digital transformation

Digital transformation — it’s one of the buzziest of buzzwords to take hold in our industry over the last couple of years, but what does it actually mean for manufacturers?

digital transformation

Digital transformation: Changing the way you do business

At its core, digital transformation is the adoption of digital technologies in all areas of your organization that transform the way your company operates.

Sound familiar? Are digital transformation and ERP implementation actually the same thing?

We can go back and forth all day on this topic and the nomenclature, but I would argue yes. Digital transformation is about leveraging technology to make your business more streamlined, more effective, and to help you deliver more value to your customers — and that is exactly what ERPs do for your business.

Today’s ERPs aren’t just about replacing back-office functions and systems, like inventory management, accounting, order fulfillment and shipping: Today’s ERPs include these important functions as well as things like automation, analytics and business intelligence, CRM — all with the goal of improving the way your company does business with the goal of making you a better, more effective business. It sounds like a digital transformation to me.

And both cause a high degree of disruption, as well as require a huge cultural shift at your organization. Both can mean walking away from the traditional processes and ways your company has been doing business, processes that your company may even have been built upon.

This level of change and disruption involves a huge cultural shift at your company, one that requires that you are willing to challenge the status quo — and get comfortable with failure: Not everything is going to be smooth sailing from day one, so you need to open yourself up, and be willing to live with some uncertainty.

In fact, the number one thing you need if you want to successfully digitally transform your manufacturing business — and successfully implement an ERP system — is to have a strong vision, and be able to turn that vision into reality.

It’s never a lack of time, it’s a lack of vision

The primary reason I hear from manufacturers wanting to delay, or completely cast aside, the implementation of an ERP system is lack of time. Company executives will recognize a need for updating and changing the way they do business, make a large investment in purchasing a software system, and then when it’s time to actually install the ERP, the company will come back to me and say “We don’t have the time to put the system in place, maybe in 6 months we can do it,” or “Our operations manager says she is already too busy, she needs at least 3 months before she can make it happen.”

Time and again manufacturers will come to me and say that they just don’t have the time right now to invest in setting up a new ERP.

And when someone tells me this, I answer back: you do have the time, what you are lacking is the vision.

This might sting a little, but frankly speaking, there will never be a right time to implement an ERP, or digitally transform your company. And that doesn’t mean you shouldn’t do it, what it means is that you need to make the time for it now, and clearly communicate your vision, and your company’s needs, throughout your organization.

Manufacturers who need an ERP, or need to transform the way they do business, are companies that are on the cusp of rapid growth — or already growing.

These manufacturers need a solution to make their operations more efficient and have recognized that an ERP is a right tool to transform their business. But because they are growing they are busy! And six months down the line, as the company continues to grow, they will be busier, the operations manager will be even more overwhelmed, and that manufacturer will still not have time to put their ERP in place — and most likely will give up on the project altogether.

My advice is always the same: embrace the disruption and live with the instability for a while. As a growing company, you are already functioning at a hectic pace. You know your team can handle it — so, as the saying goes, there is no time like the present. Invest the time now: Embrace the chaos, the uncertainty, and the failure. And yes I did say failure — big changes always bring with them problems and speed bumps — you need to be understanding and remember instant perfection isn’t the goal, but long term improvement is.

Communicate your vision

The best way to get your staff on board with a major digital transformation project is to communicate your vision. You or someone in your company recognized the need for an ERP. But now you are experiencing push back from your employees because even though they know a new system was purchased, and even though they may appreciate that a new system is needed, they might not entirely understand why, and they might not want to change how they do their jobs. That’s natural, change is difficult.

I won’t sugarcoat it — implementing an ERP is tremendously disruptive, and one of the biggest projects you will ever undertake as a manufacturer. It will impact every department in your organization, many people in your company will be personally affected, and it will change how your employees do their jobs. If they don’t understand why the new system is being put in place, they will resist the change, and you’ll risk the project falling apart completely.

It’s on you as a leader to share your vision with your team. Have straightforward and open lines of communication with your staff. Let them know why the company needs to change, how an ERP will streamline operations, and the benefits it will bring to the entire organization. But also be open and honest about the disruption it will bring to the workplace, and the time and resources it will take to implement. If your staff understands your vision and understands why they need to change how they do their jobs, they will be more receptive to the system, and your implementation will stay on track.

It’s also important to get key users and stakeholders within your company on board with the new system from the very beginning. If you know how important the operations manager will be to the change management process, get her involved with the system from the start. Make sure she understands the importance of the new system to the business and that she is an invested participant in the project. This way instead of being someone who can delay and derail the implementation process, she is an ally and a partner — she’ll actually help you get other people on board.

Be the change you want to see

If you are feeling stuck in your digital transformation work, you are not alone. One of the biggest obstacles in digital transformation, or ERP implementation, is how to get over the initial hump from vision to execution. But by changing your mindset to embrace change, realizing that you will never have the time — meaning the time is now — and communicating your vision to your team, you will be able to do it. As a leader, you need to not only make the hard decisions, but you need to be a cheerleader and a champion for your staff, pushing them on, supporting them and encouraging them to create the changes that you know your manufacturing business needs.

Change never comes easy, but by stepping up, and being a strong and effective leader you can lead your company forward.