Smart Industry Chronicles - Part 2/4: Building the Smart Organization
With the Smart Operating Model (SOM) in place, it is time to detail the design and plan the change journey. The first step in this process is to setup the cross-functional team that will drive and deliver the transformation.
In businesses that are immature when it comes to leveraging tech within Operations, you will likely find business people that will ask for solutions that are similar, but slightly better, than the ones used today. You will also likely find IT professionals that tend to build in complexity in the provided solutions, by not being able to understand, simplify and improve the processes at hand. Hence, you need to have the right experience and the right leadership in place to succeed with the solution design. There are three typical questions that arise in this process that are necessary to address:
Who should lead the transformation – Business or IT?
An easier way to formulate this question is to ask “who should own the future operating model and be accountable for the results that come out of it?”. The simple answer is that the business side needs to be in the driver’s seat when running all type of transformation work inside the core of the value-creating processes. However, doing this type of work is very complex and requires a well-functioning, cross-functional team to succeed. Getting the best out of both parts of the organization is necessary to get a great end-result. If we succeed with building the right team, the design will in be of high quality in the end.
Who should be in the team?
Rather than talking about what organizational titles that should be represented in the smart industry team, we should focus on the getting the right skills and level of experience represented. The common denominator that we would like to see in all team members is experience from delivering projects in high-performing operational environments. Not having this experience makes it easy to underestimate the complexity, required level of detail, risks and need for behavior shift that comes with shop floor transformations. Having done implementation work in this type of environment, on the other hand, means that you will have learned to be both detailed and pragmatic in planning and execution. Other essential skills that need to be represented in the team is:
Project management skills from shop floor transformation work
Operational excellence and smart technology expertise to lead and support the process design
Automation and shop floor IT expertise to enable a “plug and produce” architecture to connect machines to sensors and surrounding systems
Solutions architecture expertise to set integration and communication standards as well as required performance of the total solution (speed, security, redundancy etc)
Subject matter experts as required depending on chosen solution (hardware/software vendors etc)
Local project resources that will own, maintain and improve the future solution
Usually you will find that one team member will cover more than one area of expertise above. In a pilot phase, you can come far with a small team of 3-5 people, including local resources, depending on the size of the pilot area.
What typical pitfalls should we avoid?
When the team is set up, we are committed to delivering results. Getting the right people in the team is by far the best insurance you can get to make sure the timeline and budget is followed. On top of this, there are a few more aspects to take into account when driving transformation work:
Avoiding dependency on external providers (consultants, vendors etc). Running this type of projects successfully requires build-up of strong internal ownership and knowledge, to make sure you can scale and improve the solution over time. Consider hiring people for the team and plan to add resources early on when scaling the solution. Otherwise the project will be costly and run a high risk of loosing traction once the external partners leave
Avoid running too far ahead of the organization. Adding digital support to operations processes, e.g. manufacturing and logistics, is usually a quite abstract project for the business, especially in the early stages. Building understanding of the benefits and the new ways of working early on is well-invested time to create momentum and buy-in. Reference visits to top companies, a training area where employees can test the new ways of working, or training sessions that explains the future state are all relevant exercises. Without these activities there is a risk that the complexity of the change process is underestimated or that little excitement about the potential is built up
With the team a team in place and dedicated to the task we can start drafting the digital roadmap towards the future state. Coming up are the two remaining steps in how to succeed with transforming Operations using Smart technologies.