Digital Transformation: Evolve to solve
It's easy to sink money into digital transformation, yet without the right mindset and a clear understanding of what is the commercial goal of the investment, that can quickly be money wasted. For global manufacturers, those needs can vary depending on culture, industry and location, so a dedicated project management team is crucial.
Emma-Jane Batey speaks to multinational plastic packaging manufacturer RETAL to understand how its strategic implementation of digital transformation is supported by a cross-border project team.
Nimble and agile are words usually associated with start-ups, yet global manufacturers can also be flexible and responsive when the right people are in charge of the right projects. Internal engagement also needs to be positive to support the project, with a clear understanding on what the goal of the project is and why it is necessary.
McKinsey & Company notes that digital transformation projects can be 'even more difficult than traditional change efforts to pull off', due to the fact that studies show the investment rarely reflects positively on the success it delivers, particularly for more traditional industrial and manufacturing industries. Yet the potential benefits still seem to outweigh the statistics, with a success rate in these industries of just 4 to 11% seemingly not stopping huge numbers of companies from implementing such projects.
What McKinsey does highlight is that, to be in that coveted 4 to 11%, certain factors must be in place, specifically a clearly defined operating model, a broad width of scope, and a positive approach to adopting technologies. Global PET packaging manufacturer RETAL operates 15 factories worldwide, across Europe, Asia and the US, and it is currently in the process of implementing a digital transformation project at its Lithuanian site, with plans for a global rollout, with an understanding of these core factors and the role they play in the potential success of the project.
Engagement mentality
Appropriately, RETAL's digital transformation project codename is Evolution, which reflects the value the company has placed on it and the open-minded approach the project team employs. RETAL business process expert and Evolution team member Javed Iqbal is part of the Evolution team, which represents the largest investment in software ever made by the company, and the team’s progressive approach is helping to create the right engagement mentality. Iqbal says, “The goal of our digital transformation is to support the business in making informed decisions. This can only be achieved when we have real time reliable data, enriched with our years of industry-specific knowledge.”
This important combination of data and expertise is at the crux of the value of digital transformation for a large-scale industrial business, as without both it is unlikely the project will fall in that successful 4 to 11%. Iqbal continues, “We were driven to implement digital transformation across RETAL by identifying that too much of our various experts' precious time was being spent on tasks that could be automated, freeing them up for more important work that progresses our business. By establishing a dedicated project management team and setting a clear timeline, we're seeking efficiency and the automation of tedious, regular work using SAP ERP.”
Identifying that 'tedious, regular work' was an important initial task in the Evolution project, needing to take into account the cultural differences of many of RETAL's facilities worldwide, where sharing key details of products and their production processes can be a challenge. Iqbal adds, “Standardising processes is hugely valuable for a global company where many of our products are available from numerous sites; there is no value in repeating a manual task unnecessarily, and a project team with a clear overview can see that. But we also have to take into consideration our experts and how they justifiably protect their intellectual property; understanding what can be standardised and what needs to be clearly documented for the good of the company is paramount.”
Implementing digital transformation across RETAL is driven by the collective aim to protect this IP of its experts and their many decades of highly specialised knowledge while utilising the speed of operation brought by SAP, in order to achieve better results and stay ahead in a competitive market. Iqbal says, “Our project team is being extensively trained on SAP technology so they in turn can continuously support the rest of RETAL's workforce in using SAP as our ERP system.”
From tender to partner
The Evolution project started with a commercial tender to find a suitable consulting firm for the project implementation, with experienced SAP integrator LeverX Group chosen following its successful tender. This was followed by RETAL choosing to buy the 'Model Company for Multinational Corporations' package from SAP after careful assessment of the options. A project team was then mobilised from across RETAL in order to ensure that different business areas were represented, resulting in creating an internal 'Center of Excellence' that deeply understands the business and how this ERP software implementation will benefit the organisation as a whole.
Vladimir Karely and Nadya Tretyakova are part of the LeverX Belarus office that is now working with RETAL to integrate this digital transformation, with their careful analysis of what the company needs key to it winning the tender. Karely says, “As a full-cycle services provider we are proud to be known as a trusted SAP partner. All companies have different needs and their specific requirements have to be carefully understood for the project to be successful. Part of what we do well is to make sure we know what the company is already doing well; there's no need to duplicate something that's working and will likely continue to work well. The skill is in knowing what we can change for the better through clever digitalisation, and how in turn this can be implemented across a global organisation.”
Tretyakova appreciates the importance of previously-executed projects in highlighting LeverX's capabilities, saying, “We had a positive reference for a customer in Lithuania who proposed us as a reliable partner. Having our own goals for the project is key too; as we are currently in the exploratory phase, we have clearly defined what we need to know in order to keep moving forward. Preparing for a well-executed deployment of the pilot project is crucial in setting the right foundation for the global roll-out.”
Javed Iqbal agrees that the pilot project underpins the potential for the company-wide roll-out, so to help this he is vocal about the importance of the Centre of Excellence in bringing the Evolution team's learnings to RETAL as a whole. He says, “Part of the project is our Centre of Excellence, which is an on-line hub of information that captures what the Evolution team has learned and can then share with other RETAL employees. This group is being extensively trained on SAP technology and will reach professional SAP consultant level so we do not have to rely on external consulting firms long term. Giving responsibility for sharing is empowering, not to mention hugely helpful as a marker of the project. Mobilising our internal team selected from different business areas means that all elements of RETAL's global business is represented and acknowledged in our digital transformation.”
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