How to think about digital integration and transformation within a company or process.
Embarking on digital transformation for an aerospace manufacturing company signifies a strategic shift towards integrating advanced digital technologies across all facets of operations.
This includes using technologies such as Industrial Internet of Things (IIoT) for real-time monitoring of equipment and systems, implementing artificial intelligence (AI) and machine learning algorithms for predictive maintenance and optimized production scheduling and adopting digital twins to simulate and optimize the performance of aircraft components and systems.
The digitalization pyramid
The digitalization pyramid is a conceptual framework used in industrial and organizational contexts to illustrate the levels of digital integration and transformation within a company or process.
It consists of several layers or stages, each representing different aspects of digitalization. While variations exist, a common representation includes the following layers:
Data collection: The base layer of the pyramid involves the collection of raw data from various sources within the organization or across the value chain. This data can come from sensors, machines, devices, databases or virtually any system that collects data.
Data integration: The next layer is about integrating and consolidating the collected data into a unified format or system. This stage ensures that data from different sources can be accessed, processed and analyzed.
Data analysis: You guessed it. This layer is about analyzing the integrated data to derive insights, trends, patterns and actionable information. Techniques such as statistical analysis, machine learning and artificial intelligence are a natural fit here.
Digitalization: This layer involves the transformation of business processes and operations using digital technologies and insights gained from data analysis. It includes automation, optimization and the use of digital tools to streamline workflows and improve efficiency.
Digital transformation: This last phase is the goal of the entire exercise and represents the strategic adoption of digital technologies to fundamentally change how a business operates, delivers value to customers and competes in the market. It may involve new business models, innovative products or services and a shift towards a more data-driven and agile organization.
This is a basic roadmap for organizations looking to evolve and harness the power of digital technologies, but nothing about this process is basic. Each one of these phases is made up of many complicated initiatives and no company can do this properly without good partners in the process.
What’s the difference between digitization and digitalization?
The terms “digitization” and “digitalization” are related but have distinct meanings in the context of technology and business transformation:
Digitization refers to the process of converting information or data from analog to digital form. It involves transforming physical or analog artifacts (such as documents, images, videos or processes) into digital formats that can be digested, stored, and transmitted electronically. Examples include scanning paper documents to create digital copies, converting analog audio or video recordings into digital formats or creating digital records of interactions between machines.
Digitalization is the broader process of integrating digital technologies into various aspects of business operations, processes and strategies to fundamentally change how they operate and deliver value to customers. It relies on digital technologies (like AI, IoT, cloud computing, data analytics) to improve efficiency, create new business models, enhance customer experiences and innovate within an organization. Some examples would be implementing IoT sensors to gather real-time data for predictive maintenance, using AI algorithms to automate decision-making processes, adopting cloud-based solutions for scalable operations or redesigning customer interactions through digital channels.
