Maximizing the potential of digitalization with a holistic approach
Digital transformation is a revolutionary process that involves the integration and utilization of digital technologies in organizational, economic, social, and creative spheres. No one is immune to the impact of this transformation, which is altering the way we conduct business, our work environment, and our daily lives.
However, according to the latest report from DESİ (Digital Economy and Society Index) by the European Union, Italy is lagging in the digital realm. It ranks lowest in terms of human capital and connectivity compared to similarly sized and socioeconomically characteristic countries such as France, Spain, and Germany.
Digitization through a comprehensive approach is crucial for balancing flexibility and sustainable growth, which calls for a more structured approach.
Digitization through a common roadmap: the five stages of digitization
To regain long-term competitiveness, it's crucial to establish a strategic plan that involves automating various steps, increasing process transparency, and enabling more operational delegation. This will result in the availability of more data, which will require increased integration with other business functions for both strategic and operational decision-making.
To achieve this, digitization must address five key areas:
Production processes and their monitoring, also known as Shopfloor and MES respectively.
Business management processes such as ERP, CRM, and decision support systems including DSS, applied analytics, AI, and ML.
Adapting the skills and working methods of those involved in the new digitized processes.
The integration of processes and relationships in the supply chain through the sharing of plans and information.
The development of products/services and their functional enrichment.
Failing to consider any of these aspects may put the return on investment in jeopardy. It is crucial for companies to adopt a holistic approach to digitization, as this will allow for flexibility and dimensional growth while maintaining a structured framework.
While there are different levels of digitalization, the ultimate goal is to improve efficiency and competitiveness in today's fast-paced business landscape.
At the first level of digitalization, companies need to create a culture that values data quality and security. With the increasing interconnectedness of technology, there's a need to be more vigilant against cyber threats.
At the second level, manufacturing companies need to implement Manufacturing Execution System (MES) solutions that monitor production resources and control the progress of production orders through a direct connection with production lines. This ensures that production processes are optimized for maximum efficiency.
The third level of digitalization requires cultural change, and companies must ensure that their employees are trained on new technologies. Retraining programs can be implemented to help workers adapt to new digital tools and processes.
The fourth level of digitalization involves digitizing relationships with customers and suppliers. All players in an ecosystem must upgrade their technology to keep up with the speed of technological change. The State can play a critical role by investing in strategic goods that will enhance business competitiveness.
Strategic decisions must be made on which sectors and infrastructures to invest in as no country has unlimited resources to support all supply chains.
At the fifth level, digitalization is inherent in the product itself. Companies should not only focus on creating a good product but also on distributing, marketing, and providing customer service efficiently and effectively.
From creating a culture of data quality to digitizing relationships with customers and suppliers, companies must be prepared to adapt and embrace the new digital age to stay ahead of the curve.
The areas most affected by digital transformation
The impact of digital transformation has been significant, especially in human resources and smart working. These two areas have become even more critical in the post-pandemic period. The introduction of teleworking has allowed the government and companies to continue operating during the months of total lockdown.
Healthcare and public administration have also undergone significant changes due to the pandemic. The digital agenda launched even before the outbreak, has evolved to take the transformation to new heights, facilitating the transition process in the public sector and investing in new technologies.
This process is now touching more diverse sectors than ever before, from digital finance to retail, logistics, and more. Important sectoral developments are taking place with technologies ranging from augmented reality to the internet of things, big data, and cloud computing.
The technologies introduced in recent years have had a major impact on the growth and development of this sector, which uses the car not only as a way of transport but as a connected and increasingly intelligent environment.
In this constantly evolving landscape, we must look ahead and seize all the opportunities that this change holds.
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