Top secrets to unlocking digital value
The brightest minds in digital transformation discuss how to unlock your organization’s full digital value.
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Unlock the other 50% of your digital value
Many firms lose half their digital value to inefficient processes, outdated technology, and inadequate training. This guide can help you unlock the full potential of your digital transformation.
Step 1: Define your goals and link to outcomes
To start value engineering, determine exactly what your digital transformation must accomplish.
Lay out your digital transformation goals in terms of concrete, specific, and explicit business and/or strategic objectives such as:
Business objectives:
- Market leadership
- Margin protection
- Product leadership
- Sustainability
Strategic objectives:
- Higher revenue
- Improved profitability
- Increased efficiency
- Better asset utilization
Choose any of these objectives as your "bottom line." Then work backwards to determine how your digital transformation plan will incorporate it.
“There’s too much 'digital' and not enough 'transformation.' Leaders must articulate a motivating state for digital transformation, 1) for innovation and 2) for modernization. Every initiative must roll up to either one. Otherwise, it’s just digitization.”
Brian Solis, Head of Global Innovation, ServiceNow, best-selling author, keynote speaker
The objective that’s right for your company depends on your unique needs, goals, and pain points. But there are several oft-overlooked goals the right digital transformation plan can address.
“The most frequently overlooked digital transformation task is designing human-centric functions needed to provide guidance to automated ones. Humans apply context to data-driven recommendations and create crucial linkage between efficient robotics and attaining key outcomes.”
Kevin L. Jackson, CEO, GC GlobalNet
“Most organizations have vast amounts of data already available—it’s just not well organized, shared or used in decision making. I believe there’s more value in tapping the existing data within the organizations, to improve supply chain planning, vendor and supplier contracts terms, and pricing.”
Helen Yu, CEO & Founder, Tigon Advisory Corp.
Don’t think of just integrating new tech as the primary focus of this process. Instead, consider the new tech a tool for unlocking the full potential of your people and processes.
“Companies are awash in data but lack knowledge. Value engineering requires companies to deliver insights by aggregating previously disparate data sources. Business leaders need technology solutions that help them understand AND act on data in real-time.”
Maribel Lopez, Founder, Lopez Research
“First, choose a committed leader. Second, define the problem. Third, assure processes and systems are workable. Fourth, add compute and digital systems. Most companies have digitized. The problems involve interoperability and compatibility. Systems, people, then technology.”
Gary Mintchell, Founder, The Manufacturing Connection
Step 2: Uncover possible improvements
Next, discover how processes and systems could be improved. This will require every department’s buy-in. Encourage everyone in your organization to point out areas for improvement.
“One key aspect of digital strategy is an observability strategy that considers the proper placement of digital information collectors and assessments. Aligning an observability strategy with the goals of digital transformation drives value creation.”
Kirk Borne, Founder and Owner, Data Leadership Group LLC
Keep an eye out for cross-sectional opportunities while discussing each department’s pain points. When you notice them, plan meetings with all relevant departments to discuss next steps.
“Our team recently conducted a survey on digital transformation with front line employees. Their message was loud and clear: 'Let us have a voice in the process.' Successful transformation requires recognizing that the whole organization plays a role.”
Shelly Kramer, Chief Evangelist, The Futurum Group
Don’t be afraid to encourage your organization to think big and entertain all ideas. This will help make your value engineering project more successful and build a more collaborative culture.
“Many digital transformations fail because they digitize existing processes instead of rethinking back office operations for a digital future. Digital transformation is a process that involves the entire organization. Without a commitment to do business differently, success will never be achieved.”
Jim Marous, CEO, Digital Banking Report
Step 3: Analyze and prioritize
It’s time to prioritize and schedule brainstorming collaborations. Prioritize which ideas you want to pursue based on their potential business value as well as implementation requirements.
“The human component plays an essential role in the success of digital transformation. We must treat employees as collaborators who understand and embrace change. Leaders must lead by example and create a collaborative environment where a culture of innovation is infused throughout the company.”
John Nosta, Founder, Nostalab
As stakeholders grow excited, they may develop strong, sometimes conflicting opinions about the importance of each opportunity. Handling these disagreements with diplomacy is essential.
“Develop a scoring model that includes critical factors to be considered such as social impact, market competitiveness, operational costs, and environmental impact. Score each project based on the criteria established. Such a model should align with the company’s strategy and reflect its values.”
Theo Lau, Founder, Unconventional Ventures
Step 4: Create your map
First, determine who needs to be involved in implementing each idea. Then assign someone to each step of implementation. Make sure everyone involved understands the timeline and their roles.
“7 Steps to Successful Change Management: 1. Develop a clear vision—Before you plan, you need to know exactly what you want 2. Develop a clear plan 3. Assign ownership 4. Communicate 5. Implement 6. Monitor and remediate 7. Wrap up and transfer ownership to the support team”
Avrohom Gottheil, CEO, Ask the CEO Media
Keep track of progress and reassess prioritization regularly. It's natural for your plan to change during this time. What’s important is to make progress that benefits everyone.
“1. Ensure transformation aligns with overall strategy 2. Assess the current state of the organization 3. Identify areas for improvement 4. Develop a roadmap with a timeline and resource allocation plan 5. Engage with stakeholders 6. Consider cultural impact 7. Review process regularly”
Jake Hall, The Manufacturing Millennial
Remember, you aren’t just upgrading your processes—you’re changing your company’s cultural identity. Making that happen requires the commitment of the workers at the heart of that culture.
“A roadmap for digital success begins with cultural commitment. Enterprise must tap internal talent and external partners to harmonize digital processes so digitalization embraces human collaboration to accelerate efficiencies, enhance customer experience, and institutionalize smarter work.”
Glen Gilmore, Digital Marketing Consultant
Value engineering in the real world
In practice, the value engineering process is more intuitive than you may think. Let’s take a look at some practical examples of how value engineering could be implemented across multiple departments of a theoretical company.
The company
Many of the biggest customer packaged goods (CPG) companies in the world are in desperate need of digital transformation. This is how they could use value engineering to coordinate it, enterprise-wide.
The problem
The following list includes challenges faced by many CPG companies. Value engineering can be used to help solve these demands.
Distribution and logistics
- Limited visibility for shipment prioritization
- Poor temperature controls
- Lack of precise delivery information
Supply chain planning team
- Lack of data on changing consumption patterns
- Obsolete and inaccurate inventory data
Sustainability, safety, and risk
- Consumable, packaging, and waste monitoring challenges
- Legacy equipment posing downtime and liability risks
- Lack of visibility into regulatory compliance
Commercial division
- Outdated fulfillment data
- No way to monitor consumer use patterns in real-time
- Connectivity issues with critical equipment
- Limited ability to control machines remotely
Manufacturing
- Lack of real-time production transparency
- High water and energy consumption
- Reactive maintenance creating unplanned disruptions
- Lack of analytics data to measure breakdown risk
The process
The value engineering process empowers departments to solve pain points collaboratively. Work toward implementing solutions together in cross-functional meetings.
The results
This is just a small example of the difference a properly-implemented value engineering program could make across every department of a CPG organization.
Distribution and logistics
- Lower transportation costs
- Improved customer service metrics
- Better on-time percentage
Supply chain planning team
- Improved forecasting accuracy
- More effective management of excess inventory
Sustainability, safety, and risk
- Reduced energy and water consumption
- Lowered waste generation
- Health, Safety, and Environment (HSE) standards compliance
- Reduced incident downtime
- Improved labor productivity
- Fewer breach-related penalties
Commercial division
- Enhanced order fill rate percentage
- Improved machine uptime/downtime
- Higher sales revenue
- Increased billing accuracy
Manufacturing
- Improved throughput
- Lowered manufacturing cost
- Improved machine uptime
- Decreased maintenance costs
Your digital value shouldn't be a secret
If you’re ready to unlock your hidden digital value, Cisco is here to help.