The DX Journey in the Enterprise and its
Leadership
20211118

Author:Bassam Zarkout
Founder, IGnPower
Chair, IIC Digital Transformation Working Groupbzarkout@ignpower.com

CONTENTS
1 Executive Summary ........................................................................................................... 3
2 Digital Transformation ...................................................................................................... 4
2.1
2.2

DX in the Enterprise ............................................................................................................. 5
DX Journey .......................................................................................................................... 6

3 Digital Transformation Program ........................................................................................ 8
3.1
3.2
3.3
3.4
3.5

Before you start .................................................................................................................. 9
Risks to the DX Journey ..................................................................................................... 10Enterprise IIoT Systems and DX Journeys............................................................................ 11
DX Program Structure ........................................................................................................ 12
DX Program Leadership ..................................................................................................... 14

4 Examples of Digital Transformation ................................................................................. 15
4.1
4.2
4.3
4.4

Digital Twins for Pressure Vessels in Oil and Gas................................................................. 15
Steel Manufacturing Quality Inspection ............................................................................. 16
Nike .................................................................................................................................. 17
Domino’s........................................................................................................................... 17

5 Conclusion ...................................................................................................................... 18
6 Acknowledgements......................................................................................................... 18

FIGURES
Figure 2-1: Different scopes for Digital Transformation. Source: IGnPower. ............................................... 5
Figure 2-2: The Digital Transformation Journey. Source: IIC. ........................................................................ 7
Figure 3-1: The Digital Transformation Program. Source: IGnPower. .........................................................14

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The DX Journey in the Enterprise and its Leadership

1 EXECUTIVE SUMMARY
This article provides an overview of Digital Transformation (DX) and focuses on thetransformation of environments that comprise Industry IoT systems or IIoT.
In many organizations, the DX initiatives are targeted at specific processes, example productionlines. Some organizations take a more strategic view of DX with the primary aim of transforming
the organization’s business model, value proposition (and ROI) and the way it delivers value tothe market, potentially leading to the disruption of existing markets, the leapfrogging ofcompetition, and the creation of new markets and fresh revenue opportunities. This article isfocused on these types of organizations (strategic view of DX) and highlights the considerations
and challenges that must be addressed during their DX journey.
By its very nature, DX at the enterprise touches multiple facets and areas1 in the organization.
For such efforts to be successful, the different stakeholders must be aligned with the overall
objectives of the DX strategy and must be committed and involved to its execution. This can bequite challenging in organizations that have enterprise scale IIoT systems with all the complex ITOT technical and organizational considerations that come with such systems.
DX at the enterprise also tends to span and spawn multiple projects that must be carried-out
over prolonged periods of time. Such DX efforts should be broken down into manageable phasesthat are aimed at transforming individual processes. These processes must be carefully selectedbased on their proximity to profits, and their ability to rapidly generate measurable outcomes,
and where the transformation efforts can yield valuable insight about the challenges and issues
involved in the overall transformation effort.
To achieve all this, organizations should look at DX at the enterprise as a journey. This journeymust be driven by a sustained program (section 3) which is sponsored at the highest levels in theorganization. Like all enterprise programs, the DX program must feature a well-defined mandate,a clear mission statement, an operational structure, a communication strategy, and a governancestructure. The program must also be led by a “DX Tsar” who is mandated and empowered by an
executive sponsor to execute it and deliver on its objectives. Finally, the DX program team must
represent the stakeholders involved in the DX effort.
Before embarking on a DX journey, organizations should explore important questions, theanswers to which will greatly impact the DX vision, mission, and objectives, for example what are
the main challenges facing the organization, what changes are needed to address them, can thesechanges be limited to specific processes or should they be more encompassing touching the whole1

Business model, functional, operational, and organizational.

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The DX Journey in the Enterprise and its Leadershipenterprise, which technologies should be considered, and what does success look like? Section 3.1
features a more comprehensive list of these questions.
DX at the enterprise is not a Business-as-Usual project. For many organizations, DX is a do-or-die
proposition that must be taken seriously and embraced at the highest levels.

2 DIGITAL TRANSFORMATION
Digital Transformation is a high-level catch-all term that refers to efforts by organizations toleverage digital technologies in order to optimize and transform the way they operate and deliver
value to their customers and shareholders. DX is not a new topic. Early efforts in the 70s totransition from paper-based financial systems to IT-based financial systems would be called today
Digital Transformation.
The DX trend remains strong in the market and has taken on heightened importance during the
COVID-19 pandemic2. Many enterprises in many types of industries are leveraging emerging andemergent technologies to transform themselves into digital enterprises with the aim of delivering
better value to their markets, more effectively, more competitively, and with better ROI.
What is new and different is that the transformation is increasingly taking place in environmentsthat comprise IIoT solutions which, by definition, span the digital-physical divide. This introduces
new considerations and complexities for enterprises at multiple levels, business, technological,
organizational, cultural, and risk related.
In the Digital Transformation in Industry whitepaper3, the Industry IoT Consortium (IIC) defined
DX as the innovative and principled application of digital technologies, and the strategic
realignment of the organization’s resources for the purpose of creating better outcomes, in termsof improving existing business and industrial models and processes, and in many cases, creating
entirely new ones.
Thomas Siebel (the father of CRM) summed it up nicely in his book Digital Transformation, Survive
and Strive in an Era of Mass Extinction, where he said that DX is essentially a caterpillar-tobutterfly transformation and a do-or-die proposition. He, like many others, used the NetflixBlockbuster story to illustrate this notion.

ExampleIn the 90s, Blockbuster had a successful brick-and-mortar business model based onrenting entertainment content to consumers using video tapes and DVDs.
Blockbuster did not grasp the seriousness of the threat that emerging and disruptive
technologies (e.g. cloud and high communication bandwidth) were posing to theirbusiness model. Upstart Netflix used these technologies and redefined the way

2

https://www.cio.com/article/3211428/what-is-digital-transformation-a-necessarydisruption.html
3
Refer to the IIC Digital Transformation in Industry whitepaper

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The DX Journey in the Enterprise and its Leadership
digital content is delivered to consumers using a competitively priced, all-you-caneat, and convenient to use online model. Customers flocked to Netflix “en masse”,
costing Blockbuster their business in few short years, and leading them to file forbankruptcy protection in 2010. AI-based recommendation engines came later andturbocharged Netflix’ business model even further.
As mentioned earlier, what is new DX in Industry is that the transformation encompasses physicaland digital environments.

2.1

DX IN THE ENTERPRISE

Figure 2-1 illustrates the notion that Digital Transformation is not a one-size-fits-all proposition.
The transformation may be targeted at a specific process, example a factory production line, forthe purpose of improving the effectiveness of this process, its efficiency, and ROI. Here, the term
process is used generically to refer to a collection of related and structured activities that produce
an output of value (service or product). Alternatively, the transformation may strategically target
the enterprise which can impact the whole enterprise including its business, operational, andservice models, as well as its overall value proposition.

Figure 2-1: Different scopes for Digital Transformation. Source: IGnPower.

We should note that the term “Digital Transformation” can refer to a wide spectrum of initiatives
and activities4. Some organizations use the term to actually and literally mean digital

4

https://www.forbes.com/sites/jasonbloomberg/2018/04/29/digitization-digitalization-anddigital-transformation-confuse-them-at-your-peril/?sh=4ee9c9322f2c

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The DX Journey in the Enterprise and its Leadershiptransformation. Others use it more broadly to refer to a mix digitization, digitalization, or digitaltransformation. These three terms overlap of course, but they are not identical.
•••

Digitization consists of converting analog5 data into digital form in order to ease theconsumption of this data within processes and improve operation,
Digitalization uses the above and consists of optimizing and in certain cases reengineering these processes and integrating them, producing process efficiencies,
Digital transformation builds on the above even further in order to create new models
for business, operation and service, uncovering new revenue opportunities.

Figure 2-1 also indicates that the impact of digitization and digitalization is most often internal
to the organization, example cost reduction, better process efficiencies, faster execution, etc.
Occasionally, the impact may be customer facing with external impact, example improving
customer experience. On the other hand, the impact of digital transformation tends to be more
external and market facing, example create new market opportunities, generate new revenues,
leapfrog the competition, etc. This affects the enterprise value propositions and efficiency.
Based on the above, it is clear that organizations contemplating starting strategic DX initiatives
should first establish clarity about the outcomes they seek, and the nature of thetransformation(s) needed to achieve them. They should also implement process-centric tacticaltransformation projects and use the knowledge and insight they gain from these projects torefine and further develop their enterprise-scale transformation strategies.

2.2

DX JOURNEY

DX at the enterprise level (the focus of this article) starts with a business strategy and gradually
evolves into a journey that takes the organization from the fundamental challenges and threats
to the better and transformative outcomes, to the actual transformation of the organization andits business model and value proposition.

5

Information in non-digital form, example paper-based information (documents, drawings, etc.)

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The DX Journey in the Enterprise and its Leadership

Figure 2-2: The Digital Transformation Journey. Source: IIC.

Figure 2-2 illustrates the DX journey along with the business, technological and trustworthinessfactors that underpin it. This article provides a highlight about the various aspects of the DX
journey. Please refer to current6 and future7 publications from the IIC for further details.
Mounting Challenges and Drivers: The motivations for deploying transformative solutions arediverse, but they share a need to do business in new and better ways. Market pressures such asincreased competition can, if not addressed, lead to loss of market share. Regulatory pressures
can also be drivers for transformation (the COVID-19 crisis is already increasing these pressures).
Innovative technologies may enable (and compel) organizations to transform their businesses inways that would have not been possible before.
Forces that may prompt enterprises to transform their business may also be indirect, for example
an aging population may force a healthcare insurance provider to rethink how their services areprovided to older clients.
Better Outcomes: The desired outcomes may take a wide range of forms. This includes new andinnovative business models that offer substantially changed services to end users. This is often
associated with new ways of charging for services. For example, a vendor of hardware assets
offering those same assets as a service.
The outcomes can be new partnership models or new operational models, for example, an airline
may change the way it buys spare parts to provide additional transparency of stock levels
6
7

Refer to the IIC Digital Transformation in Industry whitepaper
Digital Transformation Framework currently under development by the IIC DX Working GroupIIC Journal of Innovation

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The DX Journey in the Enterprise and its Leadership
throughout the supply chain and increase efficiency. Finally, the outcomes can be changes to thecustomer experience to provide new and monetizable service revenues.
Business Factors: The transformation may not be limited to the application of innovativetechnology (or even require it). Organizational and process changes may be needed, such as thecreation of innovative business and monetization models, the determination of the investment
levels and ROI, the implementation of innovative processes that address the complexities andchallenges of the IT and OT convergence8, the establishment of a DX Program that has a clear
mission, a governance structure with engaged stakeholders 9. The DX program must also have an
executive sponsor who defines the vision, and mandates and empowers the DX effort.
Technology Factors: The innovative application of emerging technologies (and some wellestablished) is one of the key factors that enable digital transformation. Figure 2-2 shows asampling of these technologies, for example Digital Twins, AI and Analytics, Hyper-connectivity(including 5G), Distributed Ledgers, Edge Computing, etc. This list is not complete, andconsidering the unrelenting advances technology, it is certainly not final.
The transformation may also involve the application of more than one technology. The Steel
Manufacturing Testing as-a-Service solution example provided in section 3 uses technologies
such as AI/Analytics and Edge/Cloud.
Trustworthiness Factors: This is the degree of confidence that the system will perform as
expected with characteristics including safety, security, privacy, reliability, and resilience in theface of internal and external threats and disturbances. Systems must remain compliant withrequirements10 throughout the DX journey. “Acting badly” can lead to loss of human life andequipment destruction. It can also raise the risks for the DX journey itself, significantly.

3 DIGITAL TRANSFORMATION PROGRAM
DX at the enterprise level is an endeavor that requires sustained and phased efforts which may
span multiple projects, themselves requiring alignment and coordination. This is best achieved
within the context of a DX program, which just like any other program, must include a number ofimportant elements:•••

Senior executive sponsor: defines the vision and the strategy, empowers and mandates a
DX leader and team to define the mission statement and execute it,
Program governance structure: mission, tracking reporting, communicating, etc.
Program team: must be cross-functional due to the nature of DX at the enterprise, and8

Refer to the IIC BizOps for Digital Transformation in Industries whitepaper by Dr. Chaisung Lim
Refer to definition in the ISO/IEC/IEEE 42010:2011 standard
10
Refer to IIC’s IIoT Trustworthiness Framework Foundations: regulatory, legal, industry bestpractices, etc., example OSHA 29 CFR 1910, IEC 61508, EU GDPR, GDPR, CCPA, etc.
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Program leader (DX Tsar) to drive and steer the program execution

Before an organization can embark on a DX initiative, it must assess the nature and scale of thechallenges it is facing and find the optimal way forward. The organization must also understandthat DX is not about technology11. Furthermore, the organization keep a balance between having
a bold vision and maintaining a pragmatic and realistic perspective about its ability to execute it,with consideration of the resources, expertise and time available.

3.1

BEFORE YOU START

When starting a DX journey, organizations should go through a reflection period and deliberate
on a number of important DX-related questions and analyze their impact on business, value
proposition, operation, and bottom-line, for example:
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•

How will the markets that the organization is servicing look like in 5 years? and what isneeded to succeed in these new markets?
What are the main challenges and pain points facing the organization? disruptive
technologies, growing competition, pressure to adopt new business models, etc.?
What are the “better outcomes” that can best address the challenges?
What changes are needed to address these challenges? Are these changes needed at theenterprise level (i.e. strategic) or are they focused on particular processes (business unit,
production line, etc.)?
Who will sponsor and drive the DX initiative at the executive level? a CxO level person?
What is the level of investment and how will the transformation affect the ROI?
What is the definition of success? can it be measured? What are the KPIs?12
What are the execution priorities? organization, process, supply chains, etc.
What is the timeframe for starting DX efforts and what are the milestones along the way?
Which transformation-enabling technologies should be considered?
Besides technology, what other changes are needed for the organization structure andhuman resources? expertise, structure, re-skilling, etc.
Which business processes need to be changed to best capitalize on DX and its underlying
changes?
How has the pandemic impacted the urgency of transitioning to digital? 13
What risks and friction points are likely to be encountered during the DX journey? see theRisk Management sub-section
What is the cost of inaction or late action?
Who are the stakeholders in the DX journey? their perspectives, roles, win positions

11

https://hbr.org/2019/03/digital-transformation-is-not-about-technology
https://www.forbes.com/sites/forbestechcouncil/2020/06/25/14-important-kpis-to-help-youtrack-your-digital-transformation/?sh=187542f99342
13
https://tecknoworks.com/digital-transformation-risks-and-mistakes/
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3.2

Will the DX initiative be business-led or IT-led?

RISKS TO THE DX JOURNEY

The subject of risk (and risk management) during the DX journey is well covered in the market by
the likes of industry analysts and major consulting firms. In its paper titled “Managing Risk in
Digital Transformation” 14, Deloitte suggests that “the building blocks of the digital risk strategy
is crucial to its success. An immediate step by organizations is to have robust measures aroundcybersecurity. The questions which need to be addressed are, ‘Is this enough? Is cybersecurity
the only risk to a digitally enabled organization?’” Deloitte then tells us that it is critical toconsider risk areas beyond traditional risk. Deloitte then describes a “Digital Risk Framework”
that covers a wide range of areas, including technology, cyber, strategic, operations, dataleakage, third-party, privacy, forensics, regulatory, and resilience.
In its article “Mitigating the hidden risks of digital transformation” 15, CIO Magazine states that“Companies are looking to grab any technology-driven advantage they can as they adapt to new
ways of working, managing employees, and serving customers. They are making bigger moves
toward the cloud, e-commerce, digital supply chains, AI, data analytics, and other areas that candeliver efficiency and innovation. Enterprises are also trying to manage risk — and the same
digital initiatives that create new opportunities can also lead to risks such as security breaches,regulatory compliance failures, and other setbacks. The result is an ongoing conflict between theneed to innovate and the need to mitigate risk. New, cross-discipline risk management
techniques are necessary to securely reap the benefits of transformative technologies.”
When IIoT systems are implicated in DX effort, the risks to the journey and the organization itself
are made more complex due to the digital-physical divide in these systems and the significant
differences that exist between the IT and OT worlds in terms of technology, culture,organizations, and best practices.
The table below provides highlights about some of these risks:
Risks
Technical16

Description
Unwise choices may lead to serious functional, architectural, and operational
issues. This is particularly significant with brown-field OT systems where it may bechallenging to integrate them and align them the overall DX objectives.

14

https://www2.deloitte.com/content/dam/Deloitte/in/Documents/risk/in-ra-managing-risk-indigital-transformation-1-noexp.pdf
15
https://www.cio.com/article/3609831/mitigating-the-hidden-risks-of-digitaltransformation.html
16
Refer to the IIC Industrial Internet Reference Architecture

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Risks

Organizational

Description
The cross-functional nature of DX, especially the IT-OT divide can lead to friction
and lack of alignment between the perspectives and goals of stakeholders. This canresult in a lack of commitment and “herding cats” challenges. The organizationalrisks may be also related to a shortage in staff expertise needed for the digitallytransformed systems.

Financial

For digitally transformed environments that comprise IIoT systems, there may be alack of clarity about the ROI or insufficient visibility about the value that DX can
now deliver to the organization. This can lead to under-funding or over-funding
situations, both unwelcome.

Trustworthiness17

Insufficient trustworthiness of IIoT systems during or after the transformation may
negatively affect the DX Journey or derail it. The transformation may for example
affect the compliance of a system, leading to certifiability issues.

Security18

Although it is part of trustworthiness, security merits to be discussed separately.
OT systems that were originally designed to be isolated are now exposed to attacks
of ever-increasing sophistication. This can lead to serious industrial accidents,
which can have serious direct impact on the IIoT system itself, the DX journey andpossibly the organization as a whole.

Such risks can lead to lost investments and squandered opportunities in the market. If left
unmitigated, these risks can also deny the organization the fruits of transformation.
In addition to these tangible risks, there are also risks to the intangible side of the organization,such as brand and the organization’s reputation. If these risks are not assessed and understood,
the organization could suffer long damage to its business and bottom-line.19

3.3

ENTERPRISE IIOT SYSTEMS AND DX JOURNEYS

An IIoT system that performs a key role in the organization’s ability to deliver value to its
customers may be considered as an “Enterprise System” that garners the same considerations asother “Enterprise Systems” (example ERP systems). The IIoT system may perform that
“enterprise” role on its own or as part of an integrated suite of enterprise systems.
Large enterprises have well-defined yet slow-to-evolve enterprise standards and best practices
for enterprise systems covering a wide range of aspects, such as:••••

Technical: architecture, technology, cloud usage
Operational: uptime, disaster recovery
Data protection, including security (system, data, software)
Data: data architecture, lifecycle

17

Refer to the IIC Industrial IoT Trustworthiness Framework Foundations
Refer to the IIC Industrial Internet Security Framework
19
https://www.forbes.com/sites/danielnewman/2019/07/09/every-digital-transformation-needsrisk-management/?sh=79998bf27141
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Compliance: legal and regulatory compliance, defensibility, auditability, traceability

IIoT systems deemed as “enterprise systems” must follow these enterprise standards and bestpractices throughout their design, implementation and operational stages. When such systems
are involved or even touched by DX initiatives, their adherence to these enterprise standards
must be maintained throughout the DX journey. Organizations must also be prepared to adjust
and evolve their enterprise standards to meet unexpected changes in market conditions.
An example of such an “enterprise IIoT system” is the IIoT system at Colonial Pipeline which
manages the actual operation of the pipeline infrastructure and is integrated with businesssystems on the on the IT side. Risks to either side of this IT-OT integrated solution portfolio canaffect the whole enterprise, as demonstrated by the recent security events there20. This meansthat in such enterprises, IT-OT considerations play a major role in the DX journey.

3.4

DX PROGRAM STRUCTURE

The organization must consider setting up a program to drive the DX initiative and execute on its
vision. This program must embody the executive vision and strategy and transform them into a
mission and a realistic and practical roadmap. The program must also be driven by a crossfunctional team (dotted-line) that represents the various stakeholders, who must remaincommitted and engaged throughout their involvement in the DX journey.
The DX program leadership must also understand that the answer to the basic question “what isDX” can vary depending on the stakeholder and whether the DX effort will be business-led or ITled. Business may be more interested in developing innovative and transformative models,Management may be focused on restructuring the organization and re-skilling its staff, IT may bemainly interested in what is involved to apply the transformative technologies, and finally
Operations may be focused on implementing projects that can help them optimize production
and operations and augment the trustworthiness of their IIoT systems.
The organization must also adopt a middle-out approach that takes into consideration the topdown and bottom-up perspectives of stakeholders and harmonizes the local DX activities withthe overall vision and aligns them.
Perspective
Top-down

Description
A senior executive should take on the responsibility of DX Executive Sponsor. This
Executive CxO should define the DX vision, and mandate and empower a “DX Tsar”
with authority and resources to execute and deliver on that vision.

20

https://www.bloomberg.com/news/articles/2021-06-04/hackers-breached-colonial-pipelineusing-compromised-password

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Perspective
Bottom-up

Description
Stakeholder groups may have their own and siloed perspectives about how to
optimize and transform their local operations (e.g. digitize factory production lines orimplement AI to optimize preventive maintenance).

This is easier said than done. The scope and timeline of individual DX activities may contradict
with each other. The DX activities in one silo may be interdependent with DX activities in anothersilo. Furthermore, some local DX initiatives may not align with the executive DX vision andtimeline. Where possible, projects should be realigned with the overall DX strategy. Projects thatare mismatched with the overall DX strategy in a fundamental way (scope, timeline, etc.) may
need to be restructured or perhaps opted out of the enterprise DX effort.
Creating an alignment between divergent bottom-up perspectives and top-down vision is hard.
Sustaining that alignment is harder. There are too many moving parts, too many friction points,
too many egos, etc. At the same time, the digital world requires foresight, agility, and speed.
There is little room for error.
In order to mitigate these challenges, organizations must “innovate by rapid experimentation”(Rogers 2016) and “test fast, learn fast, scale fast” (Kane et al. 2019). The way the DX programand its related projects are designed and implemented must be adjusted to allow fast
experimentation and allow pivots, even fast cancellation, when the implementation results
reveal negative signs. Conventional work processes, existing organization structures and funding
models may not allow such “innovate and fail fast” culture.
For these reasons, the DX journey should start with a clear roadmap and framework for changing
work processes in an innovative way. This must be closely followed with actual efforts toimplement these process changes.
The significance of the above for IIoT is that due to the complexities of IT-OT convergence, theprocesses involved in integrating IT and OT are substantially different from existing processes,
often conflicting with them. These differences can be organizational, technical, financial (funding,budgeting, etc.), and operational. Ideally, the DX Program should foster fast bottom-up feedback
about conflicts, while at the same time top management should be agile in responding to the
feedback and mitigate the elements of the management system causing the conflict.
For further details about the above, please refer to the “Designing new innovation process as a
key challenge to firms undergoing digital transformation in industry” article in this JoI issue andto the IIC “BizOps for Digital Transformation in Industry” whitepaper 21.

21

Refer to the IIC BizOps for Digital Transformation in Industries whitepaper by Dr. Chaisung Lim etal

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The DX Journey in the Enterprise and its Leadership
Figure 3-1 describes the structure of the DX program and the activities involved in it:

Figure 3-1: The Digital Transformation Program. Source: IGnPower.

3.5

DX PROGRAM LEADERSHIP

The individual assigned to lead the DX program in the enterprise, the “DX Tsar,” will play a crucialrole in the success of the DX strategy within the organization.
Ideally, this individual should be an experienced CxO caliber person who is mandated andempowered by the Executive Sponsor to execute and deliver on the DX strategy. The “DX Tsar”
must a versatile individual with a diverse range of knowhow and servant leadership skills,
including the following:
•
•
•
•
•
•

Understanding of the challenges facing the organization, from business, technical, risk,
and operational points of view,
Understanding of how and how far the organization should transform the way it delivers
value to the market,
How the innovative use of technologies can enable such transformation,
Be involved and possibly lead the pre-DX self-reflection efforts described in sections 3.1,
3.2, and 3.3,
Understand the diversity of culture of various functional stakeholders,Communicate the value of DX Program internally within the organization to thestakeholders and the executive sponsor in language that they understand and relate to,this includes the executive, operational, financial, risk and legal stakeholders, and14

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Communicate externally about the DX vision and strategy, or support the executive
sponsor in performing that function

The title (and reporting structure) of the “DX Tsar” may vary depending on the organization,
example Chief Digital Transformation Officer (CDxO), Chief Digital Officer, etc. The DX Tsar canalso be the CIO or a direct report of him or her. Alternatively, this individual can be an external
resource with the knowhow and skill sets described above.

4 EXAMPLES OF DIGITAL TRANSFORMATION
There is a wealth of publications on Digital Transformation in a wide range of industries. Below
are a few examples. It is worth noting that in some of the examples, especially Domino’s, the useof IoT technology was not the main transformative factor but was significantly neverthelessinvolved in the overall DX strategy and contributed to its dramatic success.

4.1

DIGITAL TWINS FOR PRESSURE VESSELS IN OIL AND GAS

Use Case

Description

Drivers for DX

Digital Twins for Pressure Vessels in Oil & Gas Industry
Shell is advancing the structural integrity of pressure vessels in its offshore
facilities using the engineering simulation solution from Akselos, whichuses a structural digital twin and cloud-based big data analytics. The
system captures real-world sensor data from rigs (information on
corrosion, hull damage, strain, wind and sea states, etc.) and performs
thousands of structural simulations on the Digital Twin. The intent it tohelp Shell achieve the following:• Create detailed and physics-based replica of physical assets• Measure real world asset loading and condition• Perform continual prediction of structural integrity• Guide optimization of inspection, maintenance, and repair processes• Perform operational scenario planning support••••

Improve industry practice for inspection and maintenanceUnlock full potential of robotic inspection
Increase accuracy and speed and reduce cost of assessment
Produce highly predictive framework

DX-enabling Technologies • Structural Digital Twin by Akselos LausanneTransformative ValueIIC Journal of Innovation• 45% reduction in downtime• 25% reduction in maintenance• Improve overall asset efficiency

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Use Case

DX in the Enterprise

Sources

4.2

Digital Twins for Pressure Vessels in Oil & Gas Industry• Digital Twin based offering is key for transforming the maintenancefunction at offshore operations at Shell by reducing downtime andimproving asset utilization and efficiency• Digital Twins and Engineering simulation technology is being applied in
the transformation of other functions in offshore operations at Shell,
example life extension through predictive maintenance22.
• These digitalization efforts are focused on specific functions andprocesses within Shell’s offshore operations. They are also primeexamples of how “local” transformation efforts can be used as
stepping-stones for more strategic enterprise DX efforts. 23,24• Akselos25• Deloitte

STEEL MANUFACTURING QUALITY INSPECTION

Use Case

Description

Drivers for DX

Steel Manufacturing Quality Inspection26
The QA Departments of steel manufacturers need to test samples of thesteel they produce to make sure it meets steel industry standards. Toshiba
sold steel manufacturers a steel inspection equipment (MetalSpector) that
included an auto-focus optical microscope, color area sensor camera, andan image processor.
••••

Labor intensive QA process
Long inspection hours caused by increasing number of samples
Lack of consistency in grading judgement depending on inspector
Skill transfer difficulties from veteran inspectors to junior inspectors

Toshiba replaced MetalSpector with a cloud-based and AI-enabled Steel
Grade Evaluation as-a-Service offering:• Capture steel images into a historical database• Transfer image data to a cloud service that feeds an AI model estimator
DX-enabling Technologies• AI model analyzes digital images and estimates steel grade quality• Estimates is sent back to client through the service offering• Estimates used to assist QA inspectors in making final decision aboutsteel grade quality

22

https://www.hartenergy.com/ep/exclusives/life-extension-through-predictive-maintenance179799
23
https://www.rechargenews.com/transition/shell-inks-key-energy-transition-digitalisation-dealfor-oil-gas-and-wind-projects/2-1-931734
24
https://www.akselos.com/news-detail/akselos-and-shell-sign-three-year-agreement25
https://www.akselos.com/storage/upload/media/resource-pdf/shell-success-story-north-sea.pdf
26
Refer to the article in this issue of the Journal of Innovation titled “Applying Digital Transformation
to Steel Grade Evaluation Services”

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The DX Journey in the Enterprise and its Leadership
Use Case

Transformative Value

Steel Manufacturing Quality Inspection26• Business application changed from product function to product usage• Business revenue stream changed from hardware sales model to as-aservice sales model• Data integrity eliminates data fraud• Transfer of skills to the junior inspectors

DX in the Enterprise• Project has Divisional CxO visibility and is being used as one of the key
measures to show value of DX for the enterprise

Sources• Toshiba

4.3

NIKE

Just like many other companies in the consumer and fashion industry, Nike was heavily affectedby COVID-19 lockdown. Nike closed more than half of its 1,100 stores in China in February 2020and half of its US stores by mid-March.27 In order to maintain their connection with customers
and keep the business and the brand alive, Nike boosted its digital strategy and its direct sales. It
also created multiple digital spaces for customers to interact with the brand’s big influencers: thehigh-performance athletes.
Nike also deployed several digital platforms for free. Nike’s digital ecosystem: A library of digital
workouts and resources for free. Livestream workouts: Live workouts are streamed every
Saturday by Nike Master Trainers on YouTube. Digital Fitness Challenges: The Living Room Cup isa digital workout series where athletes set challengers for users to take part in at home.

4.4

DOMINO’S

Domino’s story is a fairy tale of Digital Transformation in the 21st century28. In the 90s there wasno home delivery system for pizza. For most people in North America, the main choices were to
go to either Pizza Hut or Domino’s. Pizza Hut used to win most of the time because they used togive experience and ambiance at the restaurant that Domino’s could not.
Since then, Domino’s has pursued a multi-pronged strategy mainly relying on digitaltransformation. It invested heavily in digital capabilities and with quick cadence, starting withrock-solid IT capabilities that would be able to support the new digital innovations:
•
•
•
•

27
28

2008: “Pizza Tracker” to keep customers updated on the progress of their order,
2011: iPhone app to allow customers to order on the go,
2015: “Anywhere” to allow customers to order from anywhere and anytime,
2016: world’s first drone delivery of pizza, andhttps://digital.hbs.edu/platform-digit/submission/nike-just-do-it-differently/
https://thestrategystory.com/2020/07/11/dominos-digital-transformation/

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The DX Journey in the Enterprise and its Leadership•

2020: “Domino’s Carside Delivery service” as a way to fight against COVID through atransformation of its carryout method.

Domino’s is today a technology company with half of its workforce at headquarters in softwareand analytics. In FY2019, it achieved an annual revenue of $14 billion through its 17,020
restaurants across the world. A $1000 investment in Domino’s stock in 2004 (the year they went
public) was worth $58,000 in 2020.

5 CONCLUSION
Digital Transformation is the inescapable journey of the organization from the “mounting
challenges” to the “better outcomes” that address these challenges. DX at the enterprise level ismore encompassing in scope and complexity than its “simpler” DX at a process level brethren(project), especially in regards to the IT-OT convergence technical and organizational issues.
DX at the enterprise level is not a cruise. It is a trail trek with plenty of opportunities to makewrong turns that could derail the strategy. Before jumping into implementation cycles, theorganization should define the executive vision for DX and establish a program that transforms
that vision into a mission and a tangible, and agile roadmap. The program must also be led by anempowered “DX Tsar” who guides the DX efforts and steer them as conditions change.

6 ACKNOWLEDGEMENTS
The views expressed in the IIC Journal of Innovation are the author’s views and do not necessarily
represent the views of their respective employers nor those of the Industry IoT Consortium®.
© 2021 The Industry IoT Consortium® logo is a registered trademark of Object Management
Group®. Other logos, products and company names referenced in this publication are propertyof their respective companies.

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