In our previous post, we discussed the importance of measuring ROI for digitalization projects and the metrics that can be used. In this post, we will focus on the key considerations for maximizing the ROI of digitalization projects.
Imagine a manufacturing company investing heavily in digitalizing its operations, hoping to boost productivity and profits, using in-house capabilities, and selecting cheaper solutions over value-based ones. However, despite implementing various digital tools and processes, the company did not see the expected improvement in its bottom line.
Upon closer examination with the help of a third-party digitalization partner, the management realized that though they had constituted a cross-functional digitalization team from their expert operations, IT, and automation departments, they lacked digitalization champions to look into nuances of digitalization technology including depth of functionality pertaining to data analytics, to deliver desired results.
They also lacked cross-functional platforms, upgrade of automation including the required interfaces and data points, and IT/OT integration due to the complexity of models, protocols, and versions.
The industrial digitalization partner enabled the company to reevaluate its vision with a focus on key areas of improvement and the significance of data analytics for near real-time informed decision-making. The digitalization partner introduced a strategic and analytical layer, appropriate technology, and integration and execution capabilities which resulted in meeting the defined objectives.
The key consideration for maximizing the ROI of digitalization requires a clear understanding of the defined digital transformation goals. These could be improvements in throughput or downtime reduction, etc. Choose the end objective that best suits your organizational needs.
Many times businesses try pilot projects to calculate the ROI before actually implementing a Digitalization strategy. As these pilot projects are implemented over a smaller section of the process, realizing or predicting actual ROI on digitalization can be misleading more than often.
Digitalization is not a one-time project but rather a journey. To maximize ROI, businesses should constantly evaluate the effectiveness of digitalization initiatives and identify areas for improvement. This can involve gathering and analyzing data on the performance of digital processes, seeking feedback from employees and customers, and exploring new technologies and tools that can further enhance operations. Continuous improvement also involves fostering a culture of innovation and experimentation, where employees are encouraged to seek out new ideas and solutions.
Digitalization projects will demand a newer perspective and skill sets, and to ensure effective implementation, businesses should provide adequate training, upskilling, reskilling, and support to employees, as well as involve them in the project planning and implementation process.
Digitalization projects involve the use of sensitive data and information, and businesses need to ensure that they have adequate measures in place to protect this data. This is achieved through the selected digitalization platform and/or solution that is scalable and capable of implementing secure data management systems and ensuring compliance with relevant data security standards.
In conclusion, digitalization projects can be incredibly valuable for organizations, but it is important to approach them strategically to ensure maximum ROI. By following the steps outlined in Part 1 and Part 2 of this series, businesses can set themselves up for success.
We hope this two-part series has provided valuable insights into the world of digitalization and ROI. Remember, digital transformation is not a one-time event, but an ongoing journey.
If you’re considering embarking on a digital transformation journey for your organization, remember to keep these tips in mind. And if you need help navigating the complex landscape of digitalization, consider partnering with digitalization experts like Trimasys to guide you through the process and maximize your ROI.
Contact us today to learn more about our digitalization services and how we can help you achieve your goals.
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