Industry 4.0: A Guide in 4 Parts

The term “digital transformation” has become an indispensable part of everyday corporate life. But it is vague and does not offer much insight into practical aspects of this process. At which point has a company completed its digital transformation? Digitalization today goes far beyond the use of computers. At its heart is the interconnection of people, machines and products through information and communication technology; insert “Industry 4.0”.

So what might a digitalised company look like in the midst of the fourth industrial revolution? To speak of “digitalised companies” implies that digitalisation has a beginning and an end point. But in a world that is constantly evolving technologically, this is no longer the case. Rather, digitalisation is a transformation process that involves connecting to and navigating in a world that is characterised by ever increasing digital developments and technologies. This applies to individuals as well as to companies and involves a constant learning and improvement process.

What stage of development has your company reached in this process? We have compiled four central aspects that will help you understand and optimise the status of digitalisation in your company. 

1. Does your company use (the right) software?

Did you know that one of the most effective measures in the digital transformation process of companies is the optimization of already existing software? In the body of your digitalised company, the software is the skeleton. In order to determine how stable this skeleton already is and where to operate, it helps to look at different parts individually. The following guiding questions can provide an orientation aid during the examination: 

  • Which areas are already covered by software?
  • Is the software used still the best option for you?
  • Are there alternatives that are cheaper, more efficient or more productive?
  • Which recurring areas are not yet covered by software solutions?

A practical example: Customer Relationship Management

Two central aspects of Industry 4.0 are the use of data and customer-centric solutions. CRM systems are indispensable for companies to accurately capture large amounts of customer data, which then help to focus on the individual wishes of customers. The effectiveness of your CRM system can therefore have a decisive impact on the future of your company.

How can you optimise your CRM system? For instance, by switching from a desktop system running on a single PC to a server or cloud-based system. A central database, which all employees of the company have access to, ideally also on mobile devices, makes the cooperation between different departments much easier and more effective. To avoid misunderstandings and ensure a smooth transfer of knowledge between employees, there should be standardised guidelines for the use of such systems.

2. Is your company meeting the need for digitalisation?

In some industries the need for digitalisation is more concrete than in others, that much is evident. But it is equally safe to say that no industry is excluded from digital transformation processes. Even in agriculture the importance of digital tools is growing, for instance in the regulation of irrigation processes, the optimisation of plant growth, or compliance with quality guidelines. 

The digital transformation of the corporate environment is not a temporary, drastic event — making it all the more important to keep pace with the steady transformation. Just because there is no concrete need right at this point does not mean that this cannot change in the (near) future. 

A disruption in the business environment can bring about sudden and sometimes dramatic changes. This can be a technological development or–something that has long been underestimated–a pandemic. Cue: Covid-19. Even those companies that previously had little to be concerned about in terms of specific digitalisation procedures, were suddenly faced with the challenge of coordinating work processes from a distance. According to a study by the German Fraunhofer Institute for Industrial Engineering IAO, during the corona pandemic, 70% of all surveyed companies have employees working from their home office. 57% of employees had participated in a digital meeting for the first time.

The moral of the story’: Disruption hits those companies hardest that are relying on their current level of development and are “future blind”. Although disruptive events are relatively rare in the corporate world, this does not mean that they do not exist and will not cause immense difficulties for unprepared companies.

3. Is your company’s cyber-security and data protection mechanism up to date?

Did you know that according to a Bitkom survey of 2019, about three quarters of more than 1,000 German business representatives interviewed experienced a cyber attack? Cybercrime Security Ventures estimates the annual damage caused by cyber crimes to reach $6 trillion by 2021. The bottom line: Anybody who associates cyber attacks with predominantly Russian hackers and US elections is betting on the wrong horse.

Yet a great many attacks can be prevented relatively easily. For example through regular IT updates – because hackers often exploit known gaps in IT security. Two-factor authentication is a similarly easy means of minimising external security threats from stolen credentials. 

In data protection, as in IT security, one of the biggest threats to companies are their own employees. Training them is one of the most effective measures against criminal attacks. Sensitise your employees to social engineering, i.e. the interpersonal influence of informers with the aim of obtaining sensitive data. Also the handling of phishing mails should be learned in order to prevent the theft of personal data and thus reduce possible areas of attack on your company. 

Conclusion: Do not underestimate data protection. Do not save on IT security. Educate yourself and your employees about these topics in full range and consult experts if necessary.

4. Do your company's employees have the necessary digital skills and stay up to date?

A company is only as digitalised as its employees. The world’s best software solution, digital foresight and data protection measures are of little use if they fail in use and implementation. Because the main users are the company’s employees, it is absolutely essential to keep them up to date and thereby ensure a successful digital transformation process.

How is this done? Common methods of digital learning are web-based trainings or virtual classroom trainings. While very important, these kinds of formal learning processes are usually a single instance. The problem here is that the human brain forgets more than three-quarters of something newly learned after six days, on average. An important strategy to counteract this is the regular repetition of newly acquired knowledge.

This usually takes place in practice, that is when formally learned knowledge is applied at work. However, it is not uncommon for initial memory gaps to appear between the initial acquisition and first application of knowledge. Spontaneously occurring problems or new software updates that require additional skills can also cause further difficulties (keyword “Five Moments of Need”). This is where informal learning comes in, be it in exchange with others, such as colleagues or superiors, or along the workflow itself. With the help of bite-sized information, for example in the form of step-by-step instructions, the employee can help himself exactly when and where help is needed.

Informal learning actually makes up a major part of the learning process.  According to the 70:20:10 model, 70% of learning activities take place directly in the work process, 20% in exchange with employees and only 10% in formal training. Accordingly, it is important to provide support to employees in the workplace. If you have not yet implemented a performance support system in your company, our documentation software FlowShare promises a successful start. With FlowShare you can quickly and easily create step-by-step instructions and make them available to your employees.

Conclusion

The fact of the matter is, digitalisation is an integral part of today’s corporate world. It is no longer a question of whether a company is digitalised, but to what extent. Sooner or later, companies that are unwilling or unable to adapt to a constant process of learning and improvement, will no longer be competitive in an increasingly digitalised world. 

Therefore it is absolutely essential to keep up to date with new developments, adapt your company accordingly, and–very importantly–don’t rest on what you have already achieved. We’d happily inform you about current trends in the world of IT. Simply subscribe to our newsletter at the bottom of the page and receive regular updates!