This blog post was originally published by Deloitte Digital.
As Deloitte Digital envisions the future of businesses, we wanted to know how companies currently invest in Industry 4.0 to enable digital transformation.
To find out, we partnered with GE Digital to identify key questions that were used in a global survey we conducted of 361 business executives from organizations in seven industries (aerospace and defense, automotive, chemicals and specialty materials, industrial manufacturing, metals and mining, oil and gas, and power and utilities) with annual revenues ranging from $500 million to more than $25 billion. Respondents included both C-suite and non-C-suite executives representing different business functions from organizations spread across 11 countries in APAC, the Americas, and Europe.
The study brought to light five interesting paradoxes surrounding digital transformation:
- The strategy paradox: Perhaps unsurprisingly, most respondents (94 percent) said that digital transformation is a top strategic objective for their organization. However, just 68 percent of respondents see digital transformation as a medium for profitability, with only 11 percent of R&D budget targeted for digital transformation. So while almost every organization recognizes the importance of digital transformation, not all of them are fully exploring its strategic potential.
- The supply chain paradox: Executives identified supply chain as the top priority for both current and potential digital transformation investments. However, chief supply chain officers and others outside of the C-Suite—the very people most involved with supply chain strategy and operations—often do not have a seat at the table when it comes to digital investment decisions.
- The talent paradox: Executives report feeling quite confident about the state of their talent pool, with only 15 percent stating they need to dramatically overhaul their talents’ skills and compositions. But with that said, it’s important to know that finding, training, and retaining the right talent stands as the most pressing organizational and cultural challenge.
- The innovation paradox: Our survey results confirm what we’ve seen in previous Deloitte studies—that productivity improvement and operational goals largely drive transformation initiatives. That means that organizations may be using advanced technologies primarily to do the same things better to generate positive ROIs. However, such organizations may be leaving innovation-driven opportunities untapped; our survey found that high ROI is almost as likely to result from investments in innovation as from investments in productivity and operations.
- Getting around the physical-to-digital-to-physical (PDP) loop: The ability to fully harness information from connected assets and use it to drive informed decisions is crucial for implementing Industry 4.0—but it’s a goal few organizations have yet been able to fully achieve.
What does this mean for our clients and how can we help?