Digital Transformation Of Companies: Greenfield Restart Or Transformation?

It is becoming increasingly clear to many companies that they can no longer avoid a reorganisation, specifically a digitalisation. What is still going well now will almost certainly be obsolete in a good ten years time and will simply no longer (be able to) happen in the same way in an ‘Internet of Things’ (IoT). What is initially evident today in communication, like the increasing importance of websites and social media (also for b2b), will also apply to production in the foreseeable near future.

To approach the whole thing fundamentally and anew – on a greenfield site – or to implement it in a transformation is one of the most important decisions for companies. But it has to be made if you still want to be in a good position in ten years’ time. There will be no ‘business as usual’. These two approaches are often referred to as ‘brownfield’ (converting the existing in small steps) or ‘greenfield’ (starting new and smart on a greenfield site).

The obvious brownfield approach builds on the existing product range, machinery and IT systems and develops them further. And it serves the purpose of safeguarding past investments worth billions while still making the company future-proof.

A greenfield transformation is quite different: here, a kind of smart factory is created, starting with ‘state of the art’ networked machines and IT systems. This undoubtedly ideal approach will probably only come into consideration for very few companies, and not only from a financial point of view. It is more feasible to tackle new product generations or a specific production process with modern systems throughout. A ‘greenfield light’, so to speak, in which definable areas are transformed and repositioned.

Smart Maintenance Versus High Initial Costs

Those who can plan and implement a project from scratch have a great advantage: old systems and usually inadequate possibilities for data acquisition and even more so data exchange do not have to be laboriously upgraded to the new level. The components are then based on the latest technologies and can be seamlessly integrated and feature modern interfaces, sensors or machines. The advantage is thus quickly defined: One can draw from the best resources, is maximally flexible and thus future-proof.

The downside, however, writes Larry Terwey in the trade journal ‘MM Maschinenmarkt’, is that all systems and components have to be purchased from scratch – so the initial investment is very high.  This is especially true when it comes to a smart factory where products and components first have to be newly developed. On the other hand, companies that opt for this approach can expect significantly lower maintenance costs, according to Terwey. This is because modern systems facilitate remote access and pave the way for IoT scenarios such as remote repair and remote software deployment.

Transforming The Inventory

Many companies do not want to lose sight of their inventory, often millions were invested in the past that entrepreneurs would like to protect – this is especially true in the manufacturing industry. Instead of purchasing new equipment, they, therefore, prefer to upgrade their machines to smart devices. The products are retrofitted with sensors or communication technology, for example, which does not have to be negative. Companies that proceed in this way often even make faster progress, quickly gather essential information and gain valuable experience. Even something like the installation of sensors for temperature, pressure, air quality or the like can bring a clear gain in information.

Ultimately, there is no right or wrong, no better or worse. Because the complete answer can only be found between a differentiated, analytical approach and a precise calculation, as well as project planning created according to individual company goals, the technical status quo and the budget framework.

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