On this episode of Heads in the Cloud, 4IR Solutions CEO James Burnand and CTO Joseph Dolivo cover common Industry 4.0 and Digital Transformation pitfalls and how to overcome them.

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James Burnand:

Hi everybody, welcome to this week's Heads in the Cloud podcast. Today, our topic is Industry 4.0 & Digital Transformation Pitfalls. Hey Joe, happy new year.

Joseph Dolivo:

Happy new year, James. This is our first podcast of the New Year. So, how are your holidays?

James Burnand:

You know what, can't complain. Looking forward to 2023, exciting times ahead, so I'm pretty excited. You?

Joseph Dolivo:

Sure. Back from the deep freeze that we had in Chicago. I'm very happy to be back in California, as is Gerald over here. So, he's enjoying the nice weather again. Tried to fit him on a plane, but they were going to charge me the oversized fee, so he just had to watch us take off. Yeah, but we've got a lot of exciting things happening and I'm excited to talk about today's topic as well, which is... What is it?

James Burnand:

Something I already said, but Industry 4.0 & Digital Transformation Pitfalls.

Joseph Dolivo:

That's right. Awesome.

James Burnand:

We didn't rehearse this everybody. This is all live. So, I thought I'd maybe start off before we get into the topic, there was a couple things I wanted to cover off. First of all, I don't normally wear a hat to these podcasts, but I did want to call out the performance of my football team, the Detroit Lions this year. I do apologize for anybody in Green Bay. It was a sad end of the season for you, but certainly, I was pretty proud of how my team turned around.

So, if you're a Green Bay fan, all cheese heads. I still love you and I apologize for what happened there at the end of the season. I also thought it might be prudent to take a little page out of Jeff Napper's book and the integrated live crew and do a dad joke. So, I found one I really liked here. So, when I was a kid, my dad got fired from his job as a road worker for theft. I refused to believe that he could do such a thing, but when I got home, all the signs were there.

Joseph Dolivo:

Bravo. Dad to dad. I don't know if that'll come through in the recording, but that's good. I like it.

James Burnand:

All right. So, maybe we should switch over to the topic at hand. So, Industry 4.0 & Digital Transformation Pitfalls.

Joseph Dolivo:

Yeah. Rambling on here, I think that this is something that folks talk about all the time. We heard about it since the pandemic and even before, but digital transformation and what that means, and it's certainly a buzzword. And as is the case with a lot of buzzwords, people will sometimes just start doing something because they have a mandate from on high without really knowing what it is that they're doing. And it's the same thing we've been saying for a decade with MES projects, when you just go and do something, or you just try to adopt a technology for the sake of adopting it. There are all sorts of pitfalls that can go wrong. So, I'm sure it's something you've seen as well from talking with customers and others in the industry in your career, James, too.

James Burnand:

Yeah. I mean, we talk about people, process, and technology and the union of all three being necessity for MES or digital transformation projects or industry 4.0 projects. I mean, in some ways they're interchangeable because they all are really focused on digitalization of processes that were typically manual or things that were challenging and non-integrated together. So, all of them are kind of the same thing and to your point, Joe, what I think I've seen be the most prominent failure is folks who focused on the technology, this is the latest whiz-bang thing we need to do. And I'll say force or push to move forward with the technology without getting the buy-in from the other stakeholders in the organization or despite the other stakeholders in the organ organization. We've done things in the past that I've seen where we're trying to put things in to hide them from other parts of the organization. This is where that concept of shadow IT came from.

So, unfortunately, really the right way to do this is the concept of a center of excellence is having multidisciplinary teams that are all focused on driving whatever value drivers are the most important for your organization, and then making intelligent choices on technology and people and the processes that need to be in place for that to be successful. You can't really do it any other way, unfortunately.

Joseph Dolivo:

For sure. And I think my favorite story that I like to tell about this was going back a few years where we put together a proposal for doing a digital transformation project, including an MES system. Put together ROI justification and all these great things, installed the software, and a couple weeks later the customer came to us and said, "Well, where is my ROI?" And we said, "Well, what are the continuous improvement practices you put into place? How have you transformed your organization around the data coming out of this?" And we got kind of a blank stare there.

So, installing software for the sake of installing software can only get you so far. It's really about the business transformation that has to be put into place to really enact any value, extract any value from what it is that you're putting in.

James Burnand:

It is interesting too, that there's been a bit of a genesis in some of the suppliers in this space too, where not only are they coming in and putting in a system to do data collection or reporting, but they're also weaving that in with coaching for the clients on continuous improvement on how to go about actually implementing and taking those changes and turn them into that value. I think one of the challenges that you see is it's very uneven at the clients that we've worked with in terms of the maturity level and the capability of the resources that they have to actually put into action the things that could save them the money or could make them more efficient or could produce more parts, that's not always something that they're capable of, but in some cases they're capable of running capital projects and putting in lots of whiz-bang tools, but the whiz-bang tools are largely under or unutilized after their installation.

Joseph Dolivo:

Totally. Well, I can't tell you, especially recently, we've seen a lot of these very grand architecture diagrams that have every broker SCADA, MES package under the sun together. And, again, you're now creating a lot of complexity where a lot of times, especially for starting out, you'd be much better off starting with something simple and growing to a complex architecture instead of trying to design for every possible use case under the sun, throwing a bunch of names out there without any expertise to deliver on that and without any clear value attached to why you'd be integrating these. And it just ends up creating a lot of complexity, and the other sort of related thing to this is when you try to aim too big, you're doomed to fail.

And we have a lot of these projects fail because they don't get the sponsorship. That's number one. Number two is they try to bite off more than they can chew, and they end up failing and then nothing ends up happening. So, our of course, antidote to that is to start small. Start with something that you can get clear business justification for. You can measure value for really quickly, and you can define what success is going to be and make sure that it's something that's manageable, that you can bite off. And then, you can use that as a proof point to work your way up the organization to get funding for additional pieces that you can build on top of that. But don't bite off more than you can chew and don't adopt technologies just because they sound cool like Kubernetes, James.

James Burnand:

Well, I was actually going to say, I think I disagree with you on that, Joe, and then... This doesn't happen very often on our podcast, but I actually think the concept of building out your future state, laying out even if it's not right, even if it's only 50% or 60% right. But having some concept of how all of these different potential things you might do in the future might fit together. I actually think that's a pretty valuable exercise.

I do completely agree with you that starting small demonstrating value and eating the elephant one bite at a time makes absolute perfect sense for how to run these things forward. But I think that visioning part of it, that art of what's possible discussion and architecting. I think there's value in that. It shouldn't be a huge time-consuming exercise because no matter what you put down on paper, it will be wrong by the time you go to actually do it. But yeah, I do think there's value in that and two, to talk about your comment about the Kubernetes, because Joe and I have a running gag around this because I like using that word because it's got a lot of letters.

Joseph Dolivo:

It is a cool word.

James Burnand:

Yeah. I mean, when you actually look at what it can do for you in terms of automation and in terms of streamlining the way you deploy and manage those workloads. It's a tremendous tool, but it is very new for a lot of people and really helping people to understand why you would even care has become a lot of the discussions that we get into with people that just have never even heard of it or if they've heard of it, the practical usage of it is not something that's in their head. Now, obviously, we try to encapsulate the users from that with what we do, but that's just part of our shtick, I guess.

Joseph Dolivo:

Well, I'll also mention too, that I think for a lot of customers who might be starting out in this space that we're in, we wouldn't encourage them to go directly to a Kubernetes, for example. So, we didn't even adopt it out of the box. It's when we were growing to a stage where we would start to get value from that technology. Then there's a complexity trade off, so you're exchanging, I have to now understand a more complex system, but I'm getting a lot more out of it. And that's these decisions that we make all the time. A trade-off, are we going to absorb that complexity and develop skillsets and capabilities around managing that, in exchange for all these great things that we get out of that? And in our case, that's what we did.

To put an exclamation point on the previous disagreements, I wanted to emphasize that. Where I see that being a challenge is when you're making those decisions around technologies. So, you want to do your visioning around functions, around business capabilities and things like that. When you're starting to lay in technologies and vendor names in there before you've done proper evaluations and you've even done a proof of concept to see if you could even be successful with that technology. That's where we've seen companies, I've seen companies fall into a problem state. So, I don't think we're disagreeing as much as you might like to think, unfortunately.

James Burnand:

Well, and if I go back to my past and some of the companies that I've worked with and some of the vendors that I've worked with, sometimes when those visioning exercises are assisted by a vendor. It's all boxes of product names. We will create your vision as long as it fits the products that we have on the shelf today and put all of those products in there to maximize our license sale. I mean, I find that incredibly frustrating. I'm sure end users probably do as well because it really continues to perpetuate that vendor lock-in piece rather than looking at the functions and business value. To your point is, how do I maximize the number of SKUs that I can sell this customer? Because we as an organization sell these boxes of software and we need to try to make sure our customers use every single one of those, whether or not they need it or not.

Joseph Dolivo:

Yep. Spot on. Nothing to add there. Awesome. That's the main pitfalls that I can think of. I don't know if you had anything else that comes to mind.

James Burnand:

Yeah, I mean honestly, that truly is, so the way this works for us is we have a topic chosen for us as a part of this. So, we get a little bit of a surprise a couple of days before, and I did my notes, it sounds like Joe did his and they look pretty similar. So, yeah, I don't know that I have anything else to add because it is truly not the technology that ends up being the pitfall most of the time. It is everything else surrounding it, organizationally and from a support and from a management perspective, that causes most of the problems. I mean, you can still screw up the technology, but that's usually not what we see.

Joseph Dolivo:

Yep, agreed. Very well said.

James Burnand:

All right, well, and if there's no other commentary on this, certainly we'd love to hear from anybody that's listening to this, maybe not the Green Bay fans. You guys may not love me so much with my hat, but we'd love to hear your opinions if you agree with us. If you disagree with us, we're happy to debate. So, I hope everyone has a fantastic 2023.

Joseph Dolivo:

Thanks, everybody.

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Video: https://www.youtube.com/watch?v=-gyENbvvFfc&t=12s

Audio Podcast: https://spotifyanchor-web.app.link/e/gzLK3xcPMsb

Blog: https://www.4ir.cloud/blog

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