People usually associate the concept of a digitalisation 'best practice' with state-of-the-art solutions and tech giants, like Amazon and Apple. However, this definition fails to acknowledge that not every company will benefit from attempting to implement advanced digital solutions straight away. For some companies such technologies may be too complex and resource-intensive to adopt immediately.
The vast majority of the businesses in Europe are SMEs. Data suggest that when it comes to digitalisation, many of them are only at the beginning of the journey. As a part of the Smart Industrial Remoting study, carried out by PPMI for the European Commission, we are striving to bring to light digitalisation practices that would be relevant for SMEs.
Our research shows that SMEs and non-digitalised companies can benefit from beginning their digitalisation with implementing basic technologies. Starting small can lead to 'quick wins', which help to obtain the skills and motivation needed for more complex digital initiatives in the future.
Therefore, in our study, we use a broader definition of ‘best practice’:
Best practice – a characteristic or behaviour that enables a company to digitalise successfully regardless of company size, digitalisation level or technology chosen.
Based on this definition, we explored more than 40 case studies of European companies of various digitalisation levels and size classes. Building on the experience of these businesses in adopting digital technologies, this article presents eight best practice principles for digitalisation.
Click the boxes below to find out more about each principle and how companies have applied it in practice.
You can also explore the principles and case studies in more depth in the Smart Industrial Remoting study Best Practices Collection report.
Depending on its attitude towards digitalisation, company management can act as gateways or gatekeepers to new technology adoption. Therefore, ensuring their buy-in is key in kick-starting and successfully implementing digitalisation initiatives. This is especially relevant for SMEs, where the top management and owners play a more central role in decision-making compared to large companies.
Certain managerial practices can accelerate digitalisation. Agility is crucial for leaders to respond to emerging challenges and calibrate plans accordingly. Managers who foster a culture of openness towards change and experimentation are more likely to lead successful digitalisation initiatives.
Our research shows that the following six attitudes and actions can help management accelerate digitalisation in their organisation.
Click below to see how Confetil, Landspeis and Dynamics Technology Hungary Kft implemented these attitudes and behaviours in practice.
Dynamics Technology Hungary Kft. is a subsidiary of an US-based group of companies that has been operating in Hungary since 2000. The company introduced a 3D scanner to automate its measurement processes. Initially, the management was unconvinced of the need for the new technology. To obtain the buy-in, the advocates of digitalisation encouraged the management to discuss the benefits of the chosen solution with other factories that had gone through a similar process.
A major customer asked Confetil, a Portuguese producer of circular knit garments, to begin using 3D computer-aided design software. The management not only reacted quickly by implementing the necessary technology, but also chose to invest significant resources in upskilling its employees to use the software successfully.
Landspe is is a mobile food shop chain founded by the agricultural business Naturfrucht GmbH. After COVID-19, the number of mobile food shops owned by the company fell from 10 to 3. The owner decided to adapt by strengthening the company’s online presence and introducing digital market solutions. His proactivity and awareness of technological developments in the retail and agriculture sectors helped to introduce changes at the company.
Lack of employee buy-in is one of the main reasons digital initiatives fail. Examples of why company staff might resist change associated with digitalisation include:
Limited awareness about technologies and how they will impact day-to-day work
Concern that some employees may be replaced with technology
Concern that technology may negatively impact employee emotional well-being
Therefore, it is important to combine digitalisation efforts with effective change management. This starts from defining a case for change. Company leadership must be able to explain why the adoption of a digital technology is necessary, what benefits it will bring and how success will be measured.
Then, management needs to consider the organisations’ readiness and implement an appropriate change management approach, which is characterised by six key elements.
However, companies, especially SMEs, tend to have a limited amount of time and resources that they can dedicate to change management. Therefore, it is important for companies to adapt the approach to their needs:
SMEs – usually characterised by the flexibility and proximity between management and employees – can use internal discussions to communicate the case for change, receive feedback and address concerns
Large companies or highly complex initiatives may benefit from more formalised change management programmes
To find out how two companies – Leviatan and Eckerle Automotive Bóly Kft– fostered employee buy-in in their organisations, click below.
LEVIATAN SRL is a Romanian SME operating in the construction sector that provides integrated architecture and civil engineering services. Running a needs identification session to map processes was eye-opening for the company’s employees. The session uncovered multiple inefficiencies in the company’s day-to-day operations and increased the team's motivation to improve the way they worked. Involving early adopters with a change mindset in process mapping, process change, and experimentation was important in facilitating buy-in.
‘It was important in our case that we had a group of champions or early adopters with a change mindset that were part of process mapping, process change and experimenting’
Cătălin Podaru, General Manager, Leviatan, Smart Industrial Remoting study workshop on digitalisation best practices
Eckerle Automotive Bóly Kft, a German-owned company from the Hungarian automotive sector, recently implemented a digital access control system and updated its ProAlpha solution. According to company representatives, neither management nor employees had absolute confidence that the planned implementation would enhance the efficiency of the business.
However, loss analysis conducted before implementation helped to demonstratethe potential benefits to management. Once the new technology was introduced, employees observed improvements in the company's data management efficiency.
Evidence shows that long-term strategic planning of digitalisation helps to ensure the successful adoption of new technologies. Strategic planning can help companies to:
Guide investment decisions and the prioritisation of digitalisation initiatives
Align digitalisation initiatives with business objectives
Foster internal buy-in
Persevere even if the benefits digitalisation are not obvious in the short-term
Long-term planning must be balanced against the need to remain flexible in the face of changing business realities. A study from 2020 argued that companies should abandon a linear process of strategy definition and execution in favour of iterative and continuous adjustment.
Strategic planning for digitalisation can be broken down into three main activities:
Technology trend monitoring
Analysis of gaps and needs
Setting of strategic objectives
For SMEs, each activity has specific challenges that require tailored strategies to address them.
To see examples of how three companies performed their needs and set strategic objectives for digitalisation, click below.
Novia Blanca is one of the biggest retailers of wedding jewellery in Poland. The company performed an audit of all its services and sales channels, as well as process mapping. Conclusions from this process guided the company’s choice in how to implement a new e-commerce platform.
Katty Fashion is a manufacturing company that produces women’s outerwear and specialises in short production runs and customised clothing. Adopting new technologies has helped the company realise its sustainability-related strategic objectives by switching from a traditional to a circular digitalised business model.
Before embarking on its digitalisation journey, the company performed a needs assessment to evaluate its activities, skills level and digitalisation gaps. This guided the definition of short, medium, and long-term strategies for digitalisation. To perform this assessment, Katty Fashion engaged external technical expertise as part of the DigitaliseSME initiative.
Find out more about the Katty Fashion case here.
LEVIATAN SRL is a Romanian SME operating in the construction sector that provides integrated architecture and civil engineering services. The company began its digitalisation journey by mapping its current and future processes. This step helped to secure employee and management buy-in for digitalisation by demonstrating existing gaps and inefficiencies.
LEVIATAN does not have an extensive digital strategy document. The company defines its objectives for digitalisation during planning meetings where the participants create a ‘mind map’ of objectives.
Sufficient digital know-how is one of the most important enablers of digitalisation. However, our previous research shows that many of the obstacles companies face when attempting to digitalise are skills related. SMEs are particularly vulnerable to skills and human resource shortages.
To secure the necessary skills, companies can choose from three options:
Existing in-house capabilities or hiring employees with the necessary competences
Upskilling and reskilling employees
Engaging external expertise
For SMEs, each option carries specific challenges that require tailored strategies to address them.
To see how two companies – De Trog from Belgium and Katty Fashion from Romania – addressed skills challenges, click below.
De Trog is a bio-label bakery that produces high-quality organic bread and uses several digital technologies, including robotic applications, big data and AR. The company used two approaches for address skills challenges:
External expertise through collaboration and knowledge exchange with the wider ecosystem
Staff training to improve employee skills and secure buy-in for the company’s strategic goals
Find out more about the De Trog case here.
Katty Fashion is a manufacturing company that produces women’s outerwear and specialises in short production runs and customised clothing. The company chose to develop in-house technical skills to assess, apply and compare new technologies to support its digitalisation process. The company also received support through the c-VoUCHER programme to train the team for the implementation of 2D CAD/CAM upgrades.
Find out more about the Katty Fashion case here.
Prior to any initiative, a company needs to secure the necessary financial and human resources. However, the costs and benefits of digital interventions can be difficult to quantify. Yet, doing so helps companies choose the best approach and plan the necessary actions.
To begin with, a company needs to explore digital solutions available on the market and compare their costs. Having chosen a solution, it needs to consider various types of costs, including upfront and recurring costs.
Our research suggests that SMEs often struggle to find the time and resources to perform these calculations. As a result, some companies decide to skip extensive financial planning. A common alternative is applying the ALARA principle – introducing solutions at a price ‘as low as reasonably achievable’. However, digitalisation can entail various hidden, irregular and long-term costs. Therefore, SMEs should exercise caution when deciding to skip calculations altogether.
To see how three retail, construction and agrifood companies ensured the feasibility of digitalisation solutions, click below.
This Croatian oyster farm adopted spectrometric technology and methodology for preventative oyster quality assessment on-site. Before implementing them, the company assessed its financial, technical and human resource possibilities. This was achieved by relying on external consultants to perform a technology audit. It helped the company to narrow down the scope of digitalisation to a technology that would be feasible to implement.
Find out more about the Croatian oyster farm case here.
Norteña de Aplicaciones y Obras provides specialised services in roof waterproofing. To maintain competitiveness and efficiency, it introduced several technologies for improving internal operations and customer relationships. Before beginning digitalisation, the company’s management assessed several funding options, including public support. In the end, it managed to digitalise successfully by ensuring internal capacity and relying on its own financial resources.
Find out more about the Norteña de Aplicaciones y Obras case here.
Henry Partners operates four e-commerce shops selling various products. While looking for a way to automate order processing and integrate changes across the e-commerce platforms, the company was guided by the ALARA principle. This approach was chosen due to budget constraints.
Companies usually do not digitalise for the sake of digitalising – they do it to achieve broader strategic objectives. Digitalisation often starts as an isolated ad hoc project. With time, digitalisation efforts become better managed, integrated and interconnected across the company. Whether digitalisation is small- or large-scale, it is crucial to align digitalisation plans with the company’s long-term needs.
SMEs rarely develop and follow detailed digitalisation plans. Instead, they leverage their flexibility to adopt digital technologies rapidly and on the go. But lack of planning can make smaller companies even more vulnerable to future challenges.
Strategic roadmapping helps SMEs deal with complex transformations and ensures transparency around activities, timelines, deliverables and resources. Strategic roadmapping can have several iterative stages that allow a business to continuously evaluate and recalibrate digitalisation plans.
In fact, research suggests that companies which allocate more resources to experimentation perform better than their peers. By testing a digital solution on a small scale first, businesses can assess how viable it is and whether recalibration is needed. For SMEs especially experiments can help detect problems or weaknesses at a low cost.
Click below to see examples of how three companies used an iterative approach to introduce new technologies.
MW.FEP provides tailor-made solutions in the electronics industry. The company aimed to introduce a software solution that would allow it to quickly integrate new products. To do so, the company management had to decide whether to change only a few aspects of its production process or overhaul it completely. In the end, the company decided to carry out a large-scale digital transformation of all its production lines.
The company opted for so-called ‘valor process preparation’, which allows engineers to prototype specific lines and switch easily to better-performing ones for mass production.
Find out more about the MW.FEP case here.
HATA, a young company knitting circular sustainable fabrics, decided to improve its quality management processes by introducing a computer vision-based solution for fabric inspection. It partnered with Smartex, a start-up using computer vision and AI for advanced textile solutions. The two companies collaborated to test and fine-tune the solution in an industrial setting. Eventually, they had a fully working product and both benefitted from the collaboration.
A 1,500 ha. blueberry farm in Lithuania is participating in a FlexiGroBots project. The goal of the project is to test the use of precision agriculture for different types of farms. Even though the project is still ongoing, the farm has already observed more precise monitoring of crops. One of the lessons learned in this case is that collaboration with academia, researchers and technology developers is essential to test and deploy digital innovations.
Find out more about the FlexiGroBots project here.
Companies do not operate in a vacuum. Leveraging cooperation with other players in their value chain and beyond can help smaller companies accelerate digitalisation. Moreover, research shows that external support and advice is what most SMEs lack. It can provide them with guidance on the available solutions and how to adopt them.
SMEs can seek different types of support from the ecosystem:
Technical support and expertise
Access to testing facilities
Matchmaking with technology providers and cooperation with them to develop and test technologies
Support for technology piloting
Skills development support
Funding and cost sharing
There is a large variety of actors that companies can cooperate with to boost digitalisation, from public sector organisations to other businesses in the value chain.
To find out how Protex Group and Fiber Network WUG took advantage of collaboration with the broader ecosystem, click below.
When Protex Group, a manufacturer of work clothing, decided to upgrade its existing product, it decided to do so by collaborating with other ecosystem players.
Together with an Estonian ICT Cluster, the smart electronics cluster ESTRONICS and the Tallinn University of Technology, the company developed a smart work suit for marine industry workers in extreme environments. The expertise and testbed facilities available through the cluster played a large role in ensuring the initiative’s success.
Find out more about the Protex Group case here.
Fiber Network WUG is an example of a cooperative formed to speed up broadband internet connections in a rural area. It found a way to provide high-speed internet by using to the pre-existing local heating network. When installing the heating network, the company performed a cost-benefit analysis and compared various implementation options. Eventually, they chose fibre optic lines, which allowed the town to obtain high-speed internet without having to dig deeper or outsource the work.
To be aligned with SMEs’ needs, solutions must be accessible, simple, unobtrusive and scalable. However, many technologies fail to meet these criteria. On the one hand, commercially available options can be over-engineered, complex, expensive to implement or lead to vendor lock-in. On the other hand, SMEs may lack the time, resources or competences to develop solutions internally.
However, companies in our study also found creative ways to lower the costs and complexity associated with digitalisation. Examples include:
Using non-industrial solutions: low-cost devices or software that have been developed for non-industrial applications, such as the consumer market
Using off-the-shelf or open-source technologies
Involving trainees, apprentices and students in the development of solutions
Sharing the costs of digital tools, infrastructure, maintenance with other companies
Making use of public support programmes for business digitalisation
‘Digitalisation on a shoestring’ as it is sometimes referred to can be an important first step towards digital transformation. These quick win projects decrease initial costs and human resource needs, increase stakeholder confidence and are less likely to disturb business operations. The experience gained then allows a business to implement larger digital initiatives or more advanced technologies in the future.
For examples of how companies in our study implemented ‘quick win’ initiatives, click below.
Lagermax is a logistics service provider active in several industries operating in Austria and Eastern Europe. To improve the efficiency of its spare parts cross-docking process, the company cooperated with the Digital Transfer Centre at Salzburg University to adopt augmented reality goggles.
Existing industrial solutions for augmented reality goggles on the market were ‘over-engineered’. In other words, they had several technical functionalities that the company did not need. They were also relatively expensive.
Therefore, the company decided to use an older model of AR goggles from the consumer market instead. These non-industrial goggles proved to be a good option: they were cheaper and easier to wear than the alternative.
Henry Partners operates four e-commerce shops selling various products. The company was looking to integrate all the retail platforms it uses (its own web shops, Allegro, eBay and Amazon) and drop-shipping providers.
The company decided that every tool used for integration should come from the commercial, off-the-shelf class. They also had to be sufficiently easy for the owner to configure and control. The company also hoped that this strategy would lead to less dependence on software development companies. In the end, the company selected Prestashop as its main system.
Van Den Borne Aardappelen is a family farm, consisting of roughly 550 hectares of land, devoted primarily to potato crops, maize, wheat and sugar beet. The company adopted precision farming technologies to improve the efficiency and quality of its crop yields.
To adopt such technologies, the company relied on two strategies. On the one hand, it has received public financial support from local, regional and national SME innovation and rural economic development programmes to help finance the farm’s digital transformation ambitions, as well as participating in a long list of publicly supported R&D and innovation projects, co-funded by the Dutch government and the agricultural industry. On the other hand, the company has also benefitted from collaboration with knowledge institutions and other companies.
Find out more about the Van Den Borne Aardappelen case here.
OVF Studio from the United Kingdom first explored commercial solutions for 3D body-scanning technologies (SizeSTream, Lectra Modaris). However, it concluded that these options would require approximately six months and three people to implement.
In the end, the company adopted an open source 2D pattern creation software application called Seamly2D. Choosing this option had three main benefits:
Lower cost of implementation, saving the company approximately GBP 7,000
A vibrant support community
It was easier to use compared with 3D alternatives
Fonte & Faria Confeções from Portugal introduced an off-the-shelf manufacturing execution system. The company selected this solution because it did not require a large upfront investment or complex changes in its existing IT infrastructure. While the chosen system is not state-of-the-art (data entry remains manual), it has reduced delays in data collection significantly. It also has the added benefits of being relatively cheap and easy to use via smartphones and tablets.
This article is a part of the study titled ‘Smart Industrial Remoting: remote working in non-digitalised industries’. The study is carried out by PPMI for the European Commission and sheds light on the digitalisation of five industries in five different European countries. For more information, see this page.
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