Digital transformation can fail because of people… exactly like PLM projects

Digital transformation can fail because of people… exactly like PLM projects

One of the hottest buzzwords in the lexicon of IT and PLM vendors today is digital transformation. It is everywhere and it smells good. It smells like a new gadget and it can make you think the old and crappiest problems of enterprise software implementation such is PLM can go away.

Digital transformation is a big change in business and organizational activities, processes competencies and models to  leverage the changes and opportunities of a mix of digital technologies. It is a big shift in minds. But to make it happen is actually not a simple task. You might think the key to success in digital transformation is a selection of digital technologies. You’re wrong. Well… technologies are kinda important, but people and leadership are playing key role in the future success of you digital initiatives.

According to prediction by Christian Frei, 2/3 of companies will not survive the 4th industrial revolution. Here is the passage from the article:

The biggest threat and reason why most companies will fail to adjust and most likely either end up bankrupt, acquired, or marginalized… is their leadership mindset, which is embedded in their company culture.

Dion Hinchcliffe’s article Digital Transformation and the Leadership Quandary gives you some ideas how your digital future can fail and who is responsible not to make it happen.

The diagnoses of the reasons for implicating leadership is many and varied but essentially boils down to the reality that leadership has the most resources and control in hand, but is often lacking in digital vision and/or competency to wield these. The reality is that most leaders of large organizations today have limited experience in successfully leading either large digital efforts or enterprise-wide change efforts, and much more rarely both at the same time. While it’s likely we’ll see far more seasoned executives in this space in the next 5-10 years, that will be much too late for most organizations.

I love the picture Dion put in his article:

So, where it leaves manufacturing companies looking at shiny object of “digital twin” and saying  “digital transformation” will become the future for product development and innovation platforms? We are back in a square one. Similar to PLM initiatives failure, digital platform (or digital PLM) won’t make a difference without changes in management style and thinking about how to change organization. If an organization is divided into silos without any chance to connect into a single processes, any new technologies and digital platforms won’t save it.

What is my conclusion? There is no magical “digital” recipe. Change was a key to move company from outdated siloed processes to PLM. The same is digital transformation. What does it mean for your organization. “Digital” PLM strategy has little change to succeed if it will not be supported by people. Don’t buy new buzzword and plan how to get back to core values of words of product development process – design, BOM, change process, manufacturing plan, etc. Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.



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