by Prof Pieter Steyn, Cranefield College

Project management acumen

A catalyst for organisational success in Industry 4.0

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The world is witnessing a profound transformation and change in all areas of private and public corporate life in the Industry 4.0 economy. Organisational and private lives are becoming highly volatile and value-driven, demanding continuous innovation and learning. These changes, caused by the inflow of new digital enabling technologies intertwining with our daily lives, influence the way we are performing our organisational activities and daily chores. Moreover, this is only the first taste of dramatic changes in the years to come.

The Third Industrial Revolution saw the optimisation and automation of organisational resources as major success factors. The Fourth Industrial Revolution (Industry 4.0) business ecosystem in which the world now finds itself does not depend only on optimisation, automation, innovation and the competitiveness of resources, but also on inter-organisational value chain innovativeness, complementary partner technologies, innovative products, digitisation and supporting services systems.

According to the World Economic Forum, Industry 4.0 affects four main organisational elements, i.e. customer expectations, product enhancement, collaborative innovation and organisational forms. Customers are increasingly at the epicentre of the economy. Leaders and managers have a duty to ensure that the design for customer needs delivers a competitive advantage. In the Industry 4.0 economy, an effective and efficient design capability has emerged as an important competitive key success factor. The advent of modern key enabling technologies (KETs) and virtual networks of organisational and knowledge-worker partners are supportive of the above. The Industry 4.0 explosion of complexity is caused by the rapid development of global markets and the continuous creation of new technologies and products. This stimulates the emergence of new forms of organisations and competences.

The aim of key enabling technologies is overall digitisation with the Internet of Things (IoT) and services. Industry 4.0’s strategic transformation and change, driven by modern information and communication technologies (ICT) artefacts, allow for the introduction and integration of new business models of vertical and horizontal supply and value chains. Moreover, the dynamic complexity of the modern technologies—robotics, artificial intelligence (AI), mass data, IoT and the integration of information technology and operations technology, to name but a few—calls for the specialisation and sustainable collaboration among partner organisations, and also demands appropriate organisational forms, mindsets and human talent.

It is evident that technology changes are not enough to achieve the expected results, as was the case in the past. The renowned American trend forecaster, Gerald Celente, on the issue that futurists often equate advances in technology with advances in civilisation, opines that it requires a good understanding of how novelties will affect personal and business lives, organisations of all kinds, and how it will reshape organisational landscapes, societies and cultures. He claims that it is therefore vitally important to gain a holistic understanding of the risks involved and to plan appropriate solutions for the timely mitigation of the risk and associated complexity. This is where we are in the current Fourth Industrial Revolution. The burning question is how organisations can successfully cope with such complex strategic transformation and change processes. Knowledge and insight into every segment of Industry 4.0 technology and businesses complexity phenomena are needed to understand and manage it successfully.

Consequently, organisation design, development and governance have entered a challenging new phase with project management acumen as the foundation. Innovative inter-organisational value and supply chains are created in collaboration with partners, and these resultantly operate in a local, regional and global collaborative organisational ecosystem. Innovative product, service, process design and development have become complex and highly important project-driven competitive factors. The emergence of new business models means that organisational culture, the harnessing of human talent and organisational forms need profound adjustment. Importantly, supply chain and project processes are being shaped cross-functionally in the Industry 4.0 organisational value chain and are programme-managed. The shift from the simple digitisation of Industry 3.0 to innovation based on combinations of complex Industry 4.0 technologies is forcing organisations to re-examine the manner in which they operate and do business.

In addition to new technologies, business models and systems, the Industry 4.0 economy demands new relationships, enhanced personal competencies and a sound corporate culture. The critical integrators of new value chains and business processes are collaborative research, innovation and development projects and programmes that act as organisational vehicles and enablers of novelties, transformation and change, technologies and systems. Project and programme management now play a central role in the strategic and operational governance of Industry 4.0 organisations, and are the proverbial ‘blood vessels’ of organisational and inter-organisational supply chain and project systems. Success is embedded in possessing the project management skills that form the foundation of programme and portfolio management, and integrating them into a workable value-driven cross-functional organisational system. Modern technology-driven organisations require a high level of technology literacy, skills in techno-entrepreneurship and innovation. Importantly, they need to demonstrate exceptional project management acumen.

Organisations are compelled to transform by abolishing bureaucratic practices and structures while adopting knowledge-based virtual dynamic learning paradigms and designs. This demands sound governance, supported by collaborative transformational leadership excellence and knowledge of systemic project and programme management. Transformational leadership with an unwavering commitment to continuous improvement is of paramount importance. Organisational improvement and performance profoundly depend on it. Effective and efficient cross-functional and inter-organisational management of supply chain and project portfolios combined with virtual networks of partners is a key factor of success in the Industry 4.0 economy. Partners may be small, medium-sized and/or large organisations. Valuable opportunities are emerging for the creation of new small and medium-sized entrepreneurial enterprises. This will boost opportunities for job creation and grow the economy. Entrepreneurship accordingly has a pivotal role to play in Industry 4.0. Entrepreneurs use creative faculties to generate new products and services, and exploit a new generation of opportunities in the developing collaborative market.

It is essential that the modern workforce be educated and skilled to cope with the Industry 4.0 dispensation. When human resources are elevated to higher levels of education, the benefits are exponential. Hitachi Corporation’s Hiroaki Nakanishi believes that Industry 4.0 will require a radical shift in how people are educated and trained in order to sustain their personal value to society and the workplace. Programme management has evolved to become the kingpin for leading, managing and governing Industry 4.0 entities. Moreover, cross-functional programme-managed structures and paradigms combined with effective and efficient collaborative transformational leadership, management and governance is the ideal vehicle for delivering the integration, coordination, collaboration and synergy required for mitigating complexity and risk, while achieving essential organisational performance, strategic benefits and value-add in the Industry 4.0 environment.

In the introductory paragraphs, the four aspects most affected by the Industry 4.0 economy; customer expectations, product enhancement, collaborative innovation and organisational forms were highlighted. In all four aspects, project management principles, techniques and skills that embed project management acumen in the mindsets of leaders and followers play a decisive role in achieving organisational success effectively and efficiently through programme-managing the cross-functionally structured value chain.

With respect to customer expectations, project management acumen delivers crucial customer focus; regarding product enhancement, the required innovative continuous improvement projects; regarding collaborative innovation, the dynamic learning mindset in the culture of the organisation; and finally, delivers the matrix methodology to lead and manage the cross-functional processes of the new organisational forms and its virtual networks of partners in the Industry 4.0 business ecosystem. Hence, it is patently clear that project management acumen is the catalyst for organisational success in the Fourth Industrial Revolution economy. 

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