Prep your business for the next industrial revolution
Teams should be carefully crafted with a focus on upskilling and innovation when transitioning an organization through a digital transformation (Getty Images/ Jay Yuno)
The global business community is experiencing its next revolution. Industry 4.0 (I4.0)—also known as the Fourth Industrial Revolution—is transforming manufacturing with digital technologies, such as robotics, AI, blockchain, and the internet of things (IoT). As a result, functions including supply chain management, machinery operations, network communications and data analyzation are being disrupted.
But businesses need to catch up. According to a Deloitte report, released in January, just 17 per cent of chief experience officer (CXO) respondents indicated I4.0 investments were a priority. And while leaders seem to recognize the significance of an integrated approach to I4.0 investment, only five per cent identified ample progress in this area.
“This marks a significant opportunity for Canadian business leaders and an urgent call to action to many organizations,” says Anthony Viel, chief executive officer at Deloitte Canada.
Here are four tips to help an organization embrace the I4.0 revolution.
1) THINK BIG PICTURE
Short-term thinking over a broader, forward-projecting outlook can hinder a businesses’ I4.0 efforts, says Viel. This reactionary approach has been exacerbated by COVID-19 as businesses respond to the crisis.
“Short-termism places a disproportionate focus on revenue growth and cost control at the expense of the long-term view and prosperity,” he says. “Now, as lockdowns lift and businesses begin to recover, we need to be bold and balance short-term moves and build and prepare to thrive in the future.”
Preparing for this future is where CPAs can flourish, Viel points out. Accountants, he says, will need to move beyond financial reports that summarize past transactions and instead use I4.0’s real-time technology to determine steps forward.
“The accountant’s role [is] to form a view on their organization’s current performance, views and strategies for future possibilities,” he says. “This shapes an organization’s decisions and prepares the organization to be more agile to seize the opportunities that inevitably arise.”
2) CO-ORDINATE EFFORTS
Another shortfall in I4.0 efforts is a lack of co-ordination across organizations, says CPA Neil Manji, partner at PwC, national leader industries, energy, mining, utilities and industrial products. For example, rather than aligning resources and projects with the holistic objective of the business, they are implemented at the department level or on a case-by-case basis.
“What tends to happen in organizations is that there ends up being little pockets of activity,” Manji says. “And sometimes things start to bump into each other because nothing is well-co-ordinated.”
This fragmented approach leads to wasted manpower, funds and resources, says Manji, while also risking a duplication of efforts or conflicting projects. It’s what he describes as acting as a “digital novice” (where an organization is still in a state of evaluation) instead of as a “digital champion” (where an organization is actively moving up the digital landscape).
“Companies need to think about I4.0 as moving up the curve,” he says. “They need a digital strategy first mapped out as a two- to three-year plan.”
3) BUILD A STRATEGY
According to the Deloitte survey, two-thirds of CXOs said they either have no formal strategies or are taking ad-hoc approaches to I4.0, while only one in 10 reported having longer-term strategies to leverage new technologies.
Creating a strategy, Viel explains, involves conducting audits across the organization to determine gaps and avenues for integrating technologies, updating business models, creating leadership roles, and building dedicated, innovative teams. Lastly, organizations can provide incentives to suppliers and partners to also adopt I4.0 technologies.
Businesses that do this are “innovating and growing faster, successfully integrating technology and doing a better job of attracting, training and retaining the talent they will need to recover and thrive in the future,” says Viel.
As businesses stabilize, another consideration related to competitiveness is the pandemic’s impact on supply chains as production moves more local, resulting in increased costs of goods and labour, says Manji.
“As costs go up, [businesses] have to look for savings in other places,” he says. “One of the places companies might take advantage of [this] is through digitizing, automating and doing things more efficiently.”
Viel also suggests organizations find solutions that focus on growth and helping society, as many others have done during the pandemic. Technologies adopted should help businesses innovate, while positively impacting the world, he says. However, by doing so, aspects such as cybersecurity, privacy and government regulation will also need to be considered, he adds.
“When putting in place an I4.0 strategy, organizations need to ensure they are developing and using advanced technology in responsible and ethical ways to achieve a better future for Canada,” he says.
4) LEAD BY EXAMPLE
Having the right individual to take hold of a I4.0 strategy is key.
The leader must have the skills and experience necessary to guide the organization and its workforce through digital transformation, Manji says, but also understand how to handle external stakeholder relations and intricately know the company’s internal functions and operations, particularly in finance.
“It’s not a side project on someone’s desk,” says Manji. “Have somebody who has got a seat at the executive table who owns it ... who weaves that digital strategy into everything they do ... and attracts people from there.”
Resilience is also a key characteristic, says Viel.
“Resilient leaders are those who possess the ability to identify, action and navigate uncertainties and implications, which, as we look to life post-pandemic, will bring permanent changes to our next normal behaviours, experiences, expectations and the role of digital engagement,” he says.
BACK TO BUSINESS
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