At the 3DEXPERIENCE Forum Asia Pacific South 2021 earlier this year, Liang Ying Shun, Dassault Systèmes’ Manufacturing Technical Lead for Asia Pacific South and Chow Sai Keet, DELMIA Sales Leader for ASEAN, took part in a panel discussion on “Digital Transformation – From Myth to Making it Happen!”, moderated by Stephanie Krishnan, Research Director, IDC Manufacturing Insights, IDC Asia Pacific.
Based on the panel discussion, Liang shares insights in an article to debunk myths surrounding digital transformation and examine the role of virtual twins in accelerating innovation. We reproduce the article below which was first published on Linkedin.
While the concept of “digital transformation” has transformed many businesses today, there are also a number of myths surrounding it.
Example of such myths include:
- “Is it only applicable to multi-national companies?”
- “How accessible are technologies like virtual twins to small and medium-sized manufacturers?”
- “How can manufacturers embark on digital transformation without disrupting current operations?”
In this article, I’ll share some excerpts from our discussion as we debunk the myths surrounding digital transformation and look at the role of virtual twins in accelerating innovation.
Myth #1: It is difficult to obtain ROI on digital transformation
Many businesses might be hesitant to invest in large-scale digital transformation because they think it is difficult to obtain return on investment (ROI). However, IDC research has shown that investing in digital transformation can make a large financial impact, even more so during times of crisis.
During the roundtable, IDC presented research which showed that organizations that have gone through digital transformation, or are already undertaking significant digital transformation initiatives, versus those that haven’t, are actually becoming more profitable. These organizations are bringing in more revenue, and having less negative impact as a result of incidents such as the COVID-19 pandemic.
Source: IDC, 2021 – Digital vs Non-Digital Manufacturing Revenue Performance Index (RPI) and Profit Performance Index, 2015-2021
IDC’s research has shown that 85% of ASEAN manufacturers that do undertake some form of digital transformation actually see benefits in their supply chain and shop floor. These benefits are in areas such as quality, increasing yield, increasing their ability to optimize their supply chain, and their ability to improve the processes of their organization. Those that don’t, are actually starting to see falling profits and revenue.
Source: IDC 2021 Asia/Pacific Manufacturing Insights survey (n(ASEAN) = 382)
This is actually causing a digital divide in the field.
Source: IDC, 2021 – Digital vs Non-Digital Manufacturing Revenue Performance Index (RPI) and Profit Performance Index, 2015-2021
Myth #2: Digital transformation is all about technology
Another common myth is that if a company simply upgrades its technology, it has accomplished digital transformation. As critical as technology is to digital transformation, organizational culture is actually the biggest barrier to overcome.
Digital transformation is much more than merely adopting software or hardware. It requires moving to a new platform that allows a company to work in an entirely new way, making its processes much more effective, more efficient, and to have greater collaboration in a more transparent manner, to serve their own customers better as well. Organizations will need to ready themselves for a real transformation change in the organizational culture, rather than looking at adopting just ‘point solutions’.
Myth #3: Data records need to be perfect to be ready for digital transformation
One of the challenges that businesses find with digital transformation is the need for quality data. Traditional businesses that keep paper records, which sometimes can be hard to retrieve, or rely on manual data entries that may not always reconcile, might find it tough to feel “ready” for digital transformation.
As Sai Keet said, “In reality, no business can truly have data that is always correct, always on-time and always in the full amount. What’s essential is that the more you use and analyze your data, the better it will get.”
“Through our experience, businesses can start with a ‘reverse loop’, where we look into the data that they have, build in some checks on the data to prepare it for usable analysis, then load the data into the platform. From the dashboards, they will then come to understand what the quality of their data is like, and make continuous changes to improve it. Just getting started on inputting data into a virtual platform will give you the foundation and visibility to embark on digital transformation.”
Myth #4: Innovation can only be undertaken by a specific department
It is said that with every crisis comes new opportunities for growth. But are businesses able to innovate quickly to seize them? At Dassault Systèmes, we believe virtual twins can foster collaborative innovation.
Gone are the days when innovation depended on just one department. In today’s world, innovation is about involving the entire eco-system, from your suppliers, the management, the shop floor workers, to even your customers. To do this, all information and collaboration must be harmonized on a single platform, with everyone working on one single source of truth, to enhance agility and flexibility.
Your customers and suppliers can actually contribute valuable ideas to improve your product. The way to accelerate innovation, is also to have them involved within the single virtual platform, so that all contributors can collaboratively transform the data into sensible contextualization to drive improvements, with greater insights. This is what we call an iterative approach to product innovation, made possible through the collaborative virtual twin.
Myth #5: Investing in digital transformation is risky
The virtual twin, a core component of digital transformation in manufacturing, can actually help companies gather key insights and model potential future outcomes of major business decisions, thereby de-risking larger investments.
As Sai Keet explained, the virtual twin extends the real world and simulates possibilities for improvement. Capacity-intensive decisions, such as introducing a new manufacturing process, a new asset, a new production line, or a new product into your ecosystem, cannot be done just over a day. For such decisions, it is important to get it right the first time.
A virtual twin allows you to simulate and understand the impact of such decisions in the real world environment, thereby giving you information to improve on these decisions realistically, before you actually commission them.
Myth #6: Digital transformation is good to have, but not a need
Today, digital transformation is an industry necessity, rather than a want. The companies that get it right will be the ones who will capture a larger market share.
For example, cosmetic companies today are using social listening on Twitter and Instagram to incorporate trends into their innovation process. These companies have the digital agility to tailor their production according to this data very rapidly. Instead of a 6-12 months fashion cycle, they are now reducing this to a 2-3 month cycle.
The speed at which you go through the market to delight your customers will be vital; it can capture a lot of market opportunity. With the trend of online shopping and mass customization, we are seeing shorter innovation cycles. How do you test, refine and execute it? The kind of agility offered by virtual twins can be a game-changer. Companies with this capability will surpass their competitors.
The evolution of products, the way we use products, the innovations that are going to happen – being able to simulate this product and process innovation through a digital virtual twin, this will be an exciting opportunity moving forward..
What are other myths you have encountered in your digital transformation journey?
In case you missed the 3DEXPERIENCE Forum Asia Pacific South 2021, you can catch it here: https://events.3ds.com/3dexperience-forum-asia-pacific-south-2021/plenary-session
