FROM CLOUD COMPUTING and artificial intelligence to robotics and 3D printers, Industry 4.0 technologies are evolving. Not only do they have more technical capabilities and organizational reach than they did just a few years ago, they are also more affordable—making them more accessible to organizations of all sizes. These Industry 4.0 technologies empower companies to undergo a digital transformation, an effort that can help companies save time and cut costs while also empowering them to innovate and grow. 

“True digital transformation typically has profound implications for an organization,” says Tim Hanley, global industrial products and construction sector leader at Deloitte Global. “It affects strategy, talent, business models—even the way the company is organized.”

But according to a Deloitte survey of more than 350 executives across 11 countries, despite a belief in its strategic importance, most executives aren’t fully exploring the possibilities of digital transformation. Instead, their investments are conservative, designed to protect rather than evolve the business. And spending is lacking when it comes to more robust R&D initiatives like new products or business models. 

When companies use their digital transformation initiatives to simply maintain existing processes, they sacrifice transformative opportunities. And in many cases, this means leaving future growth on the table. As the pace of innovation continues to increase, the successful businesses will be those who embrace digital transformation as a way to differentiate, not just a way to keep up.

Move Beyond Operational Upgrades 

True digital transformation does not require an immediate overhaul of business models. Instead, an evolution of current offerings can lead to revenue growth in the form of improved products or services.

Rather than adopting technologies like AI simply for the sake of innovation, for example, organizations can use Industry 4.0 solutions to build capabilities that enhance their current business processes. They can then build on those enhancements to drive further innovation.

“Use of these technologies is perhaps reflective of each industry’s various complexities, whether the distributed nature of manufacturing or the remote monitoring needs of mining and oil and gas,” says Hanley. “Organizations can adopt the technologies that best suit the complex needs of their industry.”

Invest in People (and the Long Run)

Research suggests that transformative benefits in business often take time to accrue. For many organizations that means longer-term opportunities are neglected in pursuit of shorter-term objectives. 

Embracing more-innovative digital transformation requires a mindset shift: one that includes finding and retaining top talent, gaining internal buy-in, and embracing emerging business models. But all three are important to meaningful transformation, says Brenna Sniderman, senior manager and subject matter specialist at Deloitte Services LP’s Center for Integrated Research.

“These three concepts are linked,” she says. “It can be extremely difficult to pursue new business models without the right people in place—or a clear consensus on strategy.”

Increase Time Spent on R&D Initiatives 

Even with the right people and a clear consensus, most companies find it challenging to make investments toward outcomes that might appear years down the line.

“Only 50 percent of CEOs in our survey indicated the importance of digital transformation to maintaining profitability,” says Mark Cotteleer, research director of the Center for Integrated Research at Deloitte Services LP. 

But if the digital age has taught us anything, it’s that technological disruption and transformation are at the core of long-term profitability. Consider, for example, that ride-share services in 2014 commanded just 8 percent of the business-traveler ground-transportation market, where taxies commanded 37 percent. In 2018, ride sharing jumped to over 70 percent, while taxis fell to 6 percent. Similar stories across industries are an important reminder to companies to invest R&D resources toward new products and strategies for the future. 

“Those that fail to invest risk being left behind,” adds Cotteleer.

While the imperative to keep pace with digital transformation might feel overwhelming, the good news is that there’s no one right way to go about it. Instead, companies should ensure that the investments they’re making are strategic to the business, and that they keep the long-term possibilities in mind.