While Ottorino Ricci, digital portfolio and change management lead for Braskem America, believes there is "huge value" to digital transformation, he also shared a discouraging laundry list of data that examined the impact of digitization on value chains and enterprises.
A study by KPMG showed that 84 percent of digital transformations failed, and a Cisco Systems Inc. survey revealed that 74 percent of industrial IoT initiatives failed. Boston Consulting Group research showed that 70 percent of digital transformations fell short of their objectives, and McKinsey & Company found that 61 percent of Industry 4.0 projects did not achieve the desired profitability, especially when it came to scaling.
These statistics, on their face, certainly seem to dissuade the growing momentum for industry to embark on a digital transformation of sites, facilities and procedures, Ricci said.
However, Ricci noted that the reasons behind these dour statistics are largely related to people and processes, rather than due to the implementation of digital technology itself.
During a recent webinar, Ricci broke down those "people and process" reasons into five categories. One, he said, is due to lack of alignment by leadership to buy in from the bottom up or solidly understand digital strategy, vision and culture.
According to Ricci, "value centricity" also plays a detractive role to success when no clear value, success metrics or strong business cases are established to drive digital efforts.
"If you don't establish these value metrics, you're probably not going to find [the desired] ROI," he said.
"User centricity" may also be to blame, and Ricci explained that poor change management, user experience and failure by teams to understand business problems that impede success. Not having proper skills, competencies, methodologies and talent in place are deterrents.
Finally, Ricci pointed to data infrastructure, in terms of not having the proper data governance, architecture and infrastructure in place can be deal-breakers.
"The greater the transformation, the greater the importance of those aspects," he said.
According to Ricci, Braskem's digitization journey started in 2018.
Braskem, he said, envisions an intelligent, integrated, connected, autonomous and cyber-secure industry. Hallmarks of that security, Ricci noted, include connected-people assets that break physical siloes by implementing IoT and connected devices, smart sensors, and augmented and virtual reality.
"These help us react faster," he said.
Fast learning and intelligent decision making are made possible via analytics and machine learning, as well as through simulations and digital twins, Ricci said.
Integrated process systems, including control tower and monitoring centers, are essential, he said, adding that autonomous systems like robots and drones help by reducing automating repetitive and high-risk tasks. Cyber-secure and cloud-based computing must also be foundational.
"You need to have a clear vision and implement a start-up culture," Ricci reiterated. "That means thinking big and being bold, but always starting small."
He recommended companies fight the urge to "start big," explaining that it's better "to fail fast and cheap, and then earn from those failures."
Value centricity is another highly important consideration when digitizing, Ricci added. He offered a checklist reference for decision makers to help them avoid value centricity pitfalls, starting with the necessity to avoid being distracted by shiny solutions in their search for value.
"We see some companies using VR glasses and other devices that we know are not scalable," he said. "You need to have a 'value drive' to prioritize, and you really need to understand the value of the effort."
Ricci also emphasized putting clear success metrics in place.
"If it can't be measured, it can't be managed," he said. "Clear success metrics guarantee value drive at the initiative level and bring you out of the dark."
Ricci concluded by stressing the need for consistent fiscal control when throwing the digital switch.
"Don't give out big blank checks," he said. "Funding for innovation needs to be continuous."
