Digitalization: key to survival and the future of business

Anyone who has not understood that digitalization is part of survival. Will not be part of the business future of this country.

About the author: Jesús Montoliu

Jesús Montoliu is the CEO of SOLVE ADVISORS GROUP. After more than 30 years in different national and international companies he detected the need to not only do consulting for a company, but also to accompany it by the hand of experts in the improvement process. He is very clear that digitalization is essential for the present and future of companies.

• https://www.linkedin.com/in/jes%C3%BAsmontoli%C3%BA/

One of Solve ‘s essential premises is that digitization is essential. Why?

If you want to define the improvement plan you need to clearly identify where you are. I come from a very strong Japanese culture, as I spent many years living there and working in a Japanese company. If you don’t identify the real cause of the problems, it is impossible to draw your improvement roadmap. Digitalization allows you to clearly identify from objective parameters what are the key elements to detect the root of the problem. And do it quickly. The important thing is: I identify the root cause and act fast. I always tell customers that the perfect is the enemy of the best. The concept of continuous improvement is that if I can improve something, I do it. I look for improvement, not perfection. Digitalization allows you to improve today as much as you can. And if I am better today, tomorrow I can continue to improve and the day after tomorrow, too. Digitization allows you to get into this continuous improvement loop quickly.

Based on your experience, do you foresee a deadline beyond which it will be too late for the company that has not gone digital?

Whoever has not internalized it is dead. Beyond defining a period of time, the key is whether or not it has been internalized. Whoever has not understood that digitalization is part of survival will not be part of the business future of this country. Digitalization is part of the definition of the business model, it is a key element of survival.

Does this mean that the industry is already highly digitized, that everyone is clear about it?

No. People still think that digitalization is a fad, a sale, when it is a key parameter for survival. If I understand it only as a fad and that I have to integrate it, then I’m wrong.

I will explain a case that will help:

The other day I was with a CEO of an important company in the country and he was telling me that we had to identify what the Industry 4.0 of his company was. We had to define it. I asked him why. Because it will guide us. It will guide us … Why? Because it will be an attraction for our customers, it will be a selling point. So you are wrong. You have to understand that it is a means that you and all of us in the company will use as an element of improvement.

Digitalization is one more element. All the processes we have here, commercial, purchasing, machines, personnel, etc., are unstable elements by definition. And we have to make all the unstable processes as stable as possible in order to have a final output, which is customer satisfaction. Digitalization allows unstable inputs to give us the ability to parameterize and have the capacity to quickly take actions to stabilize these unstable elements.

If we are able, and here I am entering into teamwork, collaboration dynamics, empowerment and so on, to harmonize it, the output will make the client happy and will revert in a positive dynamic and circle.

It is neither a fad nor just another bandage.

If we are not able to generate a positive circle that integrates digitalization and you think that it is only a claim, a marketing element, it turns out that you have an empty element that in a while will go out of fashion and will go to the wastebasket. It will have lost all value. On the other hand, if you integrate it into the team dynamics where everyone has made it their own, it will be a circle that will never stop growing. Unfortunately, and I return to the initial question, in my experience few companies have understood digitalization as an element of ownership that is part of a whole that has as its ultimate goal the contribution of value to the customer. It is a tool for generating value for companies, whose output output is the generation of value through customer satisfaction. Few companies have understood this.

“With digitalization we are all part of the model, we all have the same information, we are aligned and we all have the ability to influence the customer. This gives us tremendous capacity.”

Even though we are in the midst of an economic crisis, it is not a question of money, but a change of mentality?

Absolutely. It’s a change in the mindset of organizations towards the customer.

Do you know of any other cases, without naming names, of companies that could take a step forward with digitalization, but come up against this mental brake?

Quite a few. I think you just defined two key elements. The first is the mental brake and the second is money. We try to link them and they don’t always go together. People put the barrier of I need a lot of money to digitize the company and it’s not true. Kapture.io is a fantastic example of talent and knowledge at the service of a product. This mental brake is usually put by ourselves, thinking that to digitize we need a lot of investment, that it is only for large multinationals, companies with large resources. That we are a medium-sized or even small company and we cannot afford it. First mistake. Then, if we are a company with a business model that does not allow us to apply digitization, since the level of manual labor is high. Second mistake.

Doesn’t size matter?

Exactly. It is not about size or processes at the level of automation, but simply about the ability to want to use the data to serve the output, which is customer satisfaction. If there is the will, then the capacity to digitize always exists and is infinite. If there is the intelligence to use it in the service of the customer, the capacity is also infinite. And if there is the intelligence to use it as a tool and not as an end to generate value within my chain, again the capacity is infinite; there is no measure, no volume and no business model. It is always possible to digitize. I have seen it in companies as small as 10 workers with an automation level of 15% and in companies of 50,000 workers with an automation level of 92%. I have seen it in companies of all sizes.

“Digitalization does not understand size or processes at the level of automation, but simply the ability one has to want to use data in the service of the output which is customer satisfaction.”

Initially, the automotive industry was the sector that bet the most on digitization, but which other sectors are already benefiting from digitization?

I come from the automotive industry, which is a very digitized sector, where we saw the need to do it to generate value, not because no one told us to. We needed improvements in a short time, to standardize unstable elements in a very short period of time. But I have also seen this in other very different sectors such as aeronautics, pharmaceuticals, food and drink, footwear, textiles and even hospitals. Very diverse sectors where an extraordinary capacity for improvement has been generated.

We are in the Covid-19 era and the hospital world is in the news every day. How has digitalization helped?

A 40% reduction in waiting lists and a 58% improvement in healthcare. These are realities, not fallacies, they are real figures.

And in the pharmaceutical world?

We have the case of a pharmaceutical company, whose digitalization will allow a significant operational efficiency improvement. Beyond the results, it is meaning a new way of managing and dealing with the reality of the plant. In real time I can know what is happening in the plant. I don’t make decisions the next day, but in a much shorter space of time, avoiding reprocessing. And you change people’s mentality!

Can I make a little time jump? Sure. Go ahead.

As I was saying, I come from the automotive world. When I was the director of the Barcelona plant, we were the first company to stop the line. The first to give the capacity, the Jidokato the operator to stop the line. Until then, only the director or the foreman did it. Suddenly, by pulling a string, the line was stopped, they did not produce. The message was very powerful: we give you the ability to stop the line. And why? Because quality is the most important thing. Until then the message was produce, produce, produce. We wanted to change it to quality, quality and quality. If we do things right, the logical consequence is that we will make the cars right. If we solve the problems at the source, the logical consequence is that the cars will come out well and we will make the planned production. The message is unequivocal, safety first and then quality.

If the process is not digitized, it is more difficult to detect what is wrong and stop if necessary.

Digitization allows us to give the order to stop because we have the data at all times. And because we have the data, we make the best decision based on the logic we have defined in terms of quality, cost, deadline or whatever business logic we want. Because I have data, I am able to prioritize the logic of my business model. I have data and I make decisions aligned with the model, which I share with the entire business structure, from the operator to the general manager: we are all part of the model, we all have the same information, we are all aligned and we all have the ability to influence the customer.

What is your experience with Kapture.io?

I am absolutely convinced: it is a good example of the talent, the knowledge, the expertise put into an operational program. When we went to the pharmaceutical company, I was certain that it would be a success, and the first steps are proving us right.

I come from the automotive world, which is complex, inbred, difficult, that changes a lot because you need a lot of data and precision. Kapture.io has done a fantastic job in Nissan, which has served as a showcase for other companies. When it entered the pharmaceutical industry, it was fantastic because it combines the three fundamental elements that the Japanese told me: talent, perseverance and exemplarity. The Japanese have a mentality called I do, we do, you do. I do it first, then we do it together, and then you do it. This has been key with the pharmaceutical company: I teach you, we do it together and then you do it. The sample by example.

Jesús Montoliu calls for companies to abandon the mental brake and get on board the digitalization boat. It is the only way to have a future with the current crisis. The digitization of data leads to an improvement in the production process, but also to a change in the company’s mentality, as it integrates all its elements.