Innovation is key in navigating businesses through digital transformation. Lina Huertas, Head of Technology Strategy for Digital Manufacturing at Manufacturing Technology Centre, talks about the pinch points where companies in traditional industries require support in their digitalization journey.
What are the steps that traditional manufacturing industries should take to foster a culture of innovation and to avoid extinction? In Huertas’ opinion, the steps are the same for any industry. “The first thing is always to be aware and to raise awareness, for example, by visiting events or conferences or by speaking to organizations that can provide more information. If you are not aware of what’s possible, it’s very difficult to get ideas going,” she says.
“Moreover, someone should always be responsible for achieving digitalization. Businesses always have other pressures to deal with, so it’s very important to have someone in charge of the objective,” Huertas continues. “Once you have a view of the landscape and someone has been tasked with the objective, then you need to identify the opportunity, understanding your whole organization. You should recognize your organization’s opportunities for quick wins and for creating the most value,” she explains. “Quick wins create momentum, so you need to understand that the best place to start is where you have the most issues or concerns.”
Start with the problem, not the technology
“Having established what it is that you want to do, you obviously need to build a business case. At the end of the day, however, what is essential is identifying how value will be created. Without awareness, you can’t articulate what the business of a technology solution is going to be,” says Huertas.
People and process are important in managing change. First, you need change management to make sure the business is managed correctly. It needs to be taken into account from the beginning. Second, people need to be brought on board.
She advises companies to start with the problem, not with the technology. “Starting with technology is never a good thing because digital technology is just an enabler. Nobody should try to digitalize for the sake of digitalizing. It’s just a tool kit that will help you achieve your objectives,” she says.
Instead, companies need to define their objectives and the options for creating value. “Once they have these covered, and a strategy laid out, then they can start thinking about how digital technologies can help them achieve the goals,” she explains. “Again, this is where awareness is important, because unless you understand a little bit about technology, it’s difficult to link it to your own problems.”
Huertas identifies two key areas that are usually taken into consideration afterwards but that should actually be considered from the beginning. “People and process are important in managing change. First, you need change management to make sure the business is managed correctly. It needs to be taken into account from the beginning. Second, people need to be brought on board. They need to understand what the business benefit is going to be and how the change is going to affect their jobs and responsibilities. That way they become part of the process.”
Build a collaboration ecosystem
According to Huertas, collaboration is crucial. “If you collaborate, you can see best practices. You don’t need to possess all the skills, and you can focus on your core competencies instead of trying to learn everything from scratch. Benefits are generated for all the businesses involved. It’s almost as if you are operating as an ecosystem, an environment that is beneficial for everyone,” she continues.
“It’s really difficult to achieve digitalization on your own. Therefore, you need to understand what it is that you are going to do internally and who you are going to partner with to help you deliver these solutions in the process of transformation. Consequently, it’s important to establish who is playing which role, where the funding is coming from and how time and skills are managed. It’s necessary to form relationships between all the partners, because ultimately you are all going to deliver the solution together,” Huertas says.
Innovate through strategic partnerships
Huertas identifies the areas where businesses require most support in their digital transformation. These include strategy, collaboration, business change and innovation. “Many organizations are very structured, and having gone through similar transformation processes earlier, they know that having a strategy is important in the long run. However, I think strategy is sometimes overlooked by organizations. A company may be tempted to just start straight away with technology, diving into the deep end, so to say. But there is a danger of starting in the wrong place or creating solutions that will cause fragmentation,” she warns. “Strategy is something a company can get external support for, but there also needs to be someone who understands strategy internally.”
In driving digital transformation, the focus should be on understanding the business opportunity and optimizing the process.
Another area with potential barriers is identifying key partners that can meet the organization’s requirements. “Choosing between one candidate or the other without being a technology specialist is extremely difficult, so support in that area is important. Moreover, external consultancy in terms of business change might be required if the organization doesn’t have a lot of experience in undergoing similar processes,” says Huertas.
When it comes to innovation, she feels it is important to point out that in Europe, there are many research organizations that are partly funded by government. “They have the infrastructure that enables them to take the risk of innovation. Collaborating with those organizations – and basically using their infrastructure – allows companies to better manage risks because not all organizations can afford to test the solutions on their own.”
Huertas concludes with a piece of advice: “In driving digital transformation, the focus should be on understanding the business opportunity and optimizing the process. In a way, technology should come last because there are people dedicated to thinking about technology. Focus on your core competencies and play with your strengths. Once you have the right process, then you can digitalize.”
Text: Anna Hiltunen