Business Digital Transformation Strategy
- 1. End-to-End Digital Integration for Product Design and Delivery Digital Transformation Planning
- 2. ProposalOutline Reality Check Current issues and mission to regain leader position through digital transformation Overall Business Strategy Proposal Repositioning product design and marketing, powering next phase of growth through system integration Digital Capability Booster Plan Enable digital capability in People and Process Product and Service Transformation Roadmap Creating and capturing value from the transformation to new technologies in Product and after-sales service A B B1 B2 C Implementation Timeline and Success Measure D Summary
- 3. RealityCheck Hi, Michelle, I was looking at the data you sent, numbers are not looking so good. I see, it might be time for us to make some fundamental changes. Can you and your team work on the solution? No, they are not. We are hit by more than a couple of things. Sales are down. Other brands similar products are selling cheaper. Our new model launch was delayed again. Now it is finally here but our competitor has beaten us on first-to-market. Then it’s the spare parts problem, we are short in EMEA. Customers are not happy. Sure thing, in fact, we have been working on a digital transformation strategy for a while. If you have 30 mins, I will walk it through with you.
- 4. Whereweareandwherewewanttobe “Be No.1 in everything we do.” We are NOT living up to its own expectation today. Where we are now Innovation Design & Engineering Marketing Our core competencies Innovation losing edge • Behind competitor at “Wet Vacuum Cleaning • Personal Care products delayed launch Sales down • Losing market share to competitors from China and US • New products are quickly “copied” Customer satisfaction down • Long waiting time for repair • Product availability First to Market Consistently • Regain No1 position in ”Vacuum Cleaner” • Continue leader position in ”Hair Styler” Regain Market Share • Beef up product innovation level • Regain market share in US and China Increased Brand Loyalty • Extend Direct-to-Consumer sales channel • Introduce Gen-AI for personalized service Where we want to be Transform our strategic resources and bring the business to where we want to be
- 5. OverallBusinessStrategyProposal Product Design Customer Experience and Marketing Internal Manufacturing Upgrade product connectivity. Use digital tools and AI to accelerate innovation, improve product design, and personalize the customer experience. Implement Gen-AI in e-commerce channels and hyper-personalized product recommendation Invest in digital tools and training to equip the workforce with the skills needed for a successful digital transformation. Implement End-to-End Integrated Business Planning system to improve transparency and accuracy through supply chain planning and product delivery efficiency. Implement IoT and data analytics in Internal manufacturing and integration to Finish Goods Global Supply Chain to improve cycle time. People Empowering Global Supply Chain Objective • Bring digital transformation to the core competency • Enable continuous technology renewal and value realization cycle
- 6. Product/ServiceTransformationRoadmap Product Creation – Highest priority • Accelerate Product Innovation cycle with Gen-Ai: Prototype and iterate on new product designs with Gen-AI. • Build product tech stack, enable product connectivity: Gather customer data to understand usage patterns, generate new design ideas. • Create Digital Twins: Create digital twins of products to simulate real-world usage and performance. Creating and capturing value from new technologies transformation in Product and Service After-Sales • Data Analytics: Leverage customer data and feedback to understand preferences and pain points. Leverage usage data for predictive product servicing activities and spare parts planning. Digital Marketing • E-commerce Platform: expand direct-to-consumer sales and provide a seamless online shopping experience. • Digital Marketing: Use targeted digital marketing campaigns to reach new customers, highlight product features, and build brand awareness. • AI Recommendations: Develop AI algorithms to provide personalized product recommendations, maintenance tips, and troubleshooting guides based on individual customer data.
- 7. AllthingsStartwithProduct Transformation Build Data Eco-system through Product Connectivity Enhancement Cloud Responsible for receiving data from multiple devices, storing it, processing it, and sending commands to the devices.. Business System Integration – Further elaborated in Integrated Business Planning Internal Business Infrastructure: Data processing from devices, enterprise business operations. External Business Infrastructure: External manufacturing and service provider. Mobile Application Allow users to interact with the device. The app communicates with the cloud to send commands to the device and receive data from it. Product • Hardware : physical layer, IoT device, wearable, smart home device, enabled with sensors, actuators, and communication modules (e.g., Wi-Fi, Bluetooth, or cellular). • Firmware : the software runs directly on the device, controls the hardware of the device, collects data from the sensors, and communicates with the cloud. Product IoT + Firmware Cloud AWS IoT, Azure IoT Mobile devices External Business Infrastructure Source (CMs, 3PLs) Business System Integration Identification Data privacy and Security Personal Data Connection Internal Business Infrastructure (DBs, SAP) Across all layers, security is crucial. This includes secure communication, device authentication, data encryption, and regular security audits.
- 8. IntroduceNewWoW(WayofWorking) “Digital Factory” enable product connectivity enhancement faster Connectivity Digital Factory Key Functions • Build and enhance product and process connectivity level • Product Design for Connectivity • After Sales data collection and analytics Referece: How to scale your digital transformation | McKinsey Business Unit B, N, H, W Marketing &Sales Operations New Prod. Innovation & Dev. Supply Chain and Customer Service Engineering Quality and Safety Connectivity Digital Factory Team 1 for BU-N Team2 for BU-B Team 3 for BU-W Team4 for BU-H Executive Committee and Board IT, Legal, HR and other supporting functions • Business Units formed based on product categories, functioning as product portfolio manager and supported by Global functions • Connectivity as the Digital Eco-System enabler, is a stand-alone function, reporting directly into Executive Committee, integrated to broader business, and working mainly with • New product innovation and development • Engineering • Supply Chain and After Sales • Teams in Digital Factory work as start-up accelerator, introducing New WoW: design thinking, zero-based process reengineering, and agile software development. Organizational ”Digital Transformation”
- 9. IntegratedBusinessPlanning Enable faster and more accurate business planning through connected product and system By integrating internal business planning infrastructure with external business infrastructure, Digital Transformation of Supply Chain bring two critical levers of transformation : creating and capturing value from the transformation to new technologies and the road map to get there, with initiatives balanced by value and risk to build capabilities across the supply chain. External Business Infrastructure Source (CMs, 3PLs) Internal Business Infrastructure (DBs, SAP) IBP management is a review process to assess risks and opportunities for long term planning in ensuring business meet sales and financial objectives for a defined function/region, through a collaboration with cross functional team
- 10. DigitalCapabilityBooster Boost Internal Manufacturing Capability • IoT Sensors: Embed sensors in manufacturing equipment to monitor performance, predict maintenance needs, and optimize production processes. • Predictive Analytics: Use data collected from IoT sensors to forecast demand, manage inventory levels, and streamline supply chain operations. Leadership A Resource Allocation B Cultural Renewal C Training and up-skilling empowering Employees with Digital Tools and Training • Digital Collaboration Tools: Provide employees with modern collaboration and communication tools to foster innovation and knowledge sharing. • Training Programs: Invest in training programs to upskill employees in digital technologies and data-driven decision- making. D Bring ”connectivity” to leadership level • Install chief level position for product connectivity champion • Organizational Change - Formation of Business unit and streamline product portfolio. Prioritize digital transformation and eliminate duplication • Baselining ”connectivity” in new product innovation • Design System integration - Breakdown project silos, eliminate resource duplication through system integration.
- 11. DigitalCapabilityBooster Take Performance Management to aNew Level • Link digital transformation goal to performance review of project team. Setting clear deliverables and monitor the progress continuously and transparently. BuildingEcosystem E BuildingCulture of Change G Talent andSkills F Focus on talent retention when upskilling and training the team • Digital talent plan: attracting and retaining digital talent by providing competitive compensation package and opportunities to continuously developing their skills through job rotation or manager development programme. H Bring ”connectivity” to business partners. • Explore digital partnerships or collaborations to accelerate digital transformation with major e- commerce platform and retailers. Forster culture of change • Promote cross-function collaboration and break department silos. • Encourage open communication and transparent decision-making process, involve and engage employees through team-building, workshops and brainstorming activities.
- 12. High-LevelImplementationTimeline Regain leadership position GAI MILESTONE 01 • Introduction of “Connectivity Digital Factory” through transformational restructuring. • Identify Project/Products in Focus • Introduction of CM ERP Integration. MILESTONE 03 MILESTONE 02 MILESTONE 04 2nd H 2024 1st H 2026 2025 2nd H 2026 START • 1st group of fully connected product rolled out. • Contract Manufacturing ERP Integration completion for new product. • Direct-to-Consumer platform fully enabled by Gen-AI. • Predictive Spare part supply planning based on Customer product usage data starts. • Internal and external Business planning system fully integrated. End-to-end IBP fully installed. • Contract Manufacturing ERP Integration completion for all products.
- 13. SuccessMeasure Digital Maturity Model IoT Data Lake Analytics IoT + AI + Robotics ML Sensing data using sensor DATA Connect, aggregate data Consolidate data in a central repo Analyze & find Insights Predict using data & Intelligence Autonomous Automation CONNECTIVITY VISIBITLITY INTELLIGENCE PREDICATABLE AUTONOMOUS INDUSTRY 3.0 INDUSTRY 4.0 Customer Experience Data & Insights Strategy & Leadership Technology Operations Culture & People Organization Marketing Cyber Security Brand Management Pre– IoT IoT/Conn ectivity Data Lake IoT + AI + Robotics Analytics /ML Current State Target State Use Digital Maturity model to manage and measure Industry 4.0 capability Reference: 5 Stages Of Industry 4.0 Maturity Model | Fogwing Industrial Cloud
- 14. SuccessMeasure Business Performance Indicator 0 0.001 0.002 0.003 0.004 0.005 0.006 0.007 0.008 0.009 Jan Feb Mar Apr May Jun Return Rate Customer Engagement 5-star Rating 0 2 4 6 8 10 12 Jan Feb Mar Apr May Jun Sales Revenue 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 Jan Feb Mar Apr May Jun Sales Conversion Rate • Our Digital Transformation will eventually translate to business performance improvement. This can be easily monitored through 5-star rating on e-commerce and revenue and conversation rate increase, and return rate reduction.
- 15. Operations Aim to optimize its operations by implementing an end-to- end integrated business planning system. This system will improve transparency and accuracy throughout the supply chain, from planning to product delivery. Additionally, use IoT and data analytics to improve cycle time in manufacturing and integration with the global supply chain. Measuring Success Use Digital Maturity Model to assess its progress toward Industry 4.0 readiness, track key business performance indicators such as sales revenue, conversion rate, customer engagement, and return rate to measure the impact of its digital transformation efforts. Link performance review with digital transformation effort. Customer Experience and Marketing Enhance the customer experience by expanding its direct- to-consumer sales channel and providing a seamless online shopping experience. The company will also use targeted digital marketing campaigns and AI-powered personalized product recommendations to reach new customers and build brand awareness. Strategy and Leadership With appointment of Chief Digital Officer, we are committed to digital transformation. The company will form a "Connectivity Digital Factory" to drive the transformation and establish clear leadership and governance for the initiative. Technology Leverage various technologies to achieve its digital transformation goals. These technologies include IoT sensors , Data Analytics, Predictive analytics, Digital Twins and Generative AI Culture and People Recognize the importance of empowering its workforce with digital tools and training. Invest training programs to upskill employees in digital technologies and data-driven decision-making. Additionally, work on attracting and retaining digital talent. . Summary