In Germany, Industrie 4.0 has remained a top strategic approach to leverage digital technologies to improve competitiveness of various industries and sectors through the industrial Internet of Things (IoT), big data and data analytics.

While Gartner sees this strategy emerging in European countries (such as Italy, Spain and the UK), as well as Asia/Pacific, focusing on smart manufacturing and supply chain, a number of questions remain on every CIO's mind.

Frank Ridder, managing vice president at Gartner, shared his views to help organisations initiate their Industrie 4.0 strategy.

How does an organisation start an Industrie 4.0 programme, and what is first?

A: The German Industrie 4.0 initiative constitutes a digital transformation that requires change management in business and operations, and it is a journey.

First, organisations need to define strategic goals, which are tailored to their requirements and core competencies that they want to digitalise to create competitive thrust. An organisation with a solid strategy for Industrie 4.0 represents an opportunity to streamline processes between business units and across operations, such as production, logistics or customer care. Furthermore, that strategy helps organisations optimise sourcing or innovation projects by including customer information or creating dynamic service or maintenance agreements.

It is critical that leaders also prepare their organisations and the support functions for a journey of change culture and management, which involves breaking with conventional wisdom and includes innovation and knowledge exchange among employees as a part of best practice.

CIOs should develop the strategy together with the other C-level executives and support the discussions, for example, on more-transparent processes, quality or knowledge exchange that leverages technology as a platform.

Often, workforce skills lack the progress of technology adoption. How can IT leaders make their staff more digital?

A: The transition to Industrie 4.0 requires huge levels of change and new skills not only within discrete functions, such as manufacturing, but also across the entire organisation — touching almost every department and function.

While technology is a significant enabler of digital business, we found that organisations surveyed by Gartner ranked big data/analytics, skills/expertise and process management as key technology inhibitors for faster digital business adoption.

However, there are technologies that are a significant accelerator for digital business technology. Letting the IT department cover most these issues alone will suggest a lot of money and time spent or an insurmountable obstacle. CIOs should expect the investment into digital business technology to lead to new sourcing arrangements and increased use of external services.

Regarding skills, staffing up for digital business is much more than identifying technical skills. To be successful, business leaders need to design and draft teams of people who come as close to possible to a digital business dream team. Talented people, and qualified experts inside and outside the organisation, will supply the requisite base of knowledge, expertise and skills (see Figure 1). Their mileage will vary, as priorities, timelines and risk appetites vary.

Figure 1. Example of Digital Business Dream Teams

Source: Gartner (February 2016)

Mr Ridder provides the latest analysis on Industrie 4.0 on 2^nd March in Hamburg. Gartner analysts will also discuss Industrie 4.0 at the Gartner CIO & IT Leadership Summit 2016, June 6-7, in Munich, Germany. Follow news and updates from the event on Twitter at #GartnerCIO.