By Maxim Komel, Managing Partner, DuPont Sustainable Solutions Russia & CIS
Published at Expert Kazakhstan (https://expertonline.kz/), April 15, 2018
A critical aspect of the modern world is a high change rate. Key
global processes are picking up speed— economic, political, social,
growing data volume, as well as the need for new knowledge and
technologies. Business requirements are constantly changing, leading
to rapid efficiency loss of the chosen management models. Steady
progress is a key factor for productivity growth and keeping up with
other companies in a new economic environment: no progression- no
evolution. Use of innovative management approaches increases a
company’s chance to capture market share, leaving less progressive
Currently, "Industrial revolution 4.0" and "
digitization " are hot topics in the business community.
Development of science and technology always go before industrial
evolution, but there is a qualitative difference with the fourth
revolution: for the first time, a significant role in this process is
given to data, machinery and engineering systems, along with
Technological and informational progress shapes a game-changing
market with new rules. Boundaries between large and medium-sized
businesses are dissolved, traditional products and services are
replaced by digital ones, and new channels and platforms have appeared
for companies to interact with consumers. It all leads to a new level
of competition. Nowadays, companies compete not so much in scale and
volume, as in innovation: companies offering disruptive innovations
and using the latest technology, outdistance industry giants through
the transition to a new level of service and product quality.
The word "disruption", one meaning which is "to
destabilize", exactifies this situation. Destabilization is what
is happening with a traditional, well-established business. Key issues
that shareholders and senior management face include whether to invest
in new digital technologies, and, if so, what type.
Let’s recap the term " digitization " and what it means
with respect to the business processes of the enterprise. Digitization
is a breakthrough stage of company development, where different
methods of management and decision-making are used, based on the
analysis of bulk information (Big data). Embedding digital devices
into different areas of the production chain allows information
systems to predict scenarios. The purpose of digitization is to create
more agile, competitive and profitable enterprises, using modern
technology as a tool.
The new digital reality has arrived, and it dictates business
management requirements and decision-making time, the ability to think
outside the box and to adapt plans, and addresses the changing
By analyzing the experience of companies that switched to digital production, we can distinguish three main areas of issues:
1. Traditional planning vs. Agile (trial-and-error approach).
2. Lack of competent personnel for selection and implementation of new technologies.
3. Unavailability of the information infrastructure.
Let's take a closer look at each area.
At the moment, the market already has a variety of modern digital
technologies, designed to simplify production challenges,
implementation, and improve business efficiency. It is IoT and Big
Data, machine learning and augmented reality, computer vision, new
sensors, artificial intelligence, chat-bots, and so on.
How do you choose the most appropriate technology for a particular
business? How do you plan the implementation? Standard approaches-
experience-based long-term, detailed planning, and management
developed plans, distributed as a directive, do not work in high
market volatility. Agile methodology, which combines short-term plans
and long-term vision, is constantly adjusted as you move
The Fail-Fast (quick testing) model is used when software design
work well too. It works not only in IT but in other business areas as
well. Fail-Fast processes can be outlined as follows: selected
technologies are quickly tested, then a decision on applicability and
economic value is made. The technology is launched in a limited
extent test mode, and after a certain time, the results are assessed,
and a decision is made to continue or to stop.
A key issue is deciding who you can trust to select new technologies. Numerous suppliers of digital technology and equipment offer their solutions to large businesses. Who can act as an impartial advisor when choosing?
Above all, one needs to understand the company's strategic
objectives and select technologies that will make a significant
contribution to their achievement. However, a significant contribution
is often impossible to anticipate. It is difficult to assess the
impact and benefits of a particular technology. Progressive
transformation background specialists with an entrepreneurial mindset,
who are able to determine the most effective and reliable options for
investment, are needed.
Management has a choice — whether to involve such specialists as
employees or to seek outside expert partners and consultants, to
address this issue. It’s important to learn from the world leaders who
successfully implemented digital technologies in production.
According to international statistics, only 5% of the total
company's data is used by managers for decision-making. By increasing
the rate of data used to 50%, it may significantly improve the quality
Most of the problems with data processing (e.g., instability and
low-quality data, diversity of information types, and so on) are
coming from large company infrastructure. Infrastructure solutions
typically consist of dozens of different systems that are not always
Moreover, a pivotal challenge of poor information infrastructure is
a lack of technology and tools to analyze information, as well as
necessary competencies. Adding new systems and technologies and
attracting new specialists creates an expansion of large staffs that
negates the very essence of digitization — to simplify processes and
reduce the dependence on the human factor.
One option is to involve highly specialized companies to customize
data management processes at the company instead of increasing its own
In summary, digitization and the industrial revolution 4.0 is not
the future, but a new reality that cannot be ignored. The impact on
business competitiveness in the next 3-5 years is enormous.
Companies must take specific steps towards a new business reality:
· Revise the company's strategy in the light of new technology and a changing environment.
· Leverage production data.
· Develop competencies and digital technology techniques in
The sooner shareholders and senior management move towards new technologies, the better chance they have to increase business performance and profitability.