Project Management in Digital Transformation

2016 was the year in which “Industry 4.0” became concrete projects.

This was also the view of Gartner’s market researchers and analysts. In this case, a study stated: “Digitalization moves from an innovative trend to a core competency”. A statement that is still true.

Integral networking

Above all, the company boundaries between the supplier and the supplier and the customer are increasingly dissolving (see picture “Integral networking”).

Whereas in the past, company analysis focused on the analysis of core and auxiliary processes in the company, it is now necessary to re-examine what are the golden nuggets processes that extend beyond the company’s horizons.

Either way, a multitude of initiatives is required in all affected companies in order to implement the digital transformation. The goal is the conversion, further development and reorientation in order to fully exploit the possibilities of the new integral digitisation. Even though information technology is the driving force behind the digital transformation, navigation in customer-oriented areas is decisive for success. These specialist areas are the drivers and implementers of the digital transformation.

Digital demand vs. real implementation

At present, there is still a clear discrepancy between digital requirements and the real ability to implement them. The key question is: which concrete projects are necessary and how should these be planned and controlled?

This is where a short trip into the world of the semi-conductor industry pays off. This branch of industry has always been forced to react to innovations and thus to customer requirements on a daily basis. However, this would never have been possible with rigid production facilities. This is why flexible production has always been established in the semiconductor industry worldwide. Today we would call these methods “Scrum”, “Agile” and “Kanban”, because a symbiosis of these methods connects today a modern Semi Conductor factory. Not only the production methods and processes are continuously optimized, but also the technological processes. This is accompanied by simultaneous changes in consumer behaviour (i.e. customer requirements) on a quarterly basis.

And it is precisely these requirements that companies with industry standard 4.0 have to meet.

There is therefore no lack of attention from top management to such projects. There is also no lack of importance and the necessary budgets. Ultimately, the right process and project management is critical to success. But what are the concrete characteristics that distinguish these projects and what concrete recommendations are derived from them?

  • Project management does not need to be comprehensive. A concentration on the essential project management deliverables (scope, schedule, project status, risks, benefit planning) is sufficient. The key to success lies in agility, i.e. the proverbial flexibility of adaptability to rapidly changing procedures and processes.
  • The core of project planning is the definition of so-called waves, or release sequences, based on the question: When do we want to deliver what? The cycles between the waves must be deliberately kept short (1 – 3 months).
  • The contents of the waves are planned agilely and synchronised via milestones.
  • The planning of the agile implementation stages, together with the controllability of dependencies (between several projects of the digital transformation) and the analysis of alternative scenarios, require a superimposed classical project control.
  • Above this there is a scope management to ensure that changes in the scope (which results should the project deliver in which phase?) are recognized early, controlled accordingly and mapped in the project planning. Changes in the business case or business model are decisive for scope changes.
  • The focus is always on speed and delivering the results – fast results count, iterations and extensions come later.
  • The customer must be involved in this form of project planning? Fixed times for rapid prototyping, customer presentations and feedback loops form the framework for this.
  • The optimization of such highly complex and dynamic processes requires the “just in time” recording of the business ratios, with selected early indicators for a preventive, sensory control of this process.
  • Suppliers and external partners (software suppliers, consulting partners, other service providers) must be integrated into the project planning. If necessary, subplans and subprocesses of the suppliers are automatically integrated into the overall planning.
  • The plan also includes the early inclusion of the go-live scenario (what happens after the end of the project?). Because not only the business processes will change, but also the established regulations. In doing so, it should be clarified when the planned setup of and transfer to new organizational structures will take place, when the trainings have to start and what “operation in the new line” will look like?
  • Governance and control of the program is business-oriented and no longer organization-focused: Control is determined by the units or persons who are ultimately responsible for the planned benefits (i.e. benefits such as increased revenues, increased customer loyalty, brand loyalty, etc.).
  • If the project planning is outsourced, the separation of management and delivery must be strictly observed: The overall project planning and control should under no circumstances be transferred to the supplier or the software manufacturer, but must be carried out by a neutral, independent third party.

And what is the quintessence of this experience?

With all the dynamics of digital transformation – consistent project planning and project control are the key to success.