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Industrial Supply

Digitization projects get stuck in the test phase

Projects to digitize the supply chain often fail to move beyond the test phase. Consultancy firm Capgemini believes that the reason is mostly a lack of company focus.

31 Dec. 2018
Digitization projects get stuck in the test phase (Chart: Capgemini Research Institute Analysis)

For its study , Capgemini questioned more than 1,000 businesses in the consumer goods, manufacturing and retail sectors about the state of digitization in their supply chains. Of these businesses, 86% had yet to scale up a single one of their (on average) 29 projects; most were still stuck in the idea, proof-of-concept or pilot phase. Capgemini attributes this to a “lack of focus”, with companies trying to “digitize everything at once” and so scattering their efforts. The consultants saw notable similarities between the few businesses that had successfully completed their initiatives: these had a clear process for evaluating the success of pilot projects, and clear guidelines for prioritizing projects.

The study showed that the successful companies had a high return on investment (ROI) and that their investments paid for themselves on average over just twelve months. An earlier study came to similar conclusions. As management consultancy Roland Berger determined in spring 2018 , supply chain digitization promises internal returns of 15 to 25% over a period of two to four years – if the projects get past the pilot phase, that is.