Where should you start with the digital transformation effort - let's talk about that next
There is a lot of activity going on around digital transformation today.
It's kind of turned into an umbrella term that companies use to describe any effort to
employ digital technologies to improve processes, to develop definitions of their
products and so much more right. But there's no doubt that there is a lot of activity so
to kind of get some insight into, does it pay off or not to invest in these kind of efforts?
We at Lifecycle Insights conducted this study called the ROI of Digital
Transformation Initiatives. And there are some really interesting findings especially when you
look at where should you start and where do you go with your digital transformation initiative.
So we posed questions to respondents on a wide range of digital transformation
initiatives and what we then did is we separated
those respondents in a group based on how active their organizations were.
So the least progressive were, as you can see from this chart, pursued the fewest number of
initiatives and the most progressive pursued almost not quite four times as many initiatives.
A big takeaway here though is that it wasn't just people and process change. These organizations -
the most progressive in particular - pursued a lot of technologies to empower and enable those
changes to make sure that you have almost like an amplifying factor to realize value out of it.
And then over on the right this question is actually, What percentage
of your projects hit your margin targets? And what percentage exceed or are on target or fell short?
What you can tell here the way to interpret this is the least progressive you know kind of had hit
and miss. Sometimes, you can see that 35% at the top,
that represents projects that exceeded margin targets, which is good, but you can see that 37%.
that's the average percent of projects that fell short of margins.
And compare that to the most progressive down the bottom right. You can see like a 10% shift
from falling short into on target and boy that's that's a powerful powerful thing that you can...if
you can do that then your company is going to be so much more healthy from a financial perspective.
So I think this helps us answer the question of whether or not it's a good idea to invest
in digital transformation. You know we're seeing the most progressive investing a lot. Also making
sure that they empower it with technology, but also it turns out it affects financial outcomes.
You know, this is just one finding that we shared with you on this today
but we're finding good differentiation across many different metrics and key performance indicators.
So it's a good idea to invest. So the question then becomes for a lot of executives,
Where do you start? How do you get going on this? What's the right place to begin?
And then where do you take it from there?
So we have some guidance in the form of findings for that as well.
In particular we have a more granular view of what all these initiatives look like and
what the differentiation is across these least progressive, most progressive, more progressive
and most progressive groups. And what you can see, you know you look on the right, that's your most
progressive you can see very high percentages here across the board and the differentiation is clear.
And by the way this in particular is for
product design, we'll look at product manufacturing here in a second.
But you can see there's not one initiative area that is
heads and shoulders above others, right? I mean, they're they're all kind of not necessarily even,
there is some differences here and there, but you see a big shift to the right here with higher
percentages. And the same kind of plays out as you look at manufacturing - let's take a look at that.
Right, so same type of story, you know lots of activity on the right,
so good differentiation but nothing's 70, 80, 90 percent, which would indicate that's where they
started. That is the initiative area where they started and they expanded from there.
Okay, so it's pretty clear that number one it's a good idea to invest in these initiatives, there's
a payback for sure. You gotta enable it with technologies there's there's no doubt about that.
Also the findings show us that. hey there's no single investment area that is outpacing the
others, which would indicate that's one of the first ones that they invested in, so this leads
you know to this, actually, it's it's a common, you know, piece of wisdom that we've kind of seen
in PLM for some time - It's not as important where you start as much as that you get started - you
have a tight scope around what you're targeting, gain success there and then expand over time,
right, so taking a, you know, a flexible type of approach allows you to address the biggest
issues in your company and expand progressively over time and, as you do that, you get more
synergy with prior efforts, digital transformation efforts, because they can build on one another.
So that that's the takeaway here is that there's not one area where you're gonna
see guidance where you need to start here and then progress here, here and here.
It's more of figure out what your biggest issues are,
tackle that and then progress from there at your own pace.
So that's it that's the takeaway.