We started investing heavily in digital transformation only a few years ago. We can observe digital transformation through two segments – Evolution or Digital Performance Management which means continuous business improvement and Revolution or Disruption Management which means the response of digital transformation through a technological revolution. Furthermore, we talked about the evolution and revolution of digital transformation with the leading expert in this field Zlatko Šimunac, owner of CADCAM Group, a leading provider of services and software solutions for product development, production optimization, and product lifecycle monitoring in Croatia, operating in five countries and on the market for a full 30 years.
How would you explain the evolution and revolution of digital transformation simply?
Historically, in every industrial revolution, there has been some new technology that has changed the market, from the steam engine to the electric motor or automation to today, the dawn of the digital age. With the extremely rapid advancement of technology, computers have become cheap and accessible to all, and the ability for all data to be processed digitally has been created. This gives us huge business advantages, computers do routine tasks, run simulations of product behavior while the product is not yet ready, control processes, optimize production, and engineers have more time to devote to innovation in designing new products.
On the one hand, this ensures that the entire process of product development and manufacturing is controlled by the computer and provides traceability of the entire process, and on the other hand, all participants in the process of product development and manufacturing do not waste time on tedious routine tasks. The introduction of such technologies shortens the product development time, creates significant savings, increases product quality, and most importantly, becomes more competitive in the market and ensures progress and survival in the global market.
Evolution is about introducing incremental changes in the company to make the best use of the available resources. It is a lengthy process that requires a lot of human resources and in the end, it turns out to be the longest and most expensive and often ends in business problems. The cheapest resource today is digital technology, but it should be adequately applied and adapted to each business and optimize the existing processes to get the optimal or best solution. Today, the speed of innovation has changed a lot.
To initiate a change in the market, you don’t need big capital or expensive machines, but a laptop and a good creative team. With only these two elements, it is possible to create value for the company in a very short time, literally threaten the competition and seriously threaten the business of all competitors. In this case, it is no longer a continuous business development, but a quantitative step forward, through which new technologies gain an advantage in the market.
Even if the industry is very conservative in the application of new technologies, it is important to realize that those who immediately embrace digital transformation will capture new markets and gain a decisive advantage over those who do not. In practice, there are numerous examples of large companies that did not recognize the importance of digitalization, such as Kodak, and no longer exist today.
Are there prerequisites that must be met for digital transformation to take place?
Digital transformation means four things in particular:
- New technology gives the organization new strengths that traditional companies don’t have
- New users who are interested in new service and new products
- New behavior of existing users is usually overlooked because it is different from new users
- New business model for the company
The most important requirement is that the company’s management recognizes the importance of digital transformation and directs its vision and mission in this direction. The second is to transfer this vision and mission to the heads of each department who understand the benefits of digital transformation and then systematically transfer it to all employees. The devastating fact that we encounter with many of our users is that they don’t understand what we are talking about when we talk about digital transformation, and it is only after the second or third meeting that they begin to understand the values and benefits.
That’s why we have created a center of expertise within our CADCAM group, where processes are constantly improved on the same platform that we use with our customers. In addition, we carry out what is known as BVA (Business Value Assessment) – the evaluation of business values. Together with the users, we go through their processes and everyday challenges at work and show them in the report in which areas digital transformation can help them, what the benefits are and when the investment will pay off. ROI (Return of Investment). Here it is extremely important to capture the current situation and define where the company wants to be in 5 years and what parameters will be monitored to make the successes and achievements of the digital transformation implementation measurable.
What are the successful examples of digital transformation in our country or region?
We started investing heavily in digital transformation only a few years ago. But interestingly, now, during the pandemic COVID 19 and after the lockdown, our companies’ interest in digital transformation has increased dramatically. Our employees are opening new projects every day and advising companies in the region on the best direction to take.
A successful example of leadership in digital transformation is Mate Rimac with Rimac Automobili. Its success is related to the realization that it can only make a breakthrough in the global market by investing in new digital technologies. We are witnessing the great growth and technological boom that Rimac Automobili has created and is currently one of the best technologically equipped companies in Croatia.
Another example is the company AD Plastik, which has distinguished itself for the world, TIER 1 – the first supplier in the automotive industry and products among others and 198 parts for SMART and Renault Twingo cars that can be seen daily on our roads.
We have a third interesting example in the neighborhood – Pipistrels project eVTOL Slovenian flying cargo taxis. This electric vertical take-off and landing vehicles (eVTOL) differ from helicopters in that they are much quieter, safer, more accessible, more environmentally friendly, and fully autonomous.
One of the last successfully defined solutions is the digital transformation of the process of design and preparation of generator production for the company Končar GiM. The management of this company recognized the benefits of digital transformation and set big goals to multiply the design many times over 100% and save 50% on production preparation. POC (Proof of Concept) has already been successfully created and the implementation of the system and training of key users is underway.
These are just a few examples of successful applications of digital transformation. They are our valued customers working with the technology we have proposed to them and successfully implemented together with them.
Is digital transformation a guarantee of success for a company or a product?
There are theorists who argue that the speed of application of digital transformation is critical and would agree, but the path to that success requires the following steps:
- First, digital transformation must be a strategic decision of the company.
- Then, it is necessary to build a creative team to implement and follow the adopted strategy
- It is necessary to define the phases of implementation step by step and the benefits of each phase so that the advantages of the solution are visible in a short period of time
- This is a multi-year project, so it is important that all employees participate in the project with the desire to improve the system and see what benefits it brings them
The combined efforts and work of all employees in the company, software solution providers, consultants, and implementer will ensure the successful implementation of the digital transformation.
CADCAM Group is implementing a digital transformation in the Adriatic region. What is the situation with digital processes in our country in relation to the region?
In the region, historically the most developed country in digital transformation is Slovenia. But since Croatia became a member of the EU, there is an exponential interest and application of digital technologies in Croatia. Currently, Croatia is the leading country in the region. There are a number of factors that have influenced this. Croatia has become a desirable investment destination, especially for high-tech technologies. EU funds and funds that promote investments in digital transformation have come, and the awareness of managers is slowly growing that if they do not invest in digital transformation, they will lose their advantage over the competition.
We are lucky to be able to work with leading companies, but when we talk about Industry 4.0, automation, robotics, digital twins, digital factory management, the implementation could be better, and we have a lot of work to do. There needs to be a government program to encourage investment in digitization, just as at the time of COVID 19 government agencies went digital, and it was adopted incredibly fast, something similar needs to be done for the industry. Some companies are looking for their own ways and solutions to break through, but there is a huge gap between the need and knowledge of these specific solutions, which is actually completely normal.
If someone is a leader in their field of business, such as a metal fabricator, they will not be concerned with IT but with their products and processes. That is why it is important that the leading people of such companies bring top people as external consultants to define their digital transformation project, who are familiar with the software tools and who can bring about such a change and accompany them in this transformation.
How much does create a digital culture in companies influence the success of implementing digital processes?
I would say that this area is one of the most important. Often people have resistance to new technologies and changes. Some are afraid of the unknown, others think that computers will do some work for them and are afraid for their jobs and many other reasons. Therefore, they are ready to reject this new change, even judge it as bad. They do not realize that computers will take over boring and routine tasks, and they will be able to use all their creative ideas and be happier at their workplace. Another problem is leadership, that is, the leadership of companies that do not have the right vision and do not see the positive impact of new technologies on their business.
We are aware of digital transformation and there is a lot of talk about it. We need to be aware that digital technology is not just a tool, it is an experiential way of using it, it is the backbone of the business, the knowledge base of a company, it ensures product quality, it brings savings in product development and production and most importantly it brings a decisive advantage over the competition. And once this is understood, any investment is no longer in question and everyone will find it easier to decide to invest in digital technologies because this investment will provide them with business stability and a step towards competition.
What advice would you give to companies that are just entering the digital transformation?
The advice is very simple, you don’t have to and can’t do everything yourself, but let everyone do their part of the work that they do best. The manufacturer knows how to make his product perfectly, the consultant knows how to define better processes, the implementer knows how to implement and optimize processes with digital technologies, and the software provider can propose the optimal solution and define the best stages of digital transformation. This is the best message for our region.
Unlike the west, we are a nation that loves to do everything ourselves. Instead of bothering with things that are not your core business, focus on what you are best at, and allow your partners to show what they are best at and gain your trust and make a breakthrough in their business together as a team. Most companies say they think they are specific. Yes, maybe in some segments, but not as much as they think. You should not hesitate to call experts, who know your job and so you will be much faster and more efficient to get results.
In my opinion, the greatest value of any leader is that he is aware of what he is best at but also what he is not. Such wisdom, openness, and a willingness to recognize and heed the right advice, to honestly discuss challenges and values are outstanding and key qualities with which one can enter into digital transformation. This is greatly helped by the BVA methodology (Business Value Assessment) – an assessment of business values, which the CADCAM Group offers free of charge to all potential clients. With it, we can make a cross-section of the conditions, processes, and challenges that plague a company in its day-to-day operations. This analysis defines the steps towards the optimal solution and makes a clear path of successful digital transformation tailored to each user.
Source: Poslovni dnevnik