What do digitisation, digitalisation and digital transformation mean?

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We’re going back to basics. In this post we’ll define the terms, highlight examples in manufacturing today and share tips and tools to get started.

Manufacturers are well aware of the potential benefits in adopting new technologies; from increasing efficiency with automated processes and supporting decision-making with visible data. The key word here is potential. Manufacturers aren’t short of software vendors trying to sell them products. Technology adoption can look expensive and risky when the focus is on buying a system not on how the business will gain long-term benefits. Together with finance, skills and resourcing, a big challenge to technology adoption is simply getting past the sell and making sense of terminology.

In this blog we’re going back to square one. We’ll define the terms digitisation, digitalisation and digital transformation. We’ll show examples in manufacturing today and highlight some tips and tools.

 

What do digitisation, digitalisation and digital transformation mean?

Broadly speaking the difference is the increasing levels of benefit to the business.

Digitisation is creating electronic records of information. Scanning a paper Goods Received Note is an example of digitisation since it creates an electronic copy.

Digitalisation is about processes not just information. Replacing a production sheet with an app and creating a workflow means the data can be surfaced and shared throughout the organisation in customisable reports.

Digital transformation is about business strategy. It involves meaningful business change towards empowering your people, optimising processes and accelerating your company’s ambitions with technology.

 

Why is it important for manufacturers to understand the differences in digitisation, digitalisation and digital transformation?

There is limited value in digitisation. In manufacturing smart sensors are increasingly used to monitor temperature, pressure and flow. Recording the measurements on paper, then scanning and uploading the sheets is a common document management process that doesn’t leverage the value in the data. Digitalising the process with a custom app and a BI solution would create a workflow to populate a management report with the data for real time analysis, by multiple users across multiple systems.

 

Up to 73 per cent of all data within an enterprise goes unused for analytics because employees can’t get access to insights in the right time frame. -  Forrester.

 

Businesses worldwide generate around 2,000,000,000,000,000,000 bytes of data every day. That’s two trillion. It’s a lot.

 

Manufacturers are capturing a huge mass of data that goes largely unused. This could be costing money in terms of lost revenue opportunities, lower efficiency and productivity and quality issues. One benefit of digitalising sensor data would be reducing downtime and reducing wastage with predictive maintenance. Another could be locating anomalies that lead to quality issues.

Understanding the right questions to ask of the data and getting useful answers out is the responsibility of senior management (not IT delivery) and moves digitalisation towards digital transformation.

Capturing and processing data is vital but ensuring data quality and setting KPIs aligned to the business strategy is what creates real meaningful business change. Decisions around data governance, security, storage infrastructure and disaster recovery belong to the board. Management intelligence, data and integration initiatives are a pillar of successful digital transformation programmes.

 

Digitalisation and digital transformation in manufacturing

One £60m+ food production business with a new ERP implementation digitalised sales reporting with a PowerBI solution. Result? Reduced the burden on the finance team, highlighted data quality issues in the ERP, and improved the ERP adoption.

Process manufacturer Aquascot digitalised production and quality assurance as part of their smart factory initiative.

Yorkshire’s own Whitby Seafoods freed up £500K of raw material funding within five months of activating their digital transformation.

 

Tips to get started with digitalisation and digital transformation

Begin with the business. Talk to your people. It sounds obvious but digital technologies are tools to create business value whether your ambition is efficiency improvement or expansion to new markets. Your people already have ideas about how to improve their jobs, start there.

Analyse your processes to understand what’s working well and where technology can increase productivity and efficiency. Digitalise one process as a starting point.

Align your digital strategy and plan with the business goals. There’s a lot of shiny tech with exciting features, but is it strategically important? One way to drive out priorities is to measure your business’s digital maturity. There are lots of ways to do this, we recommend our free guide to leading digital transformation.

 

Tools for digitalisation

There are tons of options out there. One we like is the Power Platform technology stack because it does the job, it’s affordable, and businesses with Microsoft365 already have access to it. 

  • PowerBI – data visualisation and real-time reporting
  • Power Automate – digitalise manual office processes
  • Power Apps – custom solutions that can rapidly add value e.g. digitalise a production sheet

If you’d like a demo contact [email protected]