IoT digitisation strategy in manufacturing firms

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Introduction

Digital transformation has become incumbent with the rapid scaling of Internet of Things technologies, leading to the digitalisation of value chains and disruption of customer value propositions. As a result, it has become imperative for manufacturers to stay ahead of the curve through creating and adopting IoT digitalisation strategies. However, there is a lack of guidance in academic literature and practice on what determines the successful formulation of an IoT digitalisation strategy. This project involving Cambridge University and the University of Sheffield and several industry collaborators sought to address this gap.

Project aims

The aims of the project were to

1. take in interdisciplinary approach to building on previous work with manufacturing partners to develop a digital transformation strategy blueprint for manufacturers. We explored the key determinants to enable a successful formulation of IoT digitalisation strategy. In particular, we investigated determinants of IoT adoption such as the strategy formulation roles, the organisational context and the environmental context and the B2B customer experience.

2. test our developed blueprint with other established manufacturing firms (e.g. CEMEX, Caterpillar, ABB, BAE, Thales) in Cambridge and Sheffield through interviewing their IoT/CTOs/digital managers.

3. develop guidelines for industry best-practice through , and advance the development of future research on IoT strategy formulation processes.

What was done?

We conducted a workshop, followed this up with some interviews with industries such as HCL Technologies, Caterpillar, Thales, AstraZeneca, Finning, ABB, Boeing, Zoetis, Philips.

In addition, we designed a survey and use Qualtrics (a marketing research company) to disseminate the survey to digital managers in manufacturers. This enables us to overcome the Covid-19 disruption as it was difficult to develop workshops virtually and collect enough data to be analysed. The analysis explored key determinants, their interlinkages and the effect on the predicted outcome domains in successful digitalisation strategies at manufacturing firms.

Results

We developed a framework that illustrates the key dimensions of strategy formulation. In addition, We categorised the firms according to where they are in their digital transformation journey: planning, introducing, transforming or operating. We found that firms take very different approaches to digitalisation with some eager to exploit new technologies to achieve ‘first mover’ advantage where others prefer to minimise their risk by taking a more incremental approach. We categorised the firms into four distinct types: Prospector, analyser and Defender. Our developed framework shows how key dimensions of strategy formulation affect the strategising process, which in turn affects the content of the strategy, and, ultimately, a firm’s performance.

We identified the following factors that will help firms develop successful digitalisation strategies:

1. APPOINT DIVERSE TEAMS. Appoint people with different experience and backgrounds at different levels within the organisation and representing all key functions.

2. DON’T BE AFRAID TO TACKLE COMPLEX PROBLEMS. Problem complexity can be your friend: the more complex the problem the more comprehensive your approach is likely to be and the greater the need for structure.

3. BE WILLING TO EXPERIMENT. Being able to experiment is critical in these two phases resulting in a more comprehensive, better structured and faster process.

4. BRING IN EXTERNAL SUPPORT. Asking for support from external sources at this stage can help speed up the process.

5. MAKE SURE YOUR LEADERS ARE ‘RATIFIERS’ AND CHAMPIONS. Management roles are critical at the implementation and operating stage of the process.

6. KEEP EXPERIMENTING! Being able to experiment is still important in these later phases where it can speed up decision-making.

7. ENSURE YOU HAVE GOOD TEAM DIVERSITY. Team diversity will give you a better structured process in these later phases.

8. CONTINUE SEEKING EXTERNAL SUPPORT. Utilising external support will improve process comprehensiveness and structure.

Deliverables and other tangible outputs

1. An executive briefing that have the blueprint and the research analyses is published at the Institute for manufacturing and University of Sheffield websites for dissemination.
https://www.ifm.eng.cam.ac.uk/uploads/Pitch_In_Digi_Strategy_pdf_web.pdf

2. We are preparing to submit a paper to an international journal called MIS Quarterly

Impact

As a result of this project manufacturers have been provided with guidelines that enable them to develop successful IoT strategy formulations. The report has been disseminated to the Cambridge Service Alliance, Institute for Manufacturing and Sheffield industry consortium. This will help the research team to follow up with these firms and build some consultancy exercises. Also, an executive training program is designed at the Institute for manufacturing to help firms to strategically design and manage their future digital services and customer experience.
https://engage.ifm.eng.cam.ac.uk/project/customer-experience/

Next steps

The project team prepares couple of research fund bids to captialise on the findings of this project. Also, we will explore to extend this work with the Cambridge Service Alliance partners and focus on how firms can mobilise data as a key resource to drive new revenue streams and business models.

Lessons learned

An excellent multi-disciplinary partnership developed between Cambridge University and Sheffield University academics that will continue well beyond the end of this project. The Pitch-In support teams were extremely helpful and assisted us to meet objectives, despite the challenges caused by the Covid pandemic.

The pandemic created challenges in gathering data and outreach. As such our approach to gathering data had to be adapted. An external market research agency was commissioned to gather data but struggled to gather to 2 phases of data from executives in a business to business context.

Again, Covid-19 has disrupted our face to face communication and engage with industries. We wanted to validated the blueprint by conducting workshops. However, we designed a survey to collect firms perception through the marketing research firm.

Access to deliverables, resources and media content

Please find the link of the executive briefing in the below link:
https://www.ifm.eng.cam.ac.uk/uploads/Pitch_In_Digi_Strategy_pdf_web.pdf

Please find the executive course in the below link:
https://engage.ifm.eng.cam.ac.uk/project/customer-experience/

Project lead:

Dr Mohamed Zaki – University of Cambridge

Prof. Fraser McLeay – University of Sheffield

Partners:

Cambridge Service Alliance and IFM industrial partners in partnership with Sheffield University Management School (e.g., Caterpillar, CEMEX, HCL technologies and many others)

https://cambridgeservicealliance.eng.cam.ac.uk

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  • Report: How to create a digitalisation strategy that works

    Taking an interdisciplinary approach which draws from research into strategy, service, marketing and technology, this project set out to explore how manufacturing firms are approaching digital transformation and to develop a blueprint that will help firms formulate successful digitalisation strategies.

    Download full update report (PDF)

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