Enterprise Integration as a Driving Factor for Guiding Digitalization in a Manufacturing Small and Medium Enterprise

Abstract

In the face of rapid technological advancements and evolving consumer demands, businesses increasingly turn to digitalization to remain competitive and redefine industry standards. This article delves into the crucial role of enterprise integration within the context of digital transformation, with a specific focus on manufacturing Small and Medium Enterprises (SMEs). Based on fieldwork within the Innovation Factory North project in Denmark, the study presents a three-dimensional framework – architecture, capabilities, and governance – that is instrumental in guiding manufacturing SMEs through the complexities of digitalization. The architecture dimension explores the dichotomy between monolithic and fog (edge) architectures, highlighting their respective merits and challenges. The capabilities dimension introduces the concept of operational capability stacking, demonstrating how specific information systems, when integrated, yield new capabilities. A list of common capabilities in manufacturing enterprises is provided, offering inspiration for manufacturing SMEs to enhance their operational efficiency. The governance dimension injects a strategic dimension into the digitalization process, emphasizing the need for a balanced approach between technology-driven and process-driven optimization methodologies. The research underscores the strategic nature of digitalization in manufacturing SMEs, recognizing the interconnectedness of architecture, capabilities, and governance in achieving sustained success in the digital landscape. The proposed three-dimensional framework is substantiated through real-world applications within Denmark’s Innovation Factory North project, providing tangible insights and scenarios to navigate the intricacies of the digital landscape effectively.