MIT Sloan Management Review Article on Why Manufacturers Need a Phased Approach to Digital Transformation

As complex as digital transformation can be for manufacturers, leaders in that sector tend to view it as a single process, the success of which can be demonstrated via a single metric: return on investment.

Such a simplistic view belies what’s actually involved: investing in and mastering new operational technologies (OTs), reskilling workers, keeping capabilities in sync with external supply-chain partner infrastructures, and enabling new digital ecosystems for partners and customers. Digital transformation for manufacturing differs substantially from transforming IT services or implementing e-commerce, because it requires combining the staged integration of physical assets with digital technologies. For these and other reasons, many manufacturers struggle to adopt transformative tech and end up misaligning and wasting their investments or misdirecting their scarce specialized resources. As a consequence, their digital investments generally fail to enable the business transformation they seek.

About the Author

Nitin Joglekar is an associate professor of operations and technology management at Boston University’s Questrom School of Business. Geoffrey Parker is the Charles E. Hutchinson ’68A Professor of Engineering Innovation at Dartmouth College, a fellow and visiting scholar at the MIT Initiative on the Digital Economy, and a coauthor of Platform Revolution: How Networked Markets Are Transforming the Economy (W.W. Norton, 2016). Jagjit Singh Srai is the director of research in the Department of Engineering at Cambridge University and chair of the World Economic Forum Council on Advanced Manufacturing Value Chains. The authors are listed in alphabetical order; each contributed equally to this article.

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