What is digital transformation? It is a commonly and excessively used buzzword these days, but in reality, the transformation has been going on even before people started using the term. However, over the past several years, the pace at which businesses have been adopting technology to redefine how they win in the market has gone up exponentially. So, what exactly does digital transformation mean, especially in the industrial context?

I am Ashish Aneja, and I am part of the Energy and Natural Resources Practice at Oliver Wyman. I have spent more than two decades in the chemical industry working with clients and in corporate roles to drive significant change across organizations. My passion for the industry stemmed from seeing my father work for one of the largest chemical companies in the world. After completing my PhD in Chemical Engineering, I worked for several years in innovation and commercial roles leading up to when I led the digital transformation of a $3 billion products and services company. At Oliver Wyman, I advise clients on a wide range of strategic and commercially oriented topics.

When it comes to digital transformation, different people and corporations view the term differently but here is how I define it:

1. First, it is fundamentally a reimagination of how technology can be used to improve business performance.
2. Secondly, it involves the use of advanced technologies such as artificial intelligence, machine learning, the industrial internet of things or IIOT-enabled, advanced data analytics, blockchain, and many others to achieve these business improvements.
3. And, finally, digital transformation is not about incremental change, but it’s really a step improvement in how products and services are delivered to customers.

In some cases, our clients are using digital technology to achieve commercial success in areas such as generating leads and winning new business, scaling their business via eCommerce or by developing and monetizing new business models that are IIOT enabled. In others, our clients are digitizing their end-to-end supply chains for improved visibility so that smarter actions can be taken in the procurement, manufacturing, and transportation of products.

There is a plethora of examples as to how our clients are successfully leveraging digital technologies, but here are a couple that really stand out:

In one case we worked with a client to create a standard data layer that harmonized data coming from various systems, such as enterprise resources planning and customer relationship management systems. We then layered advanced analytics on top of the data that provided easy to understand visualizations that were then used to drive specific actions. These actions included helping sales teams with identifying sales opportunities and providing them guidance on how to price specific deals. Other analytics were tailored specifically for the leadership team and gave them improved visibility on business performance and help managing their business in areas such as inflation. Additional analytics developed included those that helped the company with supply chain topics such as demand planning, inventory optimization, and reducing product complexity.

In another example, we worked with a B2B services client that was supplying chemicals to a broad range of customers in various industries such as power plants, food and beverage, refining, and petrochemicals. The chemicals were applied to protect the customers' assets from corrosion, scaling, and fouling issues. The company realized that the assets that they were servicing for their customers were generating vast amounts of data that contained tremendous insights that could help reduce downtime, increase throughput from the assets, or extend their service life. We then went on this multi-year journey to install additional sensors, monitoring equipment, etc. on these assets, collected data on the cloud, and ran AI and ML analytics to realize the benefits. This resulted in our client having a differentiated offering, improving their value proposition to their customers, and, in some cases, explicitly monetizing the digital capabilities that they built.

The two examples I shared above may or may not apply to you. But what I will say is that I’m certain that your industry is being disrupted by digital technologies at this very moment. You may think that you are falling behind, but it still may not be too late as it is less about a digital "transformation" if you will, but more about a digital "journey".

I’m Ashish Aneja, and this is my take on digital transformation.

This transcript has been edited for clarity