Understanding Digital Transformation Challenges: Evidence from Brazilian and British Manufacturers

The implementation of digital projects and practices by large manufacturing companies is hindered by many technical and non-technical challenges, whether they are in developed or emerging economies. The purpose of this work is to discuss the challenges faced by large Brazilian and British firms to implement smart factories. A qualitative research approach was applied in 9 case studies – 5 Brazilian and 4 British companies from the automotive, electro-electronic and telecommunications sectors. The data collection instruments, once validated by experts, included semi-structured interviews, and non-participating observations, followed by content analysis. All challenges for digitalization were identified, mapped, and organized in clusters: technological, managerial, social, and macro-environmental. Several practices to overcome the digitalization obstacles were identified, such as: 1. clearly communicate the digital strategy and focus the efforts on people to develop a digital mindset; 2. motivate the workforce to engage with external partners to create a sense of urgency for digital change; 3. innovate quickly, gradually, and humbly, which motivates intra- and inter-collaborations. Thriving in this context requires incremental and disruptive changes that challenge corporate mindsets, undo organizational boundaries, and impact the use of legacy systems. Depending on how the company manages these challenges, they can facilitate or hinder its ability to establish collaborative practices for innovation purposes. This research contributes to a better understanding of how barriers for digital transformation inside and outside the firm influence practitioners and policymakers.