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Kalypso 2021 Predictions: How Enterprises will Reap the Benefits of Digital Transformation Initiatives in 2021

vmblog 2021 prediction series 

Industry executives and experts share their predictions for 2021.  Read them in this 13th annual VMblog.com series exclusive.

How Enterprises will Reap the Benefits of Digital Transformation Initiatives in 2021

By George Young, Global Managing Director at Kalypso, A Rockwell Automation Company

As the COVID-19 pandemic accelerated digital transformation across industries worldwide in 2020, we'll see enterprises refine their digital strategies and reap the benefits in 2021. Digital transformation's success will be enabled by value chains connected by a digital thread, a human-first approach, uniting the best of IT and OT solutions and advanced analytics.  

Below are a few trends we expect to see in 2021.

Value chains will be connected by a digital thread as digital transformation initiatives accelerate amid the ongoing pandemic

The COVID-19 pandemic accelerated digital transformation. Enterprises will need to solidify digital foundations and ecosystems to meet near-term demands while building long-term resiliency and flexibility. The digital thread will be key to accelerating digital transformation initiatives into the new year by uniting and integrating IT and OT data into a seamless flow of data. The digital thread of information will need to span the entire value chain - from market/customer insights to product design, to plant and end user - in order to deliver business growth, improve operational excellence and enable risk mitigation. 

A key component of digital thread's success are digital twins. Digital twins will accelerate product development timelines, cut costs and reduce risk by virtually modeling and piloting the entire supply chain, from requirements collection and design to factory layout, capacity, scheduling, processing, manufacturing and servicing in the field.

Successfully leveraging digital thread and digital twins will be a key factor for success as manufacturers adapt to the new normal in 2021 - and benefit from it.

COVID was the match that lit the digital transformation fire. Enterprises must catch up now or get left behind forever.

In 2021, the window will close on the digital transformation's competitive advantage. COVID proved digital transformation's value, and companies that don't tackle high priority business problems with digital now will see their competitors pass them by.

Companies that moved on digital transformation in 2019 or early 2020 are reaping the benefits of never skipping a beat since they sent their employees home in March. They know how to develop new and complex products from home with an integrated tech stack enabling digital twins. For products already in the market, they are turning on AR or VR remote service offerings seamlessly.

We'll see enterprises on the verge of being left behind throw out their digital transformation roadmaps, as none will prove worth the investment at this point in the game. Alternatively, we'll see these enterprises identify one or two high priority business problems in innovation, productivity or risk management and solve them with proofs of value in data science, smart connected products and operations and digital product creation.

Addressing a problem will show instant value, drive user adoption and create a new roadmap based on value rather than technology.

Digital transformation requires a best-of-breed solution ecosystem

An ecosystem of technologies, solution providers and architects will be key for powering successful digital transformation initiatives in 2021. Organizations will favor open architecture platforms to unite the best features of various IT, OT and engineering technology (ET) solutions over leveraging a single provider with a narrower tech stack, which can have limitations and impede results. This allows for the critical flexibility digital transformation initiatives require, allowing teams to quickly implement solutions and drive results. What's more, by leveraging best-of-breed solutions and partners, businesses can create a closed-loop system to further improve outcomes by sharing input and output data across the ecosystem to continuously adapt to shifting conditions or constraints. By sharing information, organizations can minimize time, reduce effort and eliminate redundancy.

To help guide partner decisions, successful enterprises will adapt a collaborative development strategy, which includes:

  • Defining the purpose for partnering
  • Identifying the types of partners needed
  • Developing a partner management structure

This will deliver significant productivity, cycle time and efficiency gains and, ultimately, winning solutions.

Artificial Intelligence becomes less artificial in 2021 

Even with a vaccine for COVID-19 on the horizon, how people work and interact has fundamentally shifted. In the new year, remote work will continue, social distancing requirements will remain, and supply chains will continue to face disruption. This new way of life demands a new way for companies to continue operations effectively across the value chain - from the product to the plant to the end user. The use of artificial intelligence (AI) will be the standard for addressing these challenges. However, without considering how humans will interact with and leverage these new autonomous systems, AI will fail. In 2021, enterprises will take a human-centered approach to AI initiatives, understanding user needs and values, then adapting AI designs and models accordingly, which will in turn, improve adoption.

Enterprises must put the same focus on people and culture as the technology itself for AI to be successful. Organizational change management (OCM) teams will be critical for driving digital transformation and AI forward by bringing people along for the change journey and setting the organization up for measurable results. Proper change management is the most important - yet overlooked - aspect of any digital transformation initiative.

Prescriptive analytics will be a key component for digital transformation success

Advanced analytics are becoming mainstreamed as businesses increasingly collect and analyze data across their organizations, with 35% of U.S. manufacturers deploying advanced analytics in the past three years. For AI to have a significant impact across the value chain, prescriptive analytics will be the catalyst to optimize performance. Prescriptive analytics will become an essential piece for scaling AI within organizations, by leveraging product and customer data to advise AI models on how to improve processes, adjust production and increase efficiency. Prescriptive analytics enables constant improvement with an AI model by continuously monitoring and adjusting based on evolving conditions. Prescriptive models can then enable decision automation, where the models can take the best course of action based on prescriptions. Going beyond predictive analytics to prescriptive analytics will ultimately enable digital transformation success for manufacturers in 2021.

By effectively leveraging digital thread, digital twins, prescriptive analytics and a human-first approach across the value chain, enterprises can ensure their digital initiatives are set for success in 2021 and in the future.

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About the Author

George Young, Global Managing Director at Kalypso, A Rockwell Automation Company

George Young 

George has over 30 years of experience in business management and consulting, serving Fortune 500 brands across industries. Kalypso, founded in 2004, is a professional services firm that helps its clients discover, create, make and sell new products with digital. On May 1, 2020, Kalypso was acquired by Rockwell Automation. George sets the strategic direction of Kalypso, leads consulting projects for name brands in the consumer, industrial high tech and life sciences industries; and works to build the next generation of Kalypso leaders by championing diversity and teaching leadership classes year-round.

Published Thursday, January 07, 2021 7:41 AM by David Marshall
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