The Flag of Digital Transformation in the Hands of CEOs
Interview with Dr. Mehdi Shami Zanjani
(Member of the Faculty and Full Professor of the Information Technology Department at the University of Tehran, Founder and President of the Digital Transformation Institute of the University of Tehran)
In today’s world, digital transformation is recognized as one of the most important drivers for improving productivity and competitiveness across various industries. But how can this transformation be implemented in the steel industry, and what are its benefits and challenges? To explore this topic, we spoke with Dr. Mehdi Shami Zanjani, an expert in digital transformation. In this interview, we examine the role of digital technologies in the steel industry, the benefits of digital transformation, and the obstacles to its implementation. The first question is about the new structure of organizations in the age of digitalization and artificial intelligence.
A company or organization adds new capabilities through digital technologies to improve performance and gain a competitive edge. The main goal of this transformation is to build a digital organization. A digital organization is one that, through the intelligent use of modern technologies, can become more competitive in the market and optimize its operations.
When we talk about digital transformation, we are essentially referring to a fundamental change in the structure and processes of business. Organizations using digital technologies can operate faster, smarter, and more efficiently. In the steel industry, this transformation can lead to increased productivity, reduced costs, and improved sustainability.
What are the benefits of digital transformation in the steel industry?
International studies and local experiences show that digital transformation in the steel industry brings numerous benefits, which can be categorized into four main areas:
1. Productivity
One of the most significant outcomes of digital transformation is increased productivity. Digital technologies help us optimize production processes, reduce operational costs, and improve product quality. For example, the use of advanced automation and artificial intelligence can enhance Overall Equipment Effectiveness (OEE) and minimize waste. Ultimately, this results in reduced final product costs.
2. Agility
In today’s dynamic world, steel companies need to respond quickly to market changes. Digital transformation enables faster and more accurate decision-making processes, allowing companies to adapt their production to market demand with greater flexibility. The use of data mining, artificial intelligence, and machine learning can help companies better forecast market trends and dynamically adjust their strategies.
3. Sustainability
One of the main challenges in the steel industry is high energy consumption and environmental impact. Digital transformation can offer solutions in this area:
- Energy efficiency optimization
- Water consumption reduction
- Reduction in greenhouse gas and CO₂ emissions
These changes not only improve environmental performance but also enhance company profitability by lowering energy and resource costs.
4. Safety
Another key benefit of digital transformation is improved safety in industrial environments. The use of AI, robotics, and the Internet of Things Internet of Things – IoTin steel plants can reduce risks associated with working in hazardous conditions. Robots and automated systems can replace human workers in dangerous processes, minimizing workplace accidents.
What are the challenges in implementing digital transformation in the steel industry?
Despite its many benefits, digital transformation in the steel industry faces several challenges that hinder its widespread and rapid implementation:
1. Weak Digital Mindset in Leadership
One of the main challenges is the attitude of senior managers toward digital transformation. Some executives still have a traditional business outlook and resist change. However, companies with strong digital leadership have successfully navigated digital transformation. This requires leaders who are familiar with new technologies, open to change, and capable of adopting forward-looking strategies.
2. Low Digital Literacy
The lack of digital knowledge among employees and even middle managers is another barrier. To successfully implement transformation, comprehensive training programs must be introduced to raise digital awareness across the workforce.
3. Shortage of Technology Companies and Digital Startups in the Steel Industry
In many countries, tech startups collaborate with steel companies to develop digital innovations. But in Iran, the number of technology firms focusing specifically on the steel industry is very limited. This shortage creates difficulties for steel companies trying to implement digital projects.
4. Infrastructure Problems and Energy Crisis
Another obstacle is infrastructure deficiencies—especially the energy crisis. Electricity and gas shortages in Iran pose a major challenge for steel factories. While digital transformation can enhance energy efficiency, unless stable energy supply is secured, its impact will remain limited.
Another major issue for implementing digitalization in companies is sanctions and lack of access to global knowledge and cutting-edge technologies—especially those specific to the steel industry. Although efforts are being made, without proper tools and technologies, the core advantages of digital transformation cannot be achieved.
Digital transformation can solve part of these challenges. For example, by improving energy efficiency, we can optimize consumption, which leads to improved productivity in all aspects.
What is the role of artificial intelligence and data analytics in the steel industry?
Smart systems and data analytics can create value across various departments. The most important impact is generating insights from the data that exists in steel companies, helping us make better decisions. These decisions are needed in all departments—from operations to finance, HR, and IT. Wherever decisions are made, insight is required—and wherever insight is needed, data analytics and smart technologies must be applied.
Recent studies by McKinsey also emphasize that digital transformation must be CEO-led.). We say that the flag of digital transformation is in the hands of CEOs, and this responsibility cannot be delegated. This is of great importance. Therefore, it is crucial how organizational leaders, especially CEOs, act in this regard. We consider them to be the cultural models, and whatever they speak about, emphasize, and act upon, will be taken seriously by employees. Otherwise, people will think the matter is superficial and won’t treat it seriously.
Artificial intelligence and data analytics are key tools in digital transformation. These technologies can extract valuable insights from the vast amounts of data generated in steel factories.
With the help of these insights, companies can:
- Optimize production processes
- Reduce human errors
- Make faster and more accurate decisions
What is your recommendation for managers and employees in the steel industry?
To the respected managers at the beginning of their digital transformation journey, I recommend prioritizing personal development and the upskilling of their teams. Throughout history, in any form of transformation, those who moved ahead were far above the average. Therefore, unless our senior managers grow and develop themselves, they cannot lead their teams to success.
Another suggestion is not to view digital transformation idealistically. I’ve always emphasized—and international sources agree—that transformation does not begin with transformation. Digital transformation requires actual transformation. In the early days, months, and even years, we are building capability and improving systems to become qualified for larger changes. This is what we call transformation. So, we must take the first step, begin the effort, and move step by step toward the vision. Of course, the path of transformation is difficult and requires patience and persistence to reach the desired outcome.
I also suggest that senior managers turn this issue into a core conversation within their companies. A conversation means that this topic becomes a concern, especially for top executives—they talk about it, share ideas, build a vision for the future, and let the issue gradually penetrate the organization.
One final point: alongside developing roadmaps and strategic plans, do not forget to create organizational achievements in this area and define pioneer projects—projects that help develop more capabilities within the company.
We hope that Iran’s steel industry, by embracing this transformation, can elevate its position in international markets.
