Digital transformation is often seen as the panacea for many things inside a business, including supply chains. However, this is far from the truth.
The digital transformation of business led by Industry 4.0 technologies like artificial intelligence (AI) and machine learning is complex by nature. Therefore, even though they can tremendously benefit businesses, the successful implementation of such digital projects is not guaranteed.
Specifically, the success rate of digital transformation is less than 30%, and it seems to affect all businesses, from the most traditional to the most tech-savvy ones.
Let’s find more on why many digital projects seem to fail and what organizations should do differently if they want to upgrade their supply chains.
A “mindset failure”
Many digitization projects fail because organizations miss a crucial point or tend to ignore it. The human factor.
They seem to not understand that these digital projects are not destined to change technology but to change people. This can also be understood if we closely examine what digital transformation is. It is not about adding more technology on top of pre-existing technology but rather integrating solutions where there were none.
For this reason, whatever it is that we do, it is important to also include our employees, since technology will affect them the most.
For this reason, there is also a degree of fear involved. In many cases, these new technologies automate tasks that were manually done before. If we don’t make sure to also include our people in the process, rejections will be plenty.
Companies need to prioritize upskilling and reskilling employees to be able to perform in their new setting and within clearly defined new roles.
Now, let’s look at how companies can increase their chances of a successful digital transformation in supply chains.
Find the sweet spot in the digital transformation
Supply chains are invaluable for businesses and a very tough market to compete in. Technology can offer the competitive edge companies need to be successful, and they often face it with impatience.
To digital transform businesses is not a walk in the park. Companies need to consider their digital maturity and their people’s resistance to change. However, there is always a sweet spot where technology and people can work well together. Finding that ideal balance is what firms should focus on early on.
Too much technology not only requires more resources but can also kill any organization. It is like trying to run before even learning to walk first, which is impossible.
Therefore, firms need to determine the kind of technology they need, its amount, and the pace for their implementation. And these are only as far as the technology part is concerned without considering the human factor.
It is generally good for workers to know that their employer is competitive and that it always strives to remain such. This gives them a sense of security and allows them to go the extra mile for it.
That extra mile could be to put a little more effort into adopting new technology, for example. In this case, what could work well together is the development of personal development plans for employees with a learning management system. That way, businesses’ technology readiness increases and the workforce can better understand how it can work in synergy with tech rather than get threatened by it.
In a world where the value of digital transformation is constantly evangelized, supply chains and businesses often fall into the trap of trying to run before learning to walk in terms of technology adoption. That means that they often rush about adopting new technologies without considering their digital maturity or workforce readiness.
Successful digital projects require a shift in the business mindset that considers technology to be for technology and not for people. At the end of the day, people will have to work with these new technologies, and they will be the judges for their success or not. Therefore, in all your digital transformation efforts, you should know that the human factor plays a major role.