The Missing Link in Digital Transformation Strategies
6 Key Insights for Digital Transformation Success
The time for digital transformation is NOW. In fact, IndustryWeek’s survey, Digital Transformation and the Workforce, reveals that 62% of companies either have a strategy in place or are developing one.
Manufacturers are embracing disruptive digital technologies as part of their Industry 4.0 or smart manufacturing initiatives. From the Internet of Things (IoT), robotics, cloud technology, 3D printing, and machine learning to advanced analytics, manufacturers are fitting new technologies in with established applications to provide better automation, connectivity, and innovation to boost productivity and customer response.
Are these technology investments enough? Apparently not.
Our recent Digital Transformation and the Workforce Survey reveals that leading manufacturers are now looking beyond their initial focus on operational technology and its implementation to the missing piece in the digital transformation puzzle – employee enablement. These pioneers understand the enormous potential of technologies for operations and employee enablement, they are already investing in their workforce, and they expect to report dramatic financial improvements as a result.
Registration is required for full access to this report to learn about the barriers, benefits and expected financial impact from manufacturers who are moving towards digital transformation.
“Digital Transformation is imperative in today’s business market. Disruption will continue to be an increasingly common occurrence in the next few years, and companies unable or unprepared for those changes will quickly fall to the bottom of the pack.”
Top 10 Trends for Digital Transformation in 2018 – Forbes
KEY INSIGHT 1
Digital Transformation Barriers
Manufacturers of all sizes and across every industry have jumped on the digital transformation bandwagon. In fact, the survey revealed that 65% of companies plan to implement digital transformation initiatives in the next 2 years, and smaller companies are moving even faster. It’s no wonder, with respondents expecting the following top benefits of digital transformation:
- Higher productivity
- Faster response to requests, changes and customization
- Better supply chain and operations visibility
- Improved business decisions
- Real-time access to information
- Closer collaboration with customers and suppliers
- More efficient workforce management
To achieve these benefits, manufacturers must overcome the barriers to implementing digital transformation initiatives. It’s not shocking that respondents rated technology cost as the top barrier, but, as shown in Figure 1, the fact that workforce skills and resources came in a close second illuminates the critical role of the workforce in digital transformation.
Figure 1: Barriers to Digital Transformation Initiatives
KEY INSIGHT 2
Workforce Investments MIA
It’s clear that preparing the workforce for Digital Transformation is essential, but the corresponding investments are not keeping pace. Attracting, developing and retaining a skilled workforce continues to be a struggle.
Figure 2: Employee Investments
Rating=4 Rating=5 (Significant Investment)
Some manufacturers are prioritizing training but they still don’t have the necessary job support technology. That’s why job support technology jumped significantly as compared with 2016 — and is now fourth on the list with 40% of respondents making significant investments. This jump highlights the huge opportunity to look beyond improving production processes or customer communications to leveraging digital technologies that enhance the employee experience.
Viewing and Investing Differently in Digital Transformation
There is a group of manufacturers investing more strongly in their workforce. These pioneering companies are making significant investments (level 4 or 5) in at least five of the 10 areas in the chart above. These companies make up less than a third of the response base, yet show a path forward for digital transformation. This spirit is evident across industries and sizes of manufacturers.
Strong Investment, 31%
Weak Investment, 69%
Manufacturers do acknowledge that their workforce is key to success. Case in point, the 2018 National Manufacturing Outlook and Insights report from the Leading Edge Alliance (LEA) and EKS&H indicates that manufacturers regard talent as one of their top 3 priorities along with growing sales and cutting costs. And one-half the companies surveyed expect to increase hiring despite a labor shortage being their top barrier to growth.
“For organizations to scale digital projects will require a shift in how they approach culture and talent. Companies need to instill ‘digital dexterity’ in workers, which requires being agile, analytical, innovative and creative.”
Tina Nunno, VP, Gartner
KEY INSIGHT 3
Employee Enablement is Key
Digital transformation requires the inclusion of a number of high impact employee enablement technologies. Data-driven performance insights and real-time analytics and KPI dashboards top the chart. As Figure 3 illustrates, most respondents believe they are important to both drive higher productivity as well as speed response to customer requests and changes, their top desired outcomes of digital transformation.
Automated alerts to inform employees of required actions and data visualization that helps employees focus on what’s most relevant also scored high. From real-time projections that help detect compliance risks to one-click actions that simplify employee tasks, it all adds up to improved efficiency, better decision-making and higher employee engagement.
Figure 3: Employee-Enablement Technologies
Rating=4 Rating=5 (Essential part of our initiatives)
The survey shows that companies have realized employee enablement is the missing piece of the digital transformation puzzle. Then why are most companies making so few investments to remedy the situation? Continue reading to see how analysis of the key players or departments in digital transformation helps answer this question.
The way we work is changing, and the technology that helps manage the workforce must keep up. Managers are required to make better decisions faster, and employees expect more from their workplace tools. Modern workforce management applications need to empower managers, enhance the employee experience, and support flexibility. In the report Prepare Yourself for the Future of Workforce Management, Gartner explores how new technology platforms are transforming the workforce management market.
By 2023, at least 95 percent of sales of new workforce management applications will be deployed in the cloud. In this report, Gartner analysts advocate that organizations upgrade their workforce technology to a native cloud solution to gain access to next-generation capabilities and features that will better meet the needs of their changing workforce. These new innovations are game-changing for industries with a large proportion of hourly paid workers.
Pioneers understand the value of employee enablement technology.
Those investing in their workforce are also far more likely to rank key technologies as very important to the success of their digital transformation initiative:
Engage Your Employees with New Dimensions in Workforce Management
Learn why it’s imperative for manufacturers to do all they can to truly engage their employees – and make sure they are happy and motivated to contribute to the company’s goals.
KEY INSIGHT 4
Key Players Missing
It’s not surprising that manufacturers are just awakening to the importance of employee enablement in digital transformation initiatives. As Figure 4 indicates, IT, operations and corporate management are primary groups involved in these efforts, so naturally, the initial focus has been on the technologies and their smooth integration into operating processes on the factory floor.
The survey reveals that human resources (HR) and environmental health and safety (EHS) managers are typically not included. This highlights a huge missing link for digital transformation to progress.
Figure 4: Departments Involved in Digital Transformation Initiatives
So, as companies discover that the workforce is the missing link and they begin involving HR in digital transformation initiatives, employee enablement technologies can spur benefits. Strong partnerships should also develop between HR and other teams as digital transformation just doesn’t work in silos.
Pioneers have more players involved.
Those pioneers who are making strong investments in their workforce are also more likely to have every department involved in the effort. For example, 17% of them have HR involved vs. 11% of others.
KEY INSIGHT 5
Workforce Enablement Benefits
It’s certainly clear that manufacturers see the potential benefits of workforce enablement technologies.
- Improved efficiency and productivity
- Increased employee engagement and skills
- Better response to customer requests based on real-time visibility
- More informed operating decisions
In fact, as Figure 5 shows, making the workforce experience more efficient and enabling the workforce to make more informed operating decisions took the top two spots at 59% and 49% of respondents respectively.
Figure 5: Top Benefits of Employee Enablement Technologies
Imagine how much more value new technology will deliver if the workforce is efficient, engaged and has the skills and time to leverage all of the data. With automated processes, these people will be able to make better decisions rapidly and craft strategic process and business improvements.
One of the world’s leading manufacturers and suppliers of earth-moving equipment, including construction, mining and compact construction equipment, is already benefiting from employee enablement technologies.
- Disparate mix of manual and automated workforce management systems leveraged by various facilities in 20 countries created a lack of timely visibility to accurate labor data.
- Inability to compare site level performance.
- Kronos® technology automates and optimizes critical global workforce management processes including time and attendance management, absence management and shop-floor labor tracking. Access to labor data enables informed decision making to drive operational performance improvement.
- Consistent, global standard for labor reporting and analysis across the business.
- Ability to measure key performance indicators (KPIs) including productivity, efficiency, utilization, and idle or nonproductive time.
- Managers and employees are more empowered with an understanding of individual and team performance and can drive improvements.
- Understanding of actual labor costs.
- Measurable productivity improvements: Year 1: 78.1% Year 3: 87.3%.