Combining Experiential Knowledge and Artificial Intelligence. The Digital Transformation of a Traditional Machine-Building Company

Abstract

The development of Industry 4.0 technologies creates leeway for the digital transformation of manufacturing companies, whose business models increasingly rely on software and data-based services. While several studies emphasise that manufacturing has no choice but to follow this transformation, there is little knowledge about how companies are actually managing it. This article uses the case study of a leading mechanical engineering company to analyse how the company organised the development of new digital technologies and how it changed its organisational structures and practices. It is based on 22 interviews and an analysis of company documents. The analysis draws on ambidexterity theory, which is extended toward a dynamic process analysis. It shows that digital transformation presupposes the development of structures and practices supporting cross-functional cooperation and the creation of new skill formation approaches. It develops a model of organisational change related to the digital transformation of manufacturing companies which includes the proof-of-concept phase, the partial exploitation phase, and the organisational transformation phase.