Digital transformation of industry today remains among the main priorities for Russian industry. Despite the existing risks, enterprises continue to implement investment projects in this area – for example, more than 70% of Russian industrial enterprises continue to invest in digital development in 2024, and more than 30% increase investments in this area. At the same time, for most industries, the task is still unresolved, and Russian companies are not alone in this – according to BCG estimates, just a third of global digitalization projects are successful. What challenges do not allow to reverse the situation, and are there opportunities to eliminate them?
Budget framework
Lack of funding or budget constraints are still an important obstacle to digital transformation. For industrial enterprises, the factor is especially significant. Compared to the development of an online application for a bank or, for example, a marketplace (these segments have been and remain at the forefront of digitalization for many years), IT modernization of production facilities requires much more significant investments – primarily because of the need to formulate strategies, new approaches, modernize key business processes, train employees (and this is hundreds of millions of rubles!). That is why the industry lags behind the “advanced” segments in terms of the rate of digitalization.
For many industrial enterprises, the transition to “digital” today is limited to the introduction of “1C: Accounting”. But the purchase of tools, such as “data management organization” or the introduction of engineering analysis programs, computer modeling and design, is not always a question. Not to mention AI technology. However, these technologies and qualifications ensure the growth of labor productivity, they ensure the volume of products; minimize defects, reduce return rates; finally, it is possible to improve the quality of industrial products.
Digital inertness
Yet, the barrier to digital transformation is often not only the lack of financial resources. The enemies are inertia, and often resistance, albeit hidden, among the performers – middle managers, technical specialists, workers of various qualifications, etc. Of course, any team always resists change to one degree or another. And where we are talking about “digital”, even more so. Perhaps, in my practice there was not a single project where I would not have to overcome this inertia. It is no coincidence that such resistance is among the top 3 barriers to true digital transformation of companies.
There is only one way out: the creation of not just a “digital”, but a comprehensive business strategy, which provides for the formation of a map of end-to-end business processes, the creation of effective mechanisms for bilateral communications, and the unification of specific highly qualified specialists into a team for the task. And here the key role belongs to the leader who will be able to overcome such inertia. This means that at the very beginning of the project, express training of specialists, the introduction of special programs and training methodologies are needed. That is why, as I have said many times, it is so important for technical universities in our country to add training in macrodisciplines to their programs, such as the psychology of interpersonal relationships, the development of emotional intelligence, etc.
Personnel hunger
Personnel hunger in our market is a real headache during many years. There are many reasons for this – the insufficient scientific and educational base for training specialists, as well as the changing rules of the game, and much more. But today, in my opinion, almost the main problem is unfair competition of production sector with banks and Internet companies. Today, banks, marketplaces and large Internet businesses can pay IT specialists a decent salary, but machine builders, alas, cannot. A case in point: sometimes you find a talented student somewhere in a non-capital city, you raise him for three years at, for example, a defense plant, and then he goes to a large salary in some large bank. Our machine builders survive in such unfair competition. Despite the fact that they are (or should be) the flagships of the domestic economy.
And yet the problem needs to be solved not only by the redistribution of funds and salaries, especially in such a situation, because much depends on intangible motivation. Talents remain in the team and are not always motivated by money only. It is important for many how comfortable they are working with a specific leader and in this team. People are interested and consider important ideas that the leader lays in them. I know from the experience of successful projects: in fact, smart people live on ideas. And ideas determine our behavior.
100% import substitution
The achievement of technological sovereignty is among the most important tasks for industry today. But is it worth interpreting this task as the need to abandon completely any import? No, of course! One sufficient reason: it takes not one or two years, but a dozen years to create complex fault-tolerant entreprise-level systems! And this is not to mention the fact that serious investments will be required, a qualified staff, which is now not in oversupply in the country.
Alas, all this is confirmed by the current realities of the market for heavy industrial IT systems: import substitution of PLM and ERP solutions has not yet been properly implemented. We continue to design aircraft and ships on Siemens, AVEVA, Dassault solutions, and 50% of Russia’s GDP is produced by companies working for SAP. And this despite the fact that Russian vendors are developing, and are doing it actively.
Wouldn’t it be a more correct format to first start localizing imported software in Russia (and this requires much less cost and effort than creating something from scratch), while focusing on creating a Russian engineering base, gradually developing the expertise of Russian vendors, and building up their product portfolios?
Lack of cooperation
Cooperation is the most important aspect of the production of complex products. Do you know how you can measure the level of development of society? Cooperation. 50 thousand years ago, one person made a spear with a tip in one hour. And what does it take to create an airplane or a rocket now? Cooperation of a million people. And the weaker it is, the more difficult it is to create something super complex and necessary. However, cooperation requires a change in basic paradigms, such as, for example, “every stranger is not an enemy, but a friend”. It is necessary to look for solutions in the “alien head”, suppressing your own ego. And work carefully with the culture of organizing society.
The coordination of the actions of Russian software developers is especially important in this regard. Alas, today the imbalance in this market has reached its climax – dozens of companies offer us similar, and simply duplicating products, leaving many unfilled food niches. Industrial enterprises are also trying to develop their own products. These efforts are not always successful. And the overall goal is pushed back.
This is not good. In my opinion, the best IT companies in the country need to unite efforts and create a single line of high-class products that would cover the entire range of needs of domestic consumers, including, and above all, in the industrial sector.
Component base
Perhaps one of the most difficult challenges the domestic industry faces on the path of digital transformation is dependence on the imported component base. And it is precisely with the lack of mass production of Russian processors, microcircuits, semiconductors that difficulties with import substitution are largely connected. Let me remind you, according to RANEPA estimates, the Russian machine tool industry is still dependent on imports by 95.3%, in microelectronics – by 92%, in shipbuilding – by 64.4%, in the medical industry – by 60.1%, in aircraft manufacturing and chemical industry – by 52.8% and 53%, respectively.
System public programs for the development of domestic microelectronics will allow to cope with this challenge. But, even according to state guidelines, the share of Russian equipment in especially critical basic technological processes should reach 70% only by 2030. So, it is necessary to abandon the foreign base gradually, without the indiscriminate exclusion of imported components by 100% at once. A soft transition to domestic components in complex technical devices can become a way to get rid of dependence and at least will not interfere with digital transformation programs in the industrial sector. In other words, “to eat an elephant” – whether it is the creation of a domestic component base or its own software – it is still better in parts. In this case, the chances of success are disproportionately greater. As well as the chances of successful digital transformation of the country as a whole.
By Oleg Logvinov, digital transformation expert, CEO of Logvinov Consulting Service