- By Greg Gorbach
- Executive Corner
A summary of the Top 25 Industrial Companies in Digital Transformation report will be available at the 26th Annual ARC Industry Forum, held February 14–17, 2022 in Orlando, Fla.
Industrial innovation is accelerating, and leading companies have their transformation initiatives well underway. Digital champions are leading designated teams that focus on resilience, disruptive technologies, remote work, autonomous operation, sustainability, the circular economy, climate change, and other critical business-level objectives. We all hear anecdotes about companies that have had success with machine learning, augmented reality, robotics, additive manufacturing, data management, autonomous operations, cloud and edge, Internet of Things (IoT), or other core transformational technologies, but who are the leaders in digital transformation and what makes them so?
Leading companies take a strategic approach, integrating digital technology throughout their value chains. Design and engineering, production operations, maintenance, logistics, supply chain, business systems, customers, products, and organizational structure are subject to innovative change as processes are examined and updated and new tools and technologies are deployed.
The core business model by which a company produces or offers services to the marketplace can be replaced by new business models that leverage cognitive analytics, digital twins, predictive technologies, or other technologies that enable the company to expand its worldview and embrace competitive excellence as a goal. Companies thereby move beyond production efficiency to a much more dynamic, responsive, and resilient business model.
To be sure, digitalization in production, whether known as Industry 4.0 or smart manufacturing, plays a crucial role in opening new opportunities for highly flexible, fast, and high-quality production systems. Top companies know that “digital” cannot be bolted on. They must intimately weave digital together with their internal and external processes. Traditional organizational silos must be broken down; multifunctional teams must innovate around customers, processes, and employees; and workforce hesitancy must be addressed and overcome.
In one form or another, software is key to digital transformation. For industrial companies, there is a correlation between investment in software and transformational technologies and corporate valuation. Software powers digital transformation, necessity drives innovation, and the whole cycle is accelerating year after year. Many leading companies have been at it for some time, but the best understand that the successful, ongoing transformation relies not only on getting the technology right, but also on empowering the right people to guide, interpret, and leverage the technology.
Another massive driver for digital transformation is the pressure companies feel to become more sustainable and significantly change their operations to address climate, environmental, and circular economy concerns. Leading companies recognize that they cannot make these changes quickly and effectively—or maybe at all—without substantial digital transformation.
Determining the top 25
So, who are the real leaders in digital transformation? Advisory Group has been conducting research designed to identify them and is releasing a new report. For this research, digital transformation was defined as: “The integration of digital technology into all areas of business, fundamentally changing the way companies operate and deliver value to customers. The organization is typically charged to innovate and improve across multiple dimensions such as: digital/disruptive technologies, culture and leadership, operational agility, workforce engagement, customer experience, environmental, social and governance, and competitive performance.”
While it is not straightforward to identify leaders in such a complex space, ARC has developed a rigorous process based on financial performance, a community-intelligence-based ranking system, and software and sustainability data. Publicly available financial information, ARC primary and secondary research, data from ARC’s market database, and the opinions of members of ARC’s community of end users were all factored into a report and ranked list. The Top 25 Industrial Companies in Digital Transformation report will be released in January. Think your company is doing digital transformation well? ARC would love to hear about it!
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