In our previous blog, we introduced the Smart Industry Readiness Index (SIRI) framework, the industry standard for digital maturity assessments. We mostly focused on a high-level overview and how we handle our vendor-agnostic SIRI assessments. We deliberately avoided going into too much detail of the framework’s calculations, but we will take a closer look in this dedicated blog post. Join us for an explanation of the SIRI framework’s pillars and dimension, its TIER calculation, the four archetypes of transformation, and how all of them are connected.
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The three pillars and sixteen dimensions of the SIRI framework

At its core, the SIRI framework is based on three building blocks or pillars of Industry 4.0: processes, technology, and organisation. Each of these building blocks in turn represents multiple dimensions of a successful digital transformation. This comprehensive approach helps to correctly address the complexity of transformation journeys.

Technology is the cornerstone of every major industrial revolution, and the fourth revolution is no different. Innovative technologies make it possible for businesses to automate production processes, create new products and services, and respond quickly to changes in customer demand. The technology pillar looks at three aspects (automation, connectivity, and intelligence) on three levels of production (shop floor, enterprise, and facility), resulting in nine dimensions.

To correctly use these technologies and ensure that they add value, organisations also need to look at the processes behind them. In Industry 4.0, process improvement requires looking beyond individual processes and considering their integrations. The process pillar consists of three dimensions: vertical integration (operations), horizontal integration (supply chain), and an integrated product lifecycle.

Of course, innovative technologies and improved processes need people to work. To take advantage of the opportunities offered by Industry 4.0, businesses need to be well-organized and structured. This means having a clear vision for the future, and being able to execute that vision effectively. It also means having the right people in the right places, with the necessary skills and knowledge to bring about change.

The organisation pillar divides these requirements in two parts, each with two dimensions. The talent readiness aspect looks at the people that make up an organisation by evaluating workforce learning and development and leadership competency. The structure and management aspect examines the institutions that govern how a company works through inter- and intra-company collaboration and its strategy and governance.
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Maturity calculation and the TIER system

To assess the digital maturity of an organisation, the SIRI framework scores organisations on a scale of zero to five in each of its sixteen dimensions. However, as we mentioned in our other blog, it’s important to note that a score of five should not always be the goal. Some industries have not yet reached a maturity where scoring the highest number is possible on the majority of the dimensions, let alone on every single dimension. Instead, four prioritised dimensions will be defined according to an organisation’s specific situation.

That’s where the TIER calculation comes in. The TIER system is used to calculate an organisation’s priorities with a set formula that considers four aspects of a prioritisation matrix:

1. Today’s state: as with all big changes, organisations need to start at the beginning. This represents the current assessment of the 16 dimensions. To get a correct view of the current status, most SIRI assessors (including Coretecs) will also insist on a factory visit.
   

2. Impact to your bottom line: a large part of assessing the impact of different dimensions is to examine their effect on an organisation’s profits. For confidentiality reasons, these are often represented in relative figures and generic cost categories. For example, companies can report that labour costs account for 8% of their total annual budget.
   

3. Essential business objectives: another important part of defining priorities is determining which objectives are most crucial to an organisation. This typically involves organisations choosing five key KPIs from a list that correlates with the sixteen dimensions of digital transformation.
   

4. Relative position to the best-in-class: most organisations will determine their priorities at least in part by comparing themselves to the top performers in their industry and highlighting the areas with the biggest gaps in digital maturity.

The outcome of those TIER calculations is a total impact value. To determine which four dimensions should be prioritised, the SIRI framework selects the dimensions with the highest overall impact value, followed by the highest value of each pillar. This spread ensures that companies do not rely solely on technologies, processes or organisational structures when devising or fine-tuning their digital transformation strategy.
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The four archetypes of transformation

We already mentioned the importance of industry specifics when discussing the SIRI scoring system above. To provide a more striking mental image, the SIRI framework divides industries into one of four archetypes that resemble landscapes: rainforest, coniferous forest, savannah, and tundra. The archetypes are based on two axes that form a graph when combined. The SIRI maturity represents the average maturity score for an industry, and the SIRI variance reflects the difference between the best-in-class organisations (top 10%) and bottom performers (bottom 10%).

The rainforest archetype describes industries with a high SIRI maturity and high SIRI variance. Most of the organisations in these industries are already quite advanced in their digital transformation journeys, but a few companies have been left behind. This includes industries such as electronics, semiconductors, downstream energy and chemicals, and logistics.

The coniferous forest is representative of industries with high SIRI maturity and low SIRI variance. These companies are generally ahead of their peers in other industries when comparing their digital maturity, and they progress at a similar rate to others in their industry. Examples of these industries include pharmaceuticals, medical technology, and the automotive and aerospace industries.

The savannah represents industries with low SIRI maturity and high SIRI variance. Most companies in these industries are still in the early stages of their digital transformation journeys. However, some of them have already progressed significantly further than their competitors. The main example here is the upstream oil and gas industry.

Finally, the tundra archetype symbolises industries with low SIRI maturity and low SIRI variance. Companies in these industries typically struggle to increase their digital maturity and might get stuck on their transformation journeys. Common causes include the size of a company and the nature of their manufacturing process and its products. Examples of these inhibiting factors include machinery and equipment, food and beverage, precision parts, and the textile and clothing industries.
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Conclusion

If there is one thing that should be clear, it’s that the SIRI assessment framework is built as a holistic approach from the ground up. It examines sixteen dimensions across three pillars to make sure that no aspect of digital transformation is left behind. The framework also expands its assessment scores with other strategic and budgetary concerns through the TIER calculation to arrive at a total impact value. To make sure that everyone is on the same page, industries are represented as one of four archetypes that resemble the nature of their competitive environment.

It's precisely this holistic, interconnected approach that made us choose the SIRI framework in the first place. While it may seem daunting at first, the clear structure and emphasis on stakeholder feedback mean that SIRI assessments generally take a lot less time compared to other digital maturity frameworks.