Smart Industry Chronicles - Part 3/4: Creating the Digital Roadmap
Having produced the new, Smart Operating Model, we have a clear vision on how to run our operations in the future. Realizing this vision will require both physical changes in the processes, as well as digital changes in IT infrastructure, software and user interfaces. All in all, we are preparing to do significant changes in how people will work, report and improve the workplace in the future.The key to success in this process is to produce a thorough plan that takes into account all dependencies between physical and digital changes from the start. The reason for doing so is that you will most likely find issues with the current digital landscape that makes it hard to realize the expected business value of the transformation without significant interventions in the current IT-systems. One example of this could be that the flow of information that is required to run the processes in the new and improved way, is hindered by stagnation caused by systems that are not able to communicate efficiently with each other. You may also find that the right data is missing, or that the capacity of the current system is too low to enable the required speed of information.
A typical case example of this was a company that wanted to transform their supply chain to a just-in-time setup in order to reduce inventory and remove waste in the material flow. Moving from a situation with maybe one or two transports going out from a supplier per week, to a more advanced setup with smart planning, consolidation through cross-docking and multiple transports per day means overwhelmingly different requirements on data, connectivity and speed. Like in many similar companies, the warehousing system did not allow for real-time inventory overview or a strong enough connection to either planning systems or manufacturing execution systems to allow the physical shift in how the process was executed.
Planning for new ways of working without doing the digital homework will cause massive delay and cost in the implementation project, and may also force the company to do quick fixes in a legacy system that should have been replaced in the first place.
The process of making the digital roadmap is quite straight forward when we have the Smart Operating Model in place. The first step is to set up the framework that we use when evaluating the current IT infrastructure. Criteria may vary dependent on situation, but usually consist of functional areas such as:
Future business requirements (what will the future ways of working require from its digital support)
Connectivity (how well we can interchange data between different systems)
Data quality (the integrity and availability of the data you need to manage operations)
Robustness of the infrastructure (reliability and availability to handle increased load and speed of data)
With these criteria in place, we can evaluate the current digital landscape and categorize it based on need to keep, keep and enhance, or scrap and replace the current systems. We will also in general find several issues with master data and lack of common data and information models when we do this exercise. The evaluation allows us to redraw the map and create the future digital state that we need to reach in order to support the business. It may of course be possible to run a smart industry pilot without doing a full scan of the digital landscape, however in those cases we still have to make sure that we select a platform that you can grow and scale over time. Doing so without a detailed understanding of how, for instance an IoT-platform, will fit into the current digital landscape is generally a bad idea.
Having done our future state digital map, we can cluster it into areas that needs to be tightly linked together, to make sure that we take this into account when prioritizing and planning the order of the digital transformation. Using the ISA-95 structure during the analysis and when presenting the future state is highly recommended and will save lots of time when explaining the interfaces to architects and business leaders. The focus needs to be on getting the flow of information in place to support the flow of material through the supply chain. Getting to the level of what data is needed to run operations efficiently allows us to get the right digital support for making informed management decisions. This, in turn, allows us to over time add decision support tools and automate decision making with AI and machine learning.
When we have the future digital landscape in place, it is time to detail the work and plan and prioritize initiatives into an overall digital roadmap.
Visualizing the journey and breaking it down into initiatives helps us communicate and explain the work we have ahead, as well as create the necessary business cases to get going with the digital transformation.
Following these steps is guaranteed to help us gear up for success: we have made sure we get the right digital support in place to support the full transformation, and we have planned and prioritized the changes to make sure we start with the right and most relevant parts of the map. We are confident that the roadmap will deliver the value that we expect and have eliminated the risk that we invest in infrastructure that will become redundant. Doing this right, we will be able to gradually separate ourselves from the old infrastructure and remove legacy applications that no longer will suffice to run the business.
The most common pitfall in the process of evaluating the current digital landscape is paying too much focus to the technical aspects of current IT systems. You may have a very robust and reliable system, but if it can’t deliver the future business need you will not make the right plan. Hence, you should always start by looking at the business functionality gaps before diving too deep into technical dimensions. With a cross-functional team in place to drive the work with the digital roadmap (as described in part two of this series), we will make sure we cover all the relevant angles of the current systems map.
Coming up is the final article in how to succeed with transforming Operations using Smart technologies. Stay tuned for our next release.