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I recently listened to nice presentation from IDC about digitization in the manufacturing industries. One topic, which I found quite interesting, was the digital maturity ladder for manufacturing companies.

The digital maturity ladder was described in 5 Levels:

  1. Ad-Hoc -> Digital Resistor
  2. Opportunistic -> Digital Explorer
  3. Repeatable -> Digital Player
  4. Managed –> Digital Transformer
  5. Optimized -> Digital Disrupter

In the context of the digital transformation, companies will change their business models and ecosystems by utilizing digital capabilities, and leveraging new technologies to enable horizontal and vertical business process integration to provide a new or even a better value proposition for their customers in the Industrial Machinery & Component industry.

The value proposition during the digital transformation could be adapted in the following areas for Industrial Machinery & Component companies:

1) Aftermarket Service

  • Increase overall equipment efficiency and reducing unexpected down times by constantly monitoring the equipment, identifying value patterns, and predicting potential issues.
  • Predict service part usage to reduce high-cost shipments like air freight and replace with standard shipping to ensure spare parts availability.
  • Increase field service technician efficiency by providing actual information about the next service order, installed base equipment records, and how the service job needs to be executed.

2) Building a Digital Business Model

  • Coordinating the network using actionable  data can help generate new business models in the future.
  • Providing intelligent data to other industries could also be sources of new revenue streams and competitive differentiation.
  • Building an open platform that allows all network stakeholders to easily consume  data, and new applications.

Based on my experiences, I think the digital transformation of Industrial Machinery & Components companies has already started and will reach an even greater momentum in the near future.

The question that companies in Industrial Machinery & Components industry should answer, is on which level of the digital maturity ladder they should operate in order to withstand the competition and build a sustainable business model in the digital age?

Looking forward to fruitful discussion on this topic.

Patrick Lamm is a Director of Industrial Machinery & Components in the Industrial Machinery & Components Industry Business Unit at SAP. Before Joining SAP, Patrick held various positions at Hewlett-Packard as business analyst in strategic supply chain planning and as business process and SAP engineer in multiple divisions going back to 1998. Starting at SAP in 2004, Patrick held the position of Senior Business Consultant focusing on strategic projects in supply chain management and IT Strateggy. Since 2008, Patrick is part of SAP's Industry Solution Management organization for Discrete Industries supporting partners and customers leveraging SAP solutions.

Patrick holds a master in industrial engineering from the University of Applied Science in Offenburg, Germany and a master of science in business administration in management information systems from the University of Cardiff, Wales.