Thought Leadership

Digital transformation: How to start and how cloud can help

By Conor Peick

Companies in all industries are facing a future of tougher competition, exacting product requirements, growing complexity, and an increasingly central focus on sustainability. Products are becoming smarter and more sophisticated, with components and subsystems being sourced from multiple domains. Manufacturing systems are also growing in complexity as they become more efficient, flexible, and connected to produce advanced products and keep pace with the rapid cycles of today’s industry.

At the same time, sustainability is now a core requirement for companies around the world as business strategies and new regulations align to drive profitable sustainability initiatives that reduce the environmental impact across all industries. These trends have implications across the product and production lifecycle, and will drive changes in how companies design, test, manufacture, source, and recycle the products of the future.

With increasing complexity, competition, and demands for sustainable practices, companies are faced with the challenge of adapting to a new industrial landscape without losing ground in the process. The key to managing this high-wire act is digital transformation. Digital transformation, or the widespread digitalization of processes, data flows and methodologies, provides a holistic data-centric view of the world instead of being limited to application or domain-centric silos of information.

Digital transformation enables companies to manage complexity, integrating all parts of the business, to turn data into value at every stage of the product and production lifecycles: design, realize and optimize. At the heart of digital transformation is the digital twin, which accelerates digital transformation efforts and enables companies to design, build and optimize next-generation products faster and cheaper than ever. In an interview earlier this summer, Dale Tutt, VP of Industry Strategy for Siemens Digital Industries Software, shared some of his thoughts on digital transformation and how cloud computing and software-as-a-service (SaaS) come into play.

Getting started on digital transformation

The natural question is how to get started with a digital transformation. First, it’s important to consider that digital transformation is a shift in perspective as much as it is a change in technology, Tutt shares. Companies that simply buy new tools and implement them will see some benefit, surely. But they will also spend a lot of money to realize only a portion of the benefit that digital transformation can provide.

Instead, Tutt says that a holistic viewpoint is needed. Companies must consider and seek to transform the entire organization, not just accelerate individual, piecemeal processes. They should think about organizational change management, how their people will learn and interact with new solutions and technologies, and how new solutions will work together to deliver the maximum value for the company and its people.

That’s not to say that this transformation needs to happen all at once. Several factors will inform how each company approaches their digital transformation. What are the business objectives, and what pain points need to be solved? How much budget and time are available to make the change? And what is the organizational appetite for change?

Tutt points out that, for some companies, this will result in an aggressive transformation that may involve committing to an entire portfolio of solutions, such as that of Siemens Xcelerator, and implementing a phased rollout across the organization. For others, these factors will constrain them to beginning with only the most critical areas and expanding their digitalization efforts later.

In either case it’s important to find a partner that can support your transformation regardless of the path it takes. While there are many vendors to choose from, it’s important to identify a digital transformation that can offer technology, expertise, and flexibility, particularly in how solutions are deployed.

How do cloud and SaaS fit in to the digitalization equation?

When it comes to cloud and SaaS deployment models, Tutt characterizes their use as highly recommended if not absolutely necessary to achieving digital transformation goals.

On-premise software deployments will deliver many of the core benefits of digitalization, including faster development cycles, integration across engineering, production, and the supply chain, automation, and more. The addition of cloud computing and software-as-a-service (SaaS) facilitates full enjoyment of the power of digitalization by reducing the complexity and cost of IT systems, by ensuring that software is interoperable and up to date, and by making data accessible and secure.

Moreover, companies will be able to focus on using digital solutions instead of investing time and resources into updates, data migrations, and other maintenance. The result is smarter, more exciting, and more sustainable products and operations with fewer headaches along the way.

Ready to get started? You can read more about Siemens Xcelerator and how we can help you embrace digitalization through software, services, and deep industry expertise by clicking here.

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