Background and challenge
The client, a leading vertically integrated metals producer and manufacturer, had an urgent need to develop a digital roadmap and to integrate new digital capabilities throughout its operation. It faced a range of industry challenges such as meaningful supply-and-demand fluctuations, growing environmental and safety concerns, and a talent gap for skilled manufacturing labor. Meanwhile, its business was threatened by a number of increasingly digitally capable competitors and a customer set that was beginning to demand greater accessibility and visibility through digital solutions.
The client needed help understanding the “art of the possible” with respect to potential digital investments, recognizing which of the opportunities should be prioritized based on their strategic and financial value, and knowing how to reorganize for success within the digital transformation.
L.E.K. was tasked with developing a 10-year digital roadmap for four separate business units (BUs) that encompassed a full review of their current IT and OT capabilities; identified, quantified and prioritized digital investment opportunities; and assessed and recommended the best way to build the digital organization needed to succeed with the roadmap.
Approach and recommendations
Over the course of the engagement, we addressed six foundational digital topics.
- Digital capability assessment: Assessed the client’s digital maturity across its entire tech stack, including both IT and OT assets, identifying both key assets and critical gaps to address (see Figure 1)
- Art of the possible: Highlighted dozens of relevant and potentially high-impact uses of technology to illustrate the range of outcomes that could be achieved through digital transformation initiatives
- Strategic imperatives: Assessed the client’s strategy and analyzed the competitive set to isolate the key digital capabilities the client would need to develop in order to maintain and enhance its market position
- Digital roadmap development: Built detailed 10-year digital transformation roadmaps for four BUs, totaling over 50 unique initiatives to meet the client’s strategic imperatives for continued profitable growth
- Financial analysis: Developed a 10-year investment plan with expected timelines and ROIs for each initiative, taking a portfolio approach to investment prioritization using medium-term initiatives to drive momentum and fund the long term (see Figure 2)
- Key success factors: Recommended necessary, urgent changes required to the organizational design in order to execute the digitization roadmap
The client now has a clear vision of more than 30 prioritized digital initiatives and recommendations for critical organizational changes, sequenced to account for technical dependencies, level of impact and ease/time of implementation. In total, the roadmap has the client poised to unlock hundreds of millions of dollars in cumulative EBITDA benefit over the next 10 years.