The Organizational Transformation of industry 4.0I

July 22, 2021 by Victor Venâncio is Head of Digital Transformation at Stefanini Group.

The transformational capabilities of the fourth industrial revolution show no signs of stopping. The energy transition, the adoption of emerging Industry 4.0 technologies, urban mobility, smart cities and the digital transformation itself affect our personal lives and, consequently, reflect on our organizations.

Smart Industry 4.0

Industry 4.0, boosted by the massive adoption of emerging technologies applied in the industrial sector, aims at operational excellence, predictive maintenance, better energy efficiency, and promotes connectivity between equipment and systems, enhancing the strategic use of data. Some of the most frequently adopted technologies are IoT or IIoT, drones, virtual reality, augmented reality, cloud computing, digital twin, 3D printing, among others.

The solutions used to implement Industry 4.0 in reality produces significant changes in the way that professionals perform their tasks, but they do not transform organizations as a whole. It’s true to say that these advancements make organizations more efficient and competitive; however, the cultural dimensions and structuring of values within the organization directly impact the success of the digital transformation strategy.

For an organizational transformation, it is necessary to alter the culture and processes together with the adoption of emerging technologies from Industry 4.0. Organizational transformation happens with the execution of digital transformation, where technology, processes and organizational culture are aligned to generate new business models and create sources of monetization. This requires that the organizational structures adapt to the massive use of conventional and emerging technologies from Industry 4.0, that processes are optimized to minimize waste, and that organizational culture is adapted for a more collaborative action between departments through the use of open innovation ecosystems.

It is not a simple journey and precisely because of this the majority of the industrial sector in Latin America still remains in the Industry 3.0 era. This accounts for the reality that Latin American countries are quite poorly positioned on the International Institute for Management Development's (IMD) Global Competitiveness Index.

To change this scenario and make the industry more competitive, it is important for the sector to invest more and more in digital transformation journeys, acting simultaneously on the three fundamental pillars (Technology, Processes and Culture) and on the three organizational dimensions (Back, Middle and Front offices ). Back office can be thought of as the assets of the industrial, or factory space. Middle office contains the business support departments (finance, HR, etc.) and Front office as the departments that work directly with customers (sales, marketing, services, etc.). This performance, supported by the execution of a digital transformation framework and the use of a methodology that provides a structured guidance to initiatives that impact the entire organization, from the most operational layers to the board of directors, will result in organizational transformation.

When this happens, we have an extremely positive transformation for the organization as a whole, where Industry 4.0 technologies, in fact, act as enablers for the digital transformation. When this occurs, an organization will be prepared to guarantee a space in the conditions of the fourth industrial revolution in which we live, all while developing sustainable competitive advantages.

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