Your factory may truly disappear if you don’t take care of digitalization. And this is not a rumor

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You are currently viewing Your factory may truly disappear if you don’t take care of digitalization. And this is not a rumor

It is hard to talk about the disappearance of companies, the innovation gap, or the loss of market potential without remembering Kodak. If this story is already familiar to you, feel free to skip to the next topic. If not, read it carefully (please).

If we stepped back in time a couple of decades to buy a camera: it would not be strange if the camera, its film, and finally the photograph were provided by the same supplier: Kodak. The famous company was founded in 1888 and for a long time one of the most valuable brands in the USA.

Knowing the rise and fall of Kodak is an excellent way to understand how difficult it is to maintain a great business in this world of dizzying changes, where it is usual to see giants of the industry fall. The case of Kodak is exemplary: the first digital camera was born in their laboratories (1975) and they began to launch their first digital cameras to the market in the nineties. They were warned at least 10 years in advance of the relevance that digital photography would have and still went under. In 2012, Kodak filed for bankruptcy.

Neither the 120-year history nor the fact of owning about 90% of the North American camera film market, were enough.

“Oh no, but my industry is different”

I often call this statement “the pattern of failure”. There is a great book written by the Spaniard Ferran Soriano that strongly mentions this thought. He says that some business owners tend to think that their company is different, that they understand the market, and that nothing will change the way things are done. For decades this thought may even have been valid. But the level of disruption is frightening in recent years, and factories that don’t adapt tend to fall by the wayside.

The truth is that cases like Kodak’s become a reality every year. The company mortality rate in some countries is around 10% (check OCDE and US, UK data).

It’s ALL about culture. And the C-Suite is vital for this “new culture”

Therefore, the main bottleneck today is no longer financial. The high investments required to acquire technological solutions used to scare us, but this is now resolved to a certain extent, as mentioned. Now the difficulty is precisely cultural. It is necessary to insert these tools into the small entrepreneur’s routine. Even today, many entrepreneurs do not have the knowledge on how and why to apply these technologies in their companies. It is necessary to “evangelize” the sector with the support of large corporations, institutions, and the startups themselves, among other players.

Digital Transformation, therefore, has already begun and involves not only large but also small entrepreneurs. Those who want to stand out and survive in the segment in which they operate need to seek support from technological solutions in their processes. Failure to adopt these technologies will almost certainly result in the company’s bankruptcy, sooner or later. There is no reason to ignore this reality since adherence is increasingly simple and cheap. The competitive gap between those who use and those who continue with the manual will increase too much within SMEs – until it becomes unsustainable for those who resist the transformation.

By Bruno Rezende – CEO of 4Intelligence

If culture is already a challenge, imagine when the barrier comes from the top executives, or especially from the owners? The problem is no longer money or difficulty of implementation, the current problem is really mindset and adaptability.

Established factories, which dominated the market for years, can disappear when big investment banks start putting trucks of money in other companies that are born faster, more agile, and with an eye on the technology that optimizes costs and boosts revenue.

As we said above, it is already a matter of survival.

As I write this text, I keep thinking: what other arguments can I use to make a manufacturing entrepreneur understand that his company may actually disappear? I believe that many of them have already been mentioned above, and they are frightening. I also leave below a list of statistics made by global consulting firms that may open your mind.

Here is my appeal and incentive: either the companies evolve or disappear.

It is quite easy to imagine some of these scenarios taking place, practically and with a clear example: let’s assume that your direct competitor can map production data in real-time, has predictive failure modeling, makes quick decisions, and continuously improves processes. This leads to greater operational efficiency, which leads to cost reduction. And this can lead to various scenarios: more bargaining power with suppliers, more cash on hand for mergers and acquisitions, better pricing for customers, greater investment in sales potential. Still, have doubts that this will affect your plant?

Stats that will blow your mind

55% of companies without a digital transformation believe they have less than a year before they start to lose market share

Nearly 77% of companies say their relationship with technology is average or above average.

65% of companies are positive about their ability to adapt to technological disruption over the next three years.

Only 7% of companies have fully implemented their digital transformations.

27% of companies say digital transformation is a matter of survival.

45% of executives don’t think their company has the right technology to implement a digital transformation.

87% of companies think digital will disrupt their industry, but only 44% are prepared for potential digital disruption.

The eight axes of digital transformation according to CESAR Institute

Migrating to digital is not just about changes in the offering, as entire organizations are being completely rewritten to remain relevant. To understand a company’s level of digital maturity, it is necessary to broadly assess the impacts of the transformation, looking inside and outside the organization. The eight aspects we present in our Digital Transformation methodology, are:

Culture & People

It is the perspective of the human being in relation to changes in the digital era, both in the role of leader-author of the transformations and as an instrument in the new configurations of societies and businesses, with a focus on innovation practices and transformative entrepreneurship within organizations.


The networked life and the new communication ecosystem have changed the way we relate to each other. The consumer journey, digital marketing, branding, and e-branding are essential to understand, capture, and satisfy the new digital consumer.


In the digital age, the boundaries of competition are no longer the same. Even the most diligent and prepared companies can suffer from attacks from more agile, unexpected, and asymmetric competitors.


Innovation has other methods and processes. We have gone from a world where companies designed and launched their products on the market alone to a world of co-creation and continuous experimentation. The rule is to learn fast! And to innovate continuously.


Seek to understand how companies digitally engage with suppliers and are inclined to use software to manage their internal operations, optimize the use of physical assets, and relationships with customers and suppliers;

Business Models

Digital technologies are tools to access new markets and find new ways to grow. Asymmetric business models are the main agents of disruption for established businesses. Understanding and modeling new business models from the Digital Transformation journey is essential for the survival of organizations;


Data is extremely relevant for the strategy and decision-making of today’s organizations. But few know how to extract value from them and, at the same time, ensure intellectual rights in digital assets, privacy, and consumer security;


Finally, to succeed in the digital age, organizations need to go beyond knowing digital technologies (such as IoT, Big Data, and Artificial Intelligence) and empower themselves with them, as they constitute the strength of competition.