Every business wants to improve how it operates, whether that’s a more efficient manufacturing process, or simply increased profits. However, many companies only plan for the short-term, tackling issues as they arise and taking each month as it comes.
Business transformation planning aims to solve that by taking a long-term approach to improvement. Today, the goal of business transformation is to make an organisation more customer-centric and boost its competitiveness in an increasingly disruptive market.
If all this sounds daunting, don’t fear. Industrial IoT provider, relayr, has produced a whitepaper to act as a ‘how to’ guide to business transformation. As the company’s strategic business in UK, Mike Hynes, says, it should be compulsory reading: “The whitepaper examines the opportunities for manufacturers in terms of how to stay relevant. It gives clear guidance on what a successful transformation journey looks like, and how businesses can lead the change to transformation.”
The word ‘journey’ is a key one. Hynes explains that a company should see business transformation as a long-term vision. “The purpose of having such a plan is to enable manufacturers to stay relevant in what is a particularly competitive environment at the moment,” he says. “Typically, we work with customers over a five-year plus period to support the transformation of that business.”
Often, though, companies find themselves fire-fighting: jumping on problems as they arise and not looking long term. This is a dangerous approach, warns Hynes, and one that could see you falling backwards. “If companies are reacting to things as they happen – and of course companies are doing that and will continue to do so – it doesn't particularly set them up for future success. By contrast, the leading companies, those with transformation plans, are now able to anticipate what their customers are going to require in the next three to five years and are ready to deliver on those customer needs. So if businesses doesn’t have a formal plan, it makes it very difficult to understand the direction of travel. Reacting to things is ultimately going to leave them standing still while their competition gets a head start again.”
A team effort
As with any change programme, successful implementation of a business transformation strategy requires buy-in across the organisation. “One person or business unit isn’t going to be able to drive change successfully,” says Hynes. “To do that, all the senior leaders within the business need to be bought in, typically also the culture of the company must be receptive to change.”
Luckily, the idea of business transformation is becoming more widely known. Hynes says that not only has relayr been having more conversations than ever before, the nature of those discussions has changed. “Two years ago, I mostly spent my time explaining why business transformation was a good thing to do,” he says. “Now, I’m being asked how to go about implementing it successfully.”
The real push has to come from the very top. The board and the CEO have to be fully on board for the transformation to have any effect, and “they must be able to articulate a business outcome that has been – or is going to be – driven by the transformation,” adds Hynes. “Most businesses we work with operate with a steering committee who provides a line of communication to the CEO. Business transformation will impact every individual within a company, so it’s important that the activities are in place.”
A job for the big boys?
Any SME reading this would be forgiven for assuming that all this talk of business transformation and steering committees is solely the preserve of the larger companies. This is a dangerous assumption, says Hynes. “We’re working with small organisations, all the way up to billion pound businesses. The size of a company doesn’t matter; what matters more is having the desire to change.”
One such company has been working with relayr for 18 months. Their concern was around a dwindling market and a real need to remain relevant. “We’ve been on a journey with that business to help them define where they want to be in five years’ time, we have partnered with them by providing a range of services (technology, delivery, insurance and finance) to enable there future success,” says Hynes. “They decided on a new approach offering a CAPEX to OPEX model with servitisation allowing customers to purchase equipment on an OPEX, not a Capex, model with services all wrapped up That involved a fundamental change in approach for the organisation as it suddenly opened up new markets – they no longer only had to target the companies with large pots of cash. They could approach SMEs that can pay for the equipment and services on an incremental, reoccurring basis.”
Planning for the future is vital. The Fourth Industrial Revolution is bringing unprecedented change, and manufacturers need to know how they are going to tackle it. “Manufacturing in the UK is overdue a boost,” concludes Hynes. “Its contribution to the economy has shrunk and it now finds itself behind the services sector. A business transformation included digitalisation will help manufacturers streamline their efficiency in production, and will also enable them to provide more customer-centric offerings and work with customers in a different way. If used intelligently – and planned properly – digitalisation can transform every area of manufacturing.”
To download relayr’s whitepaper, The metamorphosis of manufacturing, click here.