Digital transformation – definition and practical tips - Blog for mechanical engineering & industry

People have been talking about the concept of digital transformation for years, but it is often used as a mere buzzword. Find out exactly what this concept is all about.

New technologies are simplifying our everyday working lives in many sectors, with just a few clicks replacing umpteen manual steps, forms or calls. According to the recent “Digitalization 2024” study by Staufen AG, this is a focal point for most companies. Some 82% are driving forward the digitalisation of their processes, whereas just 30% are addressing the transformation of their business model. When it comes to optimising internal processes, purchasing departments spend a great deal of time sourcing and buying products. The transformation of their business model, on the other hand, is a continuous process. Digital solutions for internal processes have a direct impact. Important information is stored in the cloud and can be accessed at any time, while web conferences bring together interdisciplinary teams across borders and time zones. Efficient services, such as chatbots, relieve the strain on customer service staff. At the same time, customers can get basic information even faster. Selecting the right partners also contributes to process optimisation. State-of-the-art online shops save purchasing departments a lot of time when they are sourcing and buying products.

The digital revolution offers particular benefits for industry. The following are just a few examples. Artificial intelligence (AI) gives cobots cognitive capabilities. The Internet of Things (IoT) creates a seamless link between the physical and virtual worlds. Extensive networking of intelligent machines leads to a smart factory, resulting in a previously unimaginable degree of transparency about aspects such as capacity utilisation, error rates, and downtime. Innovative, cloud-based online tools are taking design engineering to a whole new level. Intelligent functions automate time-consuming steps and specifically prevent errors. The actual driving force behind this change is digital transformation. This term is as fascinating as it is vague – all the more reason to get to the bottom of it! As a pioneer in digital engineering, we are happy to share our knowledge with you.

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Digital transformation vs. digitalisation

What is digital transformation, and how does it differ from digitalisation? This is where things quickly become nebulous, partly due to the ambiguity of both terms. They are often used synonymously. Let’s start with digitalisation as a technical process. In a narrower sense, it means converting analogue information into digital information. The digitalisation of a company can mean two different things. In most cases, the digitalisation process starts with the optimisation of internal business processes. Testing specific tools on a small scale in pilot projects streamlines processes, and the time saved relieves the strain on staff. Many industrial companies are familiar with optimisation measures of this kind, as they fit perfectly into the continuous improvement process (CIP). The other aspect of digitalisation at companies focuses on their business model, which can either be adapted or redefined.

The term ‘digital transformation’ refers to the comprehensive, continuous process of change at a company. In a broader sense, it means the transformation of society as a whole.

The industry has seen the emergence of countless new digital business models, including the development of software based on virtual reality (VR). Companies can use VR to plan production processes. One possibility is combining Halocline VR software with our item Engineeringtool and item Work Bench Configurator, which you can use to plan an assembly work bench, for instance. You can then try this out virtually in Halocline. Besides saving you a great deal of planning time, this also prevents planning errors and thus optimises your operational processes. “Digital transformation” is the overarching concept. It refers to the comprehensive, continuous process of change at a company. In a broader sense, it means the transformation of society as a whole – the changes digital technologies are bringing about in all areas of our lives. Anyone talking about digitalisation in general terms means something similar, but the emphasis on the continuous process is missing. A precise description is only possible with reference to digital transformation.

Initial steps for the digital transformation of companies

Where do you start when it comes to the digital transformation of a company? Optimising internal business processes has proved effective, enabling you to adapt technological resources to changed customer expectations. In design engineering, for instance, shorter project times and flexible adaptation options have become increasingly important. Digital engineering offers a solution. By using our free item Engineeringtool, everyone involved in the project saves a considerable amount of time. This online tool is located in the cloud, so all you need to use it is an end device with internet access. You can then design all kinds of item solutions directly in your browser using drag-and-drop controls. In the case of standard designs, this is up to 90% faster than using CAD software. Updates are extending the item Engineeringtool on an ongoing basis. For example, you can now also make use of the item Conveyor Belt System and design machine enclosures with appropriate material supply solutions. The purchasing department benefits from project documentation that is generated automatically. There is also a direct link to the item Online Shop, where you will find practical sample solutions. Selected designs take you to the item Engineeringtool with a single click. An animated 3D assembly guide helps assembly staff, and our digital ecosystem links the various areas.

“In the item Academy, you will find everything from product guides and online training units on basic topics to webinar recordings and practical tips for your everyday work.

Selecting a supplier with digital expertise sets you on the right course. Further training is another important aspect. Cloud services such as Google Drive offer you an easy way to share knowledge with all staff. Options such as in-house wikis take things a step further. All these solutions have one key advantage – you can use them wherever and whenever you want. The same applies to external online further training courses. Imagine you are looking to roll out lean production throughout your company. The main challenge is that as many staff as possible need to attain the same level of knowledge quickly in different languages. This is practically impossible using conventional in-person events. A training platform such as the free item Academy is an ideal solution. The online modules about rolling out lean production are perfect for this purpose. In the item Academy, you will find everything from product guides and online training units on basic topics to webinar recordings and practical tips for your everyday work. All you need in order to access it is a free item user account.

The path to new business models for the digital future

Developing new business models sounds complex. Digitalisation terminology and innovations such as Industry 4.0, artificial intelligence, big data, and blockchain can be intimidating. However, this is a skill that can be learned. Numerous areas of mechanical engineering have now adapted successful business models from other sectors. One example is the subscription model. There is no need to actually buy a machine. Instead, it is leased out for a specific period. It always remains the property of the manufacturer, who can see all the performance data via an internet link. This provides the basis for predictive maintenance. Tiny irregularities enable imminent defects to be pinpointed before they actually occur. This is also an example of the Internet of Things. You will find the relevant interactive online training module in the item Academy here.

Basically speaking, your focus should always be on customers. What challenges do they face, and how can these be resolved?

How do you develop a new business model, though? The best approach is to rely on established tools. The Business Model Navigator is very popular, for instance. It was developed by Oliver Gassmann, Karolin Frankenberger and Michaela Csik at the University of St. Gallen in Switzerland. There are four key questions to focus on:

Who are the target customers?
What is promised to customers?
How is the product or service created?
How exactly is value created?

Among other things, 55 typical patterns for successful business models have been incorporated into the model. Basically speaking, your focus should always be on customers. What challenges do they face, and how can these be resolved? Another well-known aid is the Business Model Canvas developed by Alexander Osterwalder. However useful models of this kind are, though, they only help up to a certain point. Due to the platform economy, digital business models are highly complex. Want to find out more? Our free white paper, “Digital strategy in mechanical engineering – what it all comes down to” will tell you all about a special model for this challenge.

The Business Model Canvas is a tried-and-tested tool for developing digital business models.

Further information about digital transformation

For a number of years now, the item blog has been reporting on numerous aspects of digital transformation. Topics range from the new possibilities for SMEs to the relevance of digital customer experiences. You also have access to free digitalisation studies and white papers focusing on specific topics. Find out more about digital processes in mechanical engineering here:

Are you interested in digitalisation and what the future holds for mechanical engineering? Then we have something that’s right up your street! Simply subscribe to the item blog by completing the box at the top right.