Essential Elements of Digital Transformation

Author photo: Peter Reynolds
ByPeter Reynolds
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ARC Report Abstract

Overview

Industrial organizations around the world are entering a period in which new digital technologies augment people and processes to an unprecedented degree. New, commoditized computing resources in the cloud (and at the edge) and artificial intelligence (AI) are changing how people work. Approaches such as the Industrial Internet of Things (IIoT) and Industrie 4.0 have helped pave the way for digital transformation across a broad swath of industrial sectors.

Digital Transformation

Digital transformation spans industrial products, operations, value chains, and aftermarket services. It augments people and knowledge through expanded use of sensors, data, and analytics. ARC Advisory Group believes that most industrial process companies globally will undergo a digital transformation to some degree or other, with many already actively piloting advanced technologies.

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However, many companies today tend to focus their efforts on technology, without considering the full organizational impact.  ARC research shows that only a small percentage (5 to 8 percent) of industrial organizations consider themselves ready for a digital transformation program.  Many others are not prepared to scale up the pilot programs currently in progress.

ARC research also indicates that barriers to organizational accountability, culture and employee change management impede transformation. Digital transformation requires a shift in approaches to deploying and utilizing technology. To help identify these gaps, ARC has developed a maturity model for digital transformation based on multiple consulting engagements with end user clients.

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Keywords: Digital Transformation, Industrie 4.0, Industrial IoT (IIoT), Maturity Model, Organizational Readiness, ARC Advisory Group.

 

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