Common pitfalls in the way of digital transformation — and how to avoid them

By now there should be no doubt in anyone’s mind about the need for digital transformation in factory operations. But why do 80% of digital transformation projects fail? And which reforms must companies implement to embrace the change and ensure their operations are up to Industry 4.0 standards?

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This article listed the common pitfalls to avoid for industry 4.0 projects and gave some instructions on how to avoid them.

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Common pitfalls to avoid for Industry 4.0 projects

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Having the wrong governance structure in place

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Many operations management problems can often be traced back to inadequate project governance. Indeed, who is taking the decisions is as essential as which tools and technologies are available.

All too often, digital transformation projects are exclusively led by IT teams, meaning essential input is missing. That’s why digital transformation projects cannot succeed unless operational teams are a core part of the leadership team.

Similarly, user-centric thinking is absolutely essential, since all too often end users are misrepresented in the project team and teams do not listen to insights and friction points that end users identify. In other words, they build a solution that works from a theoretical perspective but doesn’t work for end users.
 

‍Setting the wrong requirements for project management

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While business is always the number one priority, when it comes to the project management of operations, business requirements can sometimes get in the way of operational efficiency. 

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Rather than run projects based on static requirements, project management should be conducted in a learn and agile way, involving user feedback and having operations goal attainment as its main KPI. 

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The most lean form of project management is the “weekly user demo & feedback” session which stimulates continuous iteration based on actual usage numbers and real value generation.

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Doing digital for the sake of digital

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‍Another common pitfall on the path to digital transformation occurs when operational strategies are disjointed from digital ones. Digital transformation is not an end in itself — it is there to support the company’s vision, mission and bottom line.

All too often, buzzwords like Blockchain, IoT, AI or Additive Manufacturing seep into the decision making process without there being a clearly defined problem that these technologies are supposed to be solving. 

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Leaders need to avoid implementing new technological solutions without having a well-developed rationale behind them. In other words, your business goals are your true compass — technological solutions are steps that help you on the road to your North Star.

Neglecting change management

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‍Let’s face it: nobody likes change — especially not fast, disruptive change. Yet, by involving employees early on in the change process, executives can increase cross-team engagement and commitment to innovation. This is part of what’s known as ‘change management’.

Change management also helps take into account the input of the end users of a technological solution — in our case, operations managers and teams — and prevents communications from stagnating between business leadership and operations teams.

The need for digital transformation needs to be communicated clearly and consistently from the CEO all the way down to the junior level. Only then can the business culture adapt and a culture of continuous improvement be instated.

Choosing the wrong technological solution

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It goes without saying that the success, or failure, of new technologies depends in large part on their user experience. All too often, new solutions are not intuitive to use, and thus perceived as extra workload. Successful solutions should decrease the cognitive load of knowledge workers, decreasing their stress levels and enabling them to focus on what truly matters.

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Additionally, the underlying technologies also matter. Does the technology scale beyond a small perimeter? How will it evolve as the company and its projects grow? All too often, companies acquire software solutions based on the vendor brand, rather than doing a thorough analysis of the technology’s potential and how it stacks up against other solutions.

Slow project pace at proof of concept level

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There can be no innovation without room for experimentation. That’s why companies with overly complex or lengthy processes often fail at enabling a true digital transformation. For innovation to occur, new solutions need to be deployed quickly and then tested, creating a positive iterative feedback loop.

All too often, companies fail to identify when the cost of testing is lower than the cost of analysis — not to mention the added fact that it is highly frustrating to work on projects that last for years when value can already be created in weeks. 

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In a nutshell, rather than developing expensive and time-consuming solutions for bigger projects and perimeters, companies should first test new technologies on a small pilot scale, draw lessons, and apply only those strategies that prove successful.

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Flawed procurement processes

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Traditional procurement processes leave much to be desired when it comes to innovation and digital transformation. By forcing managers to fill in long lists of requirements and guarantees, they create risk-averse behavior that hampers innovation. This is all the more problematic given that such guarantees cannot be provided for solutions that have only recently been developed.

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Furthermore, traditional procurement requires technological solutions from at least three different vendors. This creates roadblocks for innovative solutions that might be the only ones to deliver a specific value proposition on the market.

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How to successfully digitize factory operations

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Now that we’ve identified the major roadblocks in the way of digital transformation, we can focus on how to successfully digitize factory operations. Since every factory is different, it is necessary to follow a step-by-step process for each new project.

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Define operational goal

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First, you must define your operational goal. Set clear parameters and specific problems and outcomes. Only then can you align your team on what’s really at stake.

Identify initial user group

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Next, you need to specify the initial user group and do everything you can to ensure the user-friendliness (and thus adoption) of the technology. Once these users have successfully adopted the technology, they will become ambassadors for the project as it scales in the future.

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Map existing routines

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Make sure to identify recurring questions and routines so that you have a comprehensive overview of existing ways of working and potential stumbling blocks.

Once existing routines have been mapped, translate them into usage scenarios. That way, you’re tying them to operational goals and preventing the two from becoming disjointed.

Whatever you do, avoid creating new processes, as this slows down change management, diverts resources and creates additional cognitive workload. The goal should be to make current processes more efficient — not create extra work.

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Pick the right software

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Decision makers should avoid buying software solely based on brand name or a list of features on a spreadsheet, as this likely means it will be disconnected from operational needs. Instead, software should be selected based on its capacity to address target usage scenarios that contribute to operational goals. It's not about buying features but value. 

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One way to ensure you pick the right software is to ask for demos and dig into the potential to generate value with stories from existing customers. That way, you and your teams can gain hands-on experience of how the platform works and estimate whether it ties in to existing operational needs. 

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Embed software usage in daily routines 

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Once you’ve picked the right software, the next step is ensuring it actively supports daily operations. This might take some time at first, but once the new software is embedded in existing daily routines, it will be much easier to scale its adoption and harness its full potential.

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Don’t stop iterating

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Do not stop iterating on data integration and product configuration until the product is fully embedded in your processes and connected to daily usage scenarios. Also don’t hesitate to change certain requirements if needed.

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Build a first use case

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Now everything is in place you can focus on building a successful first use case and measuring the value generated by the new software. Once your team has a solid grasp of the impact of the software, you can build a communications strategy for an internal and external audience, which could include testimonials, case studies, videos, photos and articles. At this point, your initial users will become ambassadors and evangelists for the project and help spread the word.

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Build momentum and scale

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The final step of your digital transformation is expanding usage of your newly implemented software by creating network effects between users. These network effects unlock additional value, as more scale brings more data and better efficiency across the board. Be sure to highlight value creation to accelerate momentum and user adoption by leveraging the communications strategy from the previous step.

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