessment, a set of high leverage improvement initiatives that will directly lead to increased productivity of their product development system.
Organizations may know something is not right with their product development operation – maybe for instance due to the number of recurring fires they fight – but they don’t know where to focus their improvement initiatives until they learn to see their operation as a system as opposed to a process.
The PDSA aligns a company’s business strategies and objectives to product development initiatives to determine areas of improvement. This is so valuable to be able to motivate a company or the internal champion to see how an improvement to a product development system would be tied to or contribute to a portion of the company’s objectives.
For example, an organizations objective or value opportunity is to reduce product development cost. Then we would streamline the product development system by making sure the people, process, and technology within a product development process are all working together without disrupting another part of the product development process thus taking waste out of the system enables reduction in cost.
During a PDSA, we engage with multifunctional groups within a company to extract process information and where waste is. Over and above that, a continuous improvement strategy will be set in place for the company to achieve the desired state or desired maturity level. Without an investment in continuous improvement, a one-time fix to a process or system will not sustain in the long term.
What’s so great about PDSA’s?
PDSA’s are learning events and EAC consultants learn something new with every PDSA because of the uniqueness of each client we work with. Beyond spreading our understanding of seeing operations as systems, it is exciting to be able to learn the details of the client’s operations and then provide critical improvement information.
The ability to tell an internal champion or the economic buyer that their organization is “leaking oil” or specifically being able to quantify to them the dollars being wasted, and that we, EAC are here to help reduce that and get them in a better state excites me. The ability to whiteboard the organizations processes and ask them why they would perform a certain task in that fashion. The ability to ask the tough questions, like “what is the biggest headache or challenge they have right now?” and “what is working well for you?” The ability to help the champion to present to their executive board is what is rewarding in the end.
We live and breathe to make a difference for our customers. PDSA’s are a mental marathon that test every part of a person’s attention to detail, savvy, note taking, and overall listening abilities. The challenge is what we get revved up for. We never know what we are going to find.
Today I’d like to follow up on the last couple of posts. We’ve been talking about systems thinking and knowledge management. If you can think back to the very beginning of this video series we talked about a framework, developed at EAC, for looking at product development as a system. We call it the Product Development Operating System. The foundation of this system is the Information Flow management system. The idea is to present information where it’s needed, in a timely way, inside of your operation.
Information, when presented and encountered by a human mind, has the opportunity to be converted into new knowledge. This happens inside another subsystem of the Product Development Operating System, the Continuous Improvement subsystem. The learning that occurs in the Continuous Improvement subsystem is applied in the Workflow subsystem where learning about product or technology is applied as innovation inside of product development.
The design of a system of flow, the presentation of information and its conversion to knowledge through your knowledge worker environment is a key factor in increasing productivity. When you look at your product development operation, can you see it as a system? Do you understand how the various elements interoperate? Are you getting the results that you want or do you find yourself fighting fires?
Contact us if you cannot see your system as a system and understand where your points of leverage are. We can help. We have a service product called the Product Development System Assessment. It not only baselines your current state, but it also presents a series of recommended improvements to move your system towards a more systematic operation and a healthier state. Our assessment service is designed to get you back on the road to higher productivity in your product development environment.
Contact us to learn more about how Systems Thinking and the application of our Product Development Operating System can help your organization become more efficient, productive, innovative, and competitive. Follow Bill at http://www.twitter.com/systhinking
The saying “nobody is perfect” also applies to companies because no companies are perfect. Many organizations struggle with issues like getting their processes documented and their data management under control. Sometimes it is the members of the team that manage to hold it all together and enable substantial growth. However, this approach typically is neither scalable nor sustainable.
At EAC, we have a service called the Product Development System Assessment (PDSA). In short, the assessment helps identify areas within an organization that could improve — whether it be processes, data management, communication, or organizational change. We have helped companies across the country identify areas of their organizations that may not be reaching their full potential and provide them with a personalized roadmap for improvement.
One such company, Thermos (yes, Thermos — the company that made your really cool Spiderman lunchbox as a kid), has worked with EAC to identify areas where their organization could improve. “Hot Matters. Cold Matters. It Matters,” Thermos’s corporate mantra, not only identifies with their well-known product, but also refers to their high standards of quality, safety, living green, and giving back.
Over the last decade, Thermos has experienced tremendous growth. But as VP of Marketing Julie Ryan said, “We’ve got a great team and what we’ve been doing for the last 10 years has been working. But what’s making it work is the people — not the process.”
EAC was able provide a roadmap that included implementation of a project management system. This would allow Thermos to begin building a foundation that will support and sustain growth. Because let’s face it — Hot Matters. Cold Matters. It Matters.