Seeking quick wins won’t work in Industry 4.0
Aware of the competitive value technology now drives and the pressure to keep up with rivals most executives set aside sizable budgets and resources to prepare their organization to transition into the age of Industry 4.0.
In this era, businesses are frequently investing to ‘get by’ and maintain pace with rivals, but few are seeing real returns from their digital investments. According to a new report that surveyed more than 2,000 C-suite global executives, issues, on the hole, likely come down to a lack of long-term planning.
While most organizations possess the capabilities required to thrive in Industry 4.0, a significant number of them do not have a complete grasp of what going digital entails, the technologies involved, and how to keep the momentum going. In fact, things are looking pretty scattered.
According to the report, just 10 percent said that they had a comprehensive, long-term strategy in approaching Industry 4.0. Nearly half (47 percent) of respondents, meanwhile, said that Industry 4.0 was approached in an ad-hoc manner, and 21 percent do not have a formal strategy in place.
The problem is, that all too often organizations are building strategies around short-term gains at the expense of long-term returns, and they aren’t leveraging technologies boldly across all business operations. But survey data shows that organizations with holistic strategies are primed to do much better.
For example, 73 percent of organizations with a disciplined approach to strategy expressed confidence in surviving disruption, greatly surpassing those that have no or ad-hoc Industry 4.0 strategies (13 and 12 percent respectively).
They also benefit financially approximately 90 percent reported a 5 percent annual revenue growth over the past year. Ultimately, myopic business mindsets have no place in Industry 4.0.
A wide-angle view
Leaders have to look beyond immediate profit when it comes to leveraging technology and pursue wider disruption in their own industries or organization, rather than just to drive high revenues and reduce costs in one area of the business.
That said, though, healthy market competition doesn’t mean industry members can’t benefit mutually from open innovation. Communication and information sharing with fellow industry players and technologists will help identify the current technological needs and investments required.
Of course, enabling tech means appointing the right talent, and businesses will also need a highly-skilled, resilient workforce for sustained Industry 4.0.
Currently, just 20 percent of respondents agree that their organization has the skills required to survive Industry 4.0.
In terms of investment priorities, 74 percent would invest in training and developing workforces, 59 percent would invest in understanding what skills are needed, and just 28 percent will focus on attracting and retaining new talent.
While getting a big break in the age of Industry 4.0 sounds like a mountain to climb, companies that double down will be rewarded for their efforts, building the muscle required to position their organizations at the leading pack in the coming years.