On June 21st (2024), we held the 3rd edition of the Digital Transformation Event organized by the Information Systems Group of Industrial Engineering & Innovation Sciences at TU Eindhoven.
The objective was to bring together practitioners from the Eindhoven Brainport region and TU/e researchers to discuss the challenges they face in digital transformation and sustainability (twin transformation) and explore opportunities for collaboration to address these challenges.
Throughout the event, we explored how concepts such as twin transformation, circularity, and ESG (Environmental, Social, and Governance), CSRD shape the trajectory of industries and offer opportunities for collaboration.
As always, hearing from the practitioners was extremely insightful, and it is clear that there is a lot to do!
We would like to thank all participants for their fruitful discussions and contributions. Special thanks go to our guests from PwC, Tommy Mars and Marijn Swaak, who shared their experiences with the current industry challenges in twin transformation.
Below are some takeaways from the breakout sessions.
We look forward to seeing you at the next edition of the event!
Topic 1: system, process, and data
Challenges in data availability: Data is scattered and difficult to collect consistent sustainability data, e.g., among diverse suppliers. International regulations, e.g., customs are also an issue. You need to motivate your suppliers and other partners to get data overall in the supply chain.
Data is collected mostly manually and error prone, automation is needed.
Specific processes for sustainability need to be defined, but also sustainability issues need to be integrated into current processes.
Standards and references are needed to align data collected from multiple points, e.g., on ERP systems
Data governance for sustainability is a major need, concerning data recording, collection, quality, data reporting and management responsibilities, use, and so on. Our research should focus more on this.
Difficulties of creating data lineage: Data should be tracked from upstream to downstream supply chain operations and also during product use phase. Certification and material passports can help in this. Dataspaces can be implemented t address such data needs at an ecosystem level.
Topic 2: Security and Trust
Identifying business value and business-level engagements are more important than implementing digital technologies for sustainability transitions.
Business value issues: Partners sharing data in an ecosystem or business model are providing value, they should be compensated. There is a trade-off problem to decide how much value to put and what to get in return. Research on evaluating costs and benefits of each partner and simulating the business model can help in solving this.
Blockchain and data clean rooms can support alleviating trust issues and improve data sharing.
Generating synthetic data to use for decision making is a way to get rid of data sharing concerns.
Topic 3: Measurement and Reporting
Evaluating trade-offs for sustainability is a key challenge. You may gain a lot with small investments – KPIs can help in finding such low-hanging fruits.
Benchmarking is needed to answer: how are we doing now, how can we do in the future, where should we invest our money.
Specific analysis for sustainability is needed, such as bottleneck analysis for processes, e.g., to find out where the “sustainability costs” are the highest.
It is difficult to translate regulations to KPIs: scoping what should be part of your KPI, what the regulatory aspects mean for your KPIs, and how to integrate to your current KPIs.
KPIs are usually in global level to be used in annual reports, more specification is needed.
1. What do businesses currently need to deal with the Twin Transformation (TT):
There is a need for a shift in mindset to tackle sustainability in conjunction with digital transformation goals.
There is a need for a new set of skills for people to be more prepared to tackle the challenges associated with the TT.
One of the biggest issues that hurdles this transition comes down to a poor state of alignment across management levels, which is often translated to a convoluted strategic vision; the latter does not offer clear guidelines on how the operations should be handled, what steps should be taken, or what should be measured and reported in terms of sustainable goals.
This makes the need for a framing strategy (coming from the top) more obvious, and it also marks a need for businesses to stop dealing with sustainable and digital goals in a disconnected way.
2. What can be some opportunities for the future regarding handling more effectively/efficiently the Twin Transformation?
The new CSRD Reporting Directive and the pressure coming from internal employees and customers force organizations to use technological means to become more sustainable. However, there is often a lot of uncertainty on what should be measured and reported. There is also a lot of uncertainty whether organizations have the technological, data, and architectural level of readiness to report on their level of sustainability. This brings organizations into an existential crisis. However, that can be considered as an opportunity for organizations to use that existential crisis as the means of reinvention in terms of setting up a proper architectural roadmap on how to achieve TT goals.
New awareness programs can be established that could help organizations decodify external stimuli (e.g., new reporting regulations) and set up the necessary structures internally to deal with new developments/demands.
The nature of Key Performance Indicators (KPIs) is dynamic. Indeed, already established KPIs can become obsolete based on new developments and new reporting standards. This can be considered as an opportunity for organizations to define new KPIs that would not only make them compliant to new regulations but would make them reach new levels of efficiency and sustainability.
There is also the opportunity to establish these kinds of mechanisms internally that would allow for shared responsibility across management levels. So, strategic layers can be responsible (and accountable) for mapping the strategic vision in terms of how to achieve the TT. On the other hand, the tactical and operational level would be responsible (and accountable) for realizing that vision but also provide feedback in case the strategic vision is unclear or not feasible.
There is an opportunity to establish some standardization across industries or domains and create a united front of businesses that could push the regulator to provide more clarity on reporting standards.
There is also an opportunity for organizations to start putting together integrated business models so that digital technologies can act as a cohort to achieve sustainable goals, and vice versa, sustainability (in terms of efficiency and social equity) can guide the development/adoption of new digital technologies.
Possible topics of collaboration:
Investigate the setup of collaborative structures from a multi-stakeholder perspective (e.g., municipalities, citizens, businesses, etc.) for fair and accessible distributed systems such as energy systems.