We are working on our next flagship piece of research within The Conference Board Innovation & Digital Transformation Institute. This builds on the significant work of one of our earlier reports, Realizing the Full Potential of Digital Transformation: Three Areas of Focus, published mid-2020. The insights generated from this report highlighted three strategies and five practices to help business leaders overcome the gap between new technologies and how organizations can extract tangible business value from them. The resonance generated by this past report, and the continued challenges post COVID-19, have pushed us to go further and get more granular on the “HOW” of generating new value from digital opportunities in our upcoming research.

Just as we were getting ready to start the field work, John Metselaar held his Asian Innovation Council meeting, during which Ranil Vitarana from MAS Holdings issued a challenge to his peers that was a poster child for the challenges organizations face. Ranil heads innovation for MAS, a US$2 billion conglomerate headquartered in Sri Lanka that manufactures 450 million garments a year. Together, we decided to document his journey as it so illustrative of the pitfalls within our research space. This introductory piece serves 1) as insights and inspiration for business and innovation leaders as is, and 2) as an impetus, and a case study, within our research now underway, for reporting later this year. We hope you enjoy and value the story…

New digital technologies—however sexy at face value—will not yield their full potential unless accompanied by a change in the business model that facilitates them. This is what Ranil Vitarana, Chief Innovation Officer at MAS Holdings, discovered when he, with his team, pioneered a groundbreaking way of using digital printing to enable a high level of customization and dramatically cutting production and stock turnaround at the same time. The technology, he was convinced, was set to transform the garment industry.

Headquartered in Sri Lanka, MAS Holdings is a US$2 billion conglomerate with 53 facilities in 17 countries and 114,000 employees worldwide. It manufactures 450 million garments a year, and its innovation arm Twinery, headed by Ranil, is tasked with realizing innovation with impact. Under his leadership, the team has achieved a minimum of 30 percent improvement in performance and supports MAS’s aspiration to become a market leader in white space industries.

They felt they struck gold when they identified the potential of a new digital technology in flexibly and sustainably printing logos and patterns on garments during the manufacturing process. Aptly, they called this process “Prompt.ly.”

Ranil explains: “You’ve probably come across digital printing in a shopping mall, where you take a family photo and print it on a blank T-shirt. However, after a first wash it already looks faded, and after three washes it completely disappears. What we were exploring at Prompt.ly was how we can take the technology, transform it, and use it to make a difference in our core business.”

With increasing levels of confidence, they went on to develop the technology in collaboration with digital printing experts and ink manufacturers. Prompt.ly transformed the color brightness of the printing together with its durability. It allows consumers to take a photo or piece of artwork and print it so that it looks like an integral part of the fabric—at a level of quality you would enjoy from garments manufactured by market leaders like Nike or Victoria’s Secret.

But that’s not all…In addition, Prompt.ly allows same-day turnaround vs. an average industry turnaround for this kind of print on fabric of 21 to 84 days. It allows single-unit delivery vs. a conventional minimum order quantity of 10,000 units—revolutionizing production and stock inventory costs. And, last, as icing on the cake, the process uses 99 percent less water and 80 percent less energy than the traditional process.

If this doesn’t smell like a “digital transformation” opportunity, what does? MAS moved rapidly to bring the new technology to market.

Indeed, as Ranil continues his story: “You would think that potential customers would be queuing up outside our factories, wanting to be a part of this. But when we took this technology to our customers, there was no uptake. We were surprised and, frankly, totally confused. We just couldn’t figure out why—what are we missing?”

Ranil had pretty much put his career into this innovation and persisted to find out what was going on. He went on a road trip to talk to senior-level partners of his largest customers. Indeed, the solution required him to take a higher-level view of the situation. It wasn’t the technology itself that was the problem, but rather its fit with and its integration into the existing business models of MAS’s large-scale customers. Ironically, Prompt.ly was too groundbreaking to be integrated into the traditional operating systems, which were all predicated on three-month production turnarounds and longer-term stock inventory processes.

“Their systems couldn’t cope with it,” Ranil explains. “If we delivered three units directly to one store, say in Munich, while attractive on the surface, it raised back-office issues given the centralized nature of their KPIs, remuneration, and stock management systems. How would they pay for it? How would they know it had been delivered? Their costing model, their activity systems and procedures couldn’t cope.” They lacked the agility to adopt and embrace the new opportunity, however enticing at face value.

This organizational rigidity and systemic lethargy led Ranil to pivot and start collaboration with an established start-up, an online US lingerie company called Adore Me.

Ranil concludes: “They asked that we underwrite Prompt.ly’s costs and install the technology in their distribution centre, and they would explore with us whether the system was feasible. We duly did this and had some of our production experts based there for three months. A parallel collaboration to design a new software for maximum cost-effectiveness was also introduced. Together, this ecosystem led to an approach where a designer in New York places the print of choice exactly where you want it, it is processed in Sri Lanka, distributed in Mexico, and delivered to someone in Ohio.”

Today, MAS continues to work with Adore Me to hone the business model, but the lesson of this experience by MAS’s Twinery is well learned. Digitalization opportunities of the kind that Prompt.ly represents, however incredibly attractive they appear, are not easily turned into new innovations that create new value. They are likely to hit the wall of rigid realities of existing operating systems and procedures and wither if not supported by the passion and dogged persistence of an innovation leader such as Ranil Vitarana.

To unleash the full potential of new digital technologies and capabilities, it is not enough to develop the technology; you also have to redesign the system it will overturn. It requires a deft hand and a holistic look at the systems favored by the company, customers, and other stakeholders in an ecosystems partnership. This collaboration has the potential to create new business model innovation behind a transformed, integrated solution.

Hopefully Prompt.ly continues to transform pivotal elements of the garment industry: quality, agility, speed, less waste, less energy, and less water consumption.