Lectures managing digital transformation
Lecture 1: Intra-Org Socio-Technical
Digital transformation at Murano Glass: Challenges and new directions Giovanni Vaia1 and Ilan Oshri2
Murano Glass, a global leader in pharmaceutical glass packaging, faced significant challenges in its digital
transformation journey despite its legacy of innovation and growth. Spearheaded by CIO Giuseppe, initiatives
like augmented reality remote assistance and a peer-assistance dashboard aimed to enhance global operations
and communication but were hindered by resistance to change, lack of board support, and cultural barriers.
While the global pharmaceutical glass market expanded rapidly, Murano struggled to implement its digital
strategies effectively, highlighting the critical need for stronger governance, stakeholder alignment, and change
management in navigating digital transformation within a traditional industry.
Historical Background (Glass in Venice - 8th Century):
The left side reflects Murano's roots in Venice's glassmaking heritage,
tracing back to the 8th century. This artistic tradition laid the foundation for
Murano's specialization in glass manufacturing, including decorative and
utilitarian uses.
Modern Foundation and Expansion (Murano Glass - 1949):
In 1949, Giovanni Murano established the company, initially focusing on
producing glass bottles. Over the years, the company transitioned to
pharmaceutical glass products, leveraging regional expertise in glassmaking.
International Growth and Challenges (Deciding to Innovate - 2014 to 2019):
The company expanded into 9 countries with 14 plants and over 3,800 employees, becoming a leader
in pharmaceutical and healthcare glass packaging.
Challenges arose due to:
o Rapid growth and internationalization, causing communication and coordination difficulties
across dispersed teams.
o The need to integrate digital tools to improve operational efficiency, which was met with
internal resistance and management hesitancy.
Innovation Goals:
Efforts to implement digital technologies like augmented reality for remote assistance and peer-
assistance platforms aimed to unify the global workforce and improve productivity. However, budget
constraints and cultural resistance limited progress
Historical Context
Glass in Venice (8th Century): Reinforces the deep historical roots of
glassmaking in Venice, foundational to Murano Glass's expertise.
Murano Glass (1949): The company was founded, eventually evolving
into a leader in pharmaceutical glass production.
Innovation Management (2014 Onwards)
This section highlights the role and challenges faced by the Innovation Manager and the company's approach
to technological transformation:
1. Role and Activities of the Innovation Manager:
o Domain Expertise:
Focused on analyzing medical technology trends, customer behavior, and ecosystems
for new products and services.
o Collaboration with IT:
Worked closely with Giuseppe, the CIO, who provided insights on technology usage.
However, the decision-making responsibility remained with the Innovation Manager.
2. Innovation Ideas:
o Proposed a variety of technological initiatives, including:
Mobile apps
1
, Internet of Things (IoT) solutions
Social communities and web services
o These innovations required significant changes to glass cartridge production, the company’s
core business.
3. Challenges and Failures:
o The implementation faced significant roadblocks:
Production Adjustments:
1. Drastic changes to production machinery would take 2–3 years.
Regulatory Barriers:
1. Required FDA and EU regulatory approvals, taking months to
years.
Reputation Risks:
1. Fear of unforeseen problems affecting the company’s reputation
led to hesitation.
2. These challenges led to the perception that the changes were too
disruptive.
Strategic Shift:
Instead of overhauling its core production, Murano Glass attempted to innovate via a startup model, keeping
the existing operations unchanged.
Ultimately, the Innovation Manager left the company due to these persistent challenges.
Giuseppe’s Vision
Quote:
o Giuseppe, likely the Chief Information Officer (CIO), states:
"Digital technologies are changing our society and working life, and we need to use
them to change the way Murano Glass operates and competes."
o This emphasizes his belief in the transformative potential of digital
tools to maintain competitiveness and modernize operations.
Challenges Faced
1. Focus Areas for Improvement:
o Giuseppe highlights the need to focus on:
Plants: Streamlining manufacturing processes.
People: Enhancing skills and communication.
Processes: Improving efficiency across global operations.
2. Struggles:
o Despite his vision, Murano Glass struggles to achieve global efficiency:
As a multinational firm, it faces challenges like communication gaps, operational
inefficiencies, and resistance to change.
3. Decision to Focus on Process Improvements:
o Realizing the barriers to implementing large-scale innovations, the focus shifts to incremental
improvements in processes.
Slide 1: Remote Assistance with Augmented Reality
This slide outlines the introduction of augmented reality (AR) for remote assistance
at Murano Glass and the challenges encountered.
1. Problem:
o Difficulty transferring expertise from the Italian headquarters to
global plants efficiently.
o High costs and delays associated with frequent travel for resolving
machinery issues.
2. Analysis:
o An internal study revealed that:
Phone support for machinery malfunction was insufficient due to complexity.
Employees needed real-time visual and interactive guidance.
3. Solution: "Remote R":
o Initial attempt to collaborate with a company failed.
2
, o Eventually, a Canadian contractor was engaged in 2017, successfully implementing the
solution in Brazil and Mexico.
o The app allowed live interactions and embedded training through AR, enhancing problem-
solving.
4. Usage:
o While useful for addressing issues and post-sales support, adoption was disappointing:
Required changes to the assistance model, which created resistance.
Managers perceived it as a tool for micromanagement or surveillance, limiting usage.
Slide 2: Digital Dashboard for Peer-Assistance
This slide discusses another innovation project aimed at improving inter-plant
coordination and addressing operational inefficiencies.
1. Problem:
o Murano Glass faced managerial challenges due to:
Limited communication between geographically dispersed
plants.
Lack of visibility regarding plant layouts and asset
availability.
2. Solution:
o Supported a startup to develop a digital tool comprising:
SYN: A platform displaying blueprints of global plants, integrated with Google
Maps.
HERE: An app for navigating factories using augmented reality and tracking
activities with beacons.
o These tools aimed to streamline real-time peer assistance and issue tracking.
3. Challenges:
o Despite readiness, the board was hesitant and delayed implementation.
o This hesitation slowed down progress in rolling out solutions.
4. Other Projects:
o Task and Competency Mapping: Identifying expertise within the company to connect
employees with relevant skills.
o Control Platform: Machine learning-based predictive maintenance to anticipate and resolve
issues before they escalate.
Summary
Both slides reflect Murano Glass’s efforts to innovate using digital tools. While the initiatives addressed critical
operational challenges, cultural resistance, lack of alignment with managerial models, and delayed decision-
making hindered their success. The company struggled to fully embrace these tools due to internal resistance
and governance issues, emphasizing the complexities of digital transformation in traditional industries
"What was going wrong with Murano’s DT journey?"
This slide reflects on the issues Murano Glass faced during its digital transformation
(DT) journey and identifies key points of failure:
1. Minimal Adoption:
o Digital tools and initiatives introduced at Murano Glass were not
widely adopted by employees or operational teams.
2. Lack of Impact:
o Despite implementation, the innovations did not lead to
significant cost savings or better problem-solving, reducing the
perceived value of the transformation.
3. Comparison to Competitors:
o Other companies in the industry were successfully leveraging digital innovation. The slide
raises the question: Why couldn’t Murano replicate these successes?
4. Governance Concerns:
o The lack of clear governance structures for managing digital projects and allocating resources
effectively may have hindered success.
5. Disinterested Board:
3
, o The board’s reluctance to fully support or prioritize digital transformation likely stifled
momentum.
Key Takeaway: This slide highlights systemic issues in leadership, governance, and execution that stalled the
company’s progress in becoming digitally innovative.
Two managers led digital initiatives but faced challenges:
1. Innovation Manager: Focused on creating a new business model to target
diabetic customers with innovative digital products. However, these projects
disrupted existing processes and faced regulatory and operational barriers.
2. CIO: Worked on improving efficiency in plants and the headquarters
through digital tools, but adoption was low, and results were minimal.
Both efforts failed due to resistance, lack of board support, and execution challenges.
Theoretical insights...
"Business-IT Alignment as a Coevolution Process" by Amarilli et al. (2023)
This paper explains how Business-IT alignment works as a continuous process of mutual adaptation between
business needs and IT systems, rather than a one-time achievement. It shows that alignment happens when the
people, processes, and tools (social systems) and IT infrastructure, software, and databases (technical
systems) work together smoothly. Using case studies, the authors highlight key factors that help alignment, such
as strong leadership from CEOs and CIOs, clear communication between business and IT teams, structured
governance to manage IT projects, and shared understanding of business and IT goals.
The process is driven by feedback loops: top management often initiates alignment projects (top-down), while
local managers push for IT solutions that meet specific department needs (bottom-up). These can sometimes
conflict, leading to misalignment. Conflicts between top-down and bottom-up approaches occur because they
prioritize different needs. Top management focuses on aligning IT with the company’s overall strategy, aiming
for standardized, scalable solutions that work across the entire organization. In contrast, local managers
prioritize specific departmental needs, pushing for tailored solutions to solve immediate problems. These
differing priorities can lead to clashes—local solutions might not integrate well with corporate systems,
causing data silos and inefficiencies, while corporate strategies might overlook unique local requirements,
frustrating teams. This tension makes balancing global and local needs a critical challenge in Business-IT
alignment.
Challenges like resistance to change, reliance on outdated systems, or competing local and corporate priorities
make alignment an ongoing effort. The paper stresses the importance of leadership, flexible IT systems, and
constant monitoring to keep business and IT aligned in a fast-changing environment.
The slide presents a conceptual framework for Business-IT alignment as explored in
the study by Amarilli et al. (2023). Here's a simplified explanation:
Definition of Business-IT Alignment
Business-IT alignment refers to the degree of fit and integration between:
Business strategy: Goals and plans of the organization.
IT strategy: How technology supports these goals.
Business infrastructure: Organizational processes and structures.
IT infrastructure: The underlying technology and systems.
Key Features of Alignment
1. Ongoing Process:
o It’s not a one-time event but a continuous interaction and coevolution between business and
IT.
o Requires mutual adaptation and collaboration over time.
2. Strategic and Operational Levels:
o Happens at both:
4
Lecture 1: Intra-Org Socio-Technical
Digital transformation at Murano Glass: Challenges and new directions Giovanni Vaia1 and Ilan Oshri2
Murano Glass, a global leader in pharmaceutical glass packaging, faced significant challenges in its digital
transformation journey despite its legacy of innovation and growth. Spearheaded by CIO Giuseppe, initiatives
like augmented reality remote assistance and a peer-assistance dashboard aimed to enhance global operations
and communication but were hindered by resistance to change, lack of board support, and cultural barriers.
While the global pharmaceutical glass market expanded rapidly, Murano struggled to implement its digital
strategies effectively, highlighting the critical need for stronger governance, stakeholder alignment, and change
management in navigating digital transformation within a traditional industry.
Historical Background (Glass in Venice - 8th Century):
The left side reflects Murano's roots in Venice's glassmaking heritage,
tracing back to the 8th century. This artistic tradition laid the foundation for
Murano's specialization in glass manufacturing, including decorative and
utilitarian uses.
Modern Foundation and Expansion (Murano Glass - 1949):
In 1949, Giovanni Murano established the company, initially focusing on
producing glass bottles. Over the years, the company transitioned to
pharmaceutical glass products, leveraging regional expertise in glassmaking.
International Growth and Challenges (Deciding to Innovate - 2014 to 2019):
The company expanded into 9 countries with 14 plants and over 3,800 employees, becoming a leader
in pharmaceutical and healthcare glass packaging.
Challenges arose due to:
o Rapid growth and internationalization, causing communication and coordination difficulties
across dispersed teams.
o The need to integrate digital tools to improve operational efficiency, which was met with
internal resistance and management hesitancy.
Innovation Goals:
Efforts to implement digital technologies like augmented reality for remote assistance and peer-
assistance platforms aimed to unify the global workforce and improve productivity. However, budget
constraints and cultural resistance limited progress
Historical Context
Glass in Venice (8th Century): Reinforces the deep historical roots of
glassmaking in Venice, foundational to Murano Glass's expertise.
Murano Glass (1949): The company was founded, eventually evolving
into a leader in pharmaceutical glass production.
Innovation Management (2014 Onwards)
This section highlights the role and challenges faced by the Innovation Manager and the company's approach
to technological transformation:
1. Role and Activities of the Innovation Manager:
o Domain Expertise:
Focused on analyzing medical technology trends, customer behavior, and ecosystems
for new products and services.
o Collaboration with IT:
Worked closely with Giuseppe, the CIO, who provided insights on technology usage.
However, the decision-making responsibility remained with the Innovation Manager.
2. Innovation Ideas:
o Proposed a variety of technological initiatives, including:
Mobile apps
1
, Internet of Things (IoT) solutions
Social communities and web services
o These innovations required significant changes to glass cartridge production, the company’s
core business.
3. Challenges and Failures:
o The implementation faced significant roadblocks:
Production Adjustments:
1. Drastic changes to production machinery would take 2–3 years.
Regulatory Barriers:
1. Required FDA and EU regulatory approvals, taking months to
years.
Reputation Risks:
1. Fear of unforeseen problems affecting the company’s reputation
led to hesitation.
2. These challenges led to the perception that the changes were too
disruptive.
Strategic Shift:
Instead of overhauling its core production, Murano Glass attempted to innovate via a startup model, keeping
the existing operations unchanged.
Ultimately, the Innovation Manager left the company due to these persistent challenges.
Giuseppe’s Vision
Quote:
o Giuseppe, likely the Chief Information Officer (CIO), states:
"Digital technologies are changing our society and working life, and we need to use
them to change the way Murano Glass operates and competes."
o This emphasizes his belief in the transformative potential of digital
tools to maintain competitiveness and modernize operations.
Challenges Faced
1. Focus Areas for Improvement:
o Giuseppe highlights the need to focus on:
Plants: Streamlining manufacturing processes.
People: Enhancing skills and communication.
Processes: Improving efficiency across global operations.
2. Struggles:
o Despite his vision, Murano Glass struggles to achieve global efficiency:
As a multinational firm, it faces challenges like communication gaps, operational
inefficiencies, and resistance to change.
3. Decision to Focus on Process Improvements:
o Realizing the barriers to implementing large-scale innovations, the focus shifts to incremental
improvements in processes.
Slide 1: Remote Assistance with Augmented Reality
This slide outlines the introduction of augmented reality (AR) for remote assistance
at Murano Glass and the challenges encountered.
1. Problem:
o Difficulty transferring expertise from the Italian headquarters to
global plants efficiently.
o High costs and delays associated with frequent travel for resolving
machinery issues.
2. Analysis:
o An internal study revealed that:
Phone support for machinery malfunction was insufficient due to complexity.
Employees needed real-time visual and interactive guidance.
3. Solution: "Remote R":
o Initial attempt to collaborate with a company failed.
2
, o Eventually, a Canadian contractor was engaged in 2017, successfully implementing the
solution in Brazil and Mexico.
o The app allowed live interactions and embedded training through AR, enhancing problem-
solving.
4. Usage:
o While useful for addressing issues and post-sales support, adoption was disappointing:
Required changes to the assistance model, which created resistance.
Managers perceived it as a tool for micromanagement or surveillance, limiting usage.
Slide 2: Digital Dashboard for Peer-Assistance
This slide discusses another innovation project aimed at improving inter-plant
coordination and addressing operational inefficiencies.
1. Problem:
o Murano Glass faced managerial challenges due to:
Limited communication between geographically dispersed
plants.
Lack of visibility regarding plant layouts and asset
availability.
2. Solution:
o Supported a startup to develop a digital tool comprising:
SYN: A platform displaying blueprints of global plants, integrated with Google
Maps.
HERE: An app for navigating factories using augmented reality and tracking
activities with beacons.
o These tools aimed to streamline real-time peer assistance and issue tracking.
3. Challenges:
o Despite readiness, the board was hesitant and delayed implementation.
o This hesitation slowed down progress in rolling out solutions.
4. Other Projects:
o Task and Competency Mapping: Identifying expertise within the company to connect
employees with relevant skills.
o Control Platform: Machine learning-based predictive maintenance to anticipate and resolve
issues before they escalate.
Summary
Both slides reflect Murano Glass’s efforts to innovate using digital tools. While the initiatives addressed critical
operational challenges, cultural resistance, lack of alignment with managerial models, and delayed decision-
making hindered their success. The company struggled to fully embrace these tools due to internal resistance
and governance issues, emphasizing the complexities of digital transformation in traditional industries
"What was going wrong with Murano’s DT journey?"
This slide reflects on the issues Murano Glass faced during its digital transformation
(DT) journey and identifies key points of failure:
1. Minimal Adoption:
o Digital tools and initiatives introduced at Murano Glass were not
widely adopted by employees or operational teams.
2. Lack of Impact:
o Despite implementation, the innovations did not lead to
significant cost savings or better problem-solving, reducing the
perceived value of the transformation.
3. Comparison to Competitors:
o Other companies in the industry were successfully leveraging digital innovation. The slide
raises the question: Why couldn’t Murano replicate these successes?
4. Governance Concerns:
o The lack of clear governance structures for managing digital projects and allocating resources
effectively may have hindered success.
5. Disinterested Board:
3
, o The board’s reluctance to fully support or prioritize digital transformation likely stifled
momentum.
Key Takeaway: This slide highlights systemic issues in leadership, governance, and execution that stalled the
company’s progress in becoming digitally innovative.
Two managers led digital initiatives but faced challenges:
1. Innovation Manager: Focused on creating a new business model to target
diabetic customers with innovative digital products. However, these projects
disrupted existing processes and faced regulatory and operational barriers.
2. CIO: Worked on improving efficiency in plants and the headquarters
through digital tools, but adoption was low, and results were minimal.
Both efforts failed due to resistance, lack of board support, and execution challenges.
Theoretical insights...
"Business-IT Alignment as a Coevolution Process" by Amarilli et al. (2023)
This paper explains how Business-IT alignment works as a continuous process of mutual adaptation between
business needs and IT systems, rather than a one-time achievement. It shows that alignment happens when the
people, processes, and tools (social systems) and IT infrastructure, software, and databases (technical
systems) work together smoothly. Using case studies, the authors highlight key factors that help alignment, such
as strong leadership from CEOs and CIOs, clear communication between business and IT teams, structured
governance to manage IT projects, and shared understanding of business and IT goals.
The process is driven by feedback loops: top management often initiates alignment projects (top-down), while
local managers push for IT solutions that meet specific department needs (bottom-up). These can sometimes
conflict, leading to misalignment. Conflicts between top-down and bottom-up approaches occur because they
prioritize different needs. Top management focuses on aligning IT with the company’s overall strategy, aiming
for standardized, scalable solutions that work across the entire organization. In contrast, local managers
prioritize specific departmental needs, pushing for tailored solutions to solve immediate problems. These
differing priorities can lead to clashes—local solutions might not integrate well with corporate systems,
causing data silos and inefficiencies, while corporate strategies might overlook unique local requirements,
frustrating teams. This tension makes balancing global and local needs a critical challenge in Business-IT
alignment.
Challenges like resistance to change, reliance on outdated systems, or competing local and corporate priorities
make alignment an ongoing effort. The paper stresses the importance of leadership, flexible IT systems, and
constant monitoring to keep business and IT aligned in a fast-changing environment.
The slide presents a conceptual framework for Business-IT alignment as explored in
the study by Amarilli et al. (2023). Here's a simplified explanation:
Definition of Business-IT Alignment
Business-IT alignment refers to the degree of fit and integration between:
Business strategy: Goals and plans of the organization.
IT strategy: How technology supports these goals.
Business infrastructure: Organizational processes and structures.
IT infrastructure: The underlying technology and systems.
Key Features of Alignment
1. Ongoing Process:
o It’s not a one-time event but a continuous interaction and coevolution between business and
IT.
o Requires mutual adaptation and collaboration over time.
2. Strategic and Operational Levels:
o Happens at both:
4
