ARC’s Top 25 Industrial Digital Transformation
ARC Advisory Group
The industry analyst firm, ARC Advisory Group, recently announced the publication of their analysis of the 25 manufacturers with the most mature digital transformations. The report identified leaders and highlighted best practices. This is the first edition of the report. The ARC Industrial Digital Transformation Top 25 report highlights leading manufacturers that are excelling in integrating digital technology into all areas of their business, fundamentally changing the way they operate and deliver value to customers.
“Leaders in digital transformation across many different industries share common traits and visions,” explained Marianne D’Aquila, “helping them overcome complex challenges to innovate and stay agile. Industry innovation continues to accelerate and leading companies have their transformation initiatives well underway. For those who succeed, the result is competitive advantage, even during the toughest economic times. Ms. D’Aquila is director of research at ARC.
Tesla took first place, followed by Intel, BMW, Johnson & Johnson, 3M and Eli Lilly. Tesla’s report says, “When Tesla sets out to automate its internal processes, they try to build it better from the start rather than start a clumsy project and hope to improve on revision 4 or 5. This direction is fundamental to determine what KPIs are the company’s values, because many of them are very different from the measures managed by manufacturers who rely on traditional visions of success.
The report takes a holistic approach to what digital transformation means. “Leading companies are taking a strategic approach, integrating digital technology throughout their value chains. Design and engineering, production operations, maintenance, logistics, supply chain, business systems, customers, products and organizational structure are subject to innovative changes as companies examine and update processes and deploy new tools and technologies.
There are a few key approaches to digital transformation. A common thread is clarity around a starting point. Effective digital transformation only happens if the organization links the change to some external market or customer signals. But transformation also requires a culture shift enabled by machines and data. The topic of how leaders can accelerate cultural change occupies a large part of the report.
Almost all of the companies surveyed by CRA noted that when they began their journey, they quickly recognized that they didn’t have all the answers. In fact, their digital champions began by aggressively expanding their sources of wisdom beyond their historical and current resources. Digital leaders learn from others.
To create the Digital Transformation Top 25, ARC developed a rigorous process based on financial performance, a ranking system based on community intelligence, and software and sustainability data. Publicly available financial information, primary and secondary research from ARC, data from the ARC Market Database, and opinions from members of the ARC end-user community have all been considered in classification.
A dose of reality is that despite tremendous progress, aside from companies that started with transformation as part of the mission statement, no completely transformed companies exist. Additionally, there are two major issues that keep industrial executives up at night. The first is to maintain a competitive workforce. The second is durability. In short, even for laggards, there is room to accelerate a transformation and become a leader in the future.