Formulating a successful digital transformation

By Alessandro Cereseto

How the right mix of technology, culture, and partnership enables low-risk, high-reward digitalization

As your manufacturing company starts or continues its digital transformation journey, how do you know what works? This question looms large in today’s competitive global manufacturing marketplace. Poorly executed digital transformations have proven quite costly to companies that have experienced them, but it is equally (if not more) risky to hesitate while your competitors move forward with their digital transformations. How do you navigate a successful path and avoid both of these undesirable outcomes?

Although each company’s digital journey is unique, we at Siemens have identified some key ingredients common to the many successful digital transformations we have helped implement. By accounting for each of these elements, you will be well on your way to a practical, actionable answer to the question of what works.

  1. Cultivate a collaborative environment – Digital tools are only as effective as your team makes them, so preparing your team for a digital transformation is as important as selecting and implementing digital solutions. At most manufacturing companies prior to a full digital transformation, employees are accustomed to segregating by functions and responsibilities. They rely on tribal knowledge to complete their tasks and often have very limited access to information from other departments. To gain the full value of your digital investment, this culture must be replaced with an ecosystem in which sharing and interpreting data across domains is the norm. This cultural shift supports the implementation of digital technologies, and the inverse is also true: today’s most effective digital tools support cross-departmental collaboration and sharing of data to garner knowledge and insights.

  2. Choose technologies wisely – The proliferation of digital manufacturing technologies makes it challenging to cut through the noise and identify the best tools to bring about your digital transformation. Because manufacturing digitalization is a journey, selecting the next technology to implement at your facility depends on what steps you have previously taken. We have found that a strategy of starting small with a plan to scale fast is very effective for most of our customers. As you investigate products that address the next need in your manufacturing operations management, in addition to the specific functions that each product offers, you will also want these tools to remove communication barriers, streamline information flow, and enhance collaboration throughout the enterprise. This means the technologies should be built upon a comprehensive digital twin and a robust digital thread.

    The comprehensive digital twin represents in the virtual realm every aspect of a product’s life, from design through in-use performance, including the processes used to manufacture the product. The comprehensive digital twin is used to simulate, predict, and optimize the product and production system before you invest in physical prototypes and assets.​ It provides valuable foresight prior to actual production as well as insights that drive continuous manufacturing improvements.

    The digital thread is the digital form of individual business processes – activities, tasks, decisions – that enhance and expand the digital twin. It supports automation, traceability, and standardization in the manufacturing enterprise. The digital thread connects disparate sources of information, enabling data to flow freely and supporting automation and improvement efforts at every step of the product development cycle.

  3. Implement effective change management strategies – Successful digital transformations employ change management strategies with three key characteristics. First, they are integrated in that they manage the interplay between technology and people, or more broadly, between facts (digital strategy, business model, technologies, roles and skills, and more) and social interactions (leadership, teams, communication, training, role transitioning, and more). Second, they are agile in that they adapt to changing situations by being flexible at all times to address current needs, without compromising the vision. Third, they are adaptive in that they tune and apply classic change management levers to the context of digitalization.

  4. Adopt a stepwise approach – At Siemens we encourage our customers to make a digital transformation journey – not a digital transformation leap. An iterative, measured, incremental and layered approach, with each new investment building on and incorporating previously implemented digital technologies, helps to optimize value versus risk and to make a successful outcome all the more achievable and likely. As you look around your current facility, it may seem a far cry from lights-out manufacturing or other factories of the future, which are achieving new efficiencies and quality of output. The good news is that a stepwise approach that includes digital transformation along the process value chain has and will continue to convert traditional manufacturing floors to data-driven, resilient and agile operations.

Finally, we believe it is hard to overstate the importance of choosing the right digital industries software provider to partner with you on your digitalization journey. If you are to realize the full value of your digital investment, the tools you select today must serve your strategic vision and manufacturing initiatives for the next decade or more. Your partner must support flexible and scalable applications to predict and adapt products to your future needs. You partner must offer an open ecosystem that affords you the opportunity to build on your investment. In sum, your digital manufacturing partner must keep pace as you drive your business forward.

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This article first appeared on the Siemens Digital Industries Software blog at