5 Steps for digitalization in heavy industry

July 1, 2019
McKinsey releases guide for heavy industry’s digital transformation.

Change is hard. Years ago, my mom bought my brother a book called “Who moved my cheese?” The book aims to help readers better deal with change in their work and personal lives. I’m not sure whether it actually helped my brother, but sometimes a guide can make change much more bearable.

Today, technology’s pace could give Flash a run for his money, and this is causing changes in nearly every industry. As a result, industry has been left to figure out how to transform their operations to reap the benefits of ever-changing technology.

This digital transformation can be a big task, and companies of all sizes are trying to figure out the best strategy for success. Luckily, there’s plenty of help out there. One resource comes from McKinsey & Company, which recently published an article by Dennis Ducro, Oliver Noterdaeme, Malgorzata Sliczna, Ken Somers and Joris Van Niel titled “A guidebook for heavy industry’s digital journey.” The article is part of a series on the company’s website.

Here’s a quick summary of the five steps for heavy industry digital transformation offered by the authors.

  1. Define your vision: Whether it’s specific or broad, a vision helps the entire organization align on the company’s digitalization priorities and embrace its changes. This means investing in communication to ensure all stakeholders have a clear understanding.
  2. Complete your diagnostic and business cases: Using the vision you just developed, make a detailed investigation of current operations. This step should include defining current strengths and weaknesses, capabilities and data. This step will be essential in creating your transformation roadmap, the authors say. Additionally, you should look at current operations through three lenses: potential impact and associated risk; ease of implementation, feasibility, payback and available support; and the potential “signaling effect” the project will send to the rest of the enterprise,.
  3. Build your roadmap: Your roadmap should fulfill three purposes: lay out the actions needed to develop, test and deploy; define actions needed to develop capabilities, infrastructure and data; and define the pace and sequence, the authors say.
  4. Run the pilot: Digital transformation pilot projects are essential to ensuring the success of the final implementation, the authors say. “As a result, the choice of pilot is critical: companies must select a project with a high probability of success and the potential to deliver significant value, while being both visible and relevant to the whole enterprise,” they say. Keep in mind that pilot projects can lead to changes in your digitalization approach.
  5. Scale up: Plan for scale up using the lessons you learned from your pilot project. Just like the pilot, different types of transformation can require different approaches: holistic, focused, cookie-cutter, pull-forward or hub-and-spoke.

These five steps are a great starting point for companies looking to invest in digital transformation. However, the article notes that in order for them to be successful, a company needs to have the right “essential enablers” in place.

“These include robust, consistent and accessible data; appropriate technology; the right talent and an agile model for the delivery of new solutions—with the combination varying depending on its chosen transformation archetype,” the article says.

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