A blueprint for IT success

Order a new window blind from Nottingham-based manufacturer Hillarys Blinds, Britain's largest made-to-measure blinds company, and a sales advisor will arrive at your home, ready to help you choose colours and fabrics, and measure your windows. Equipped with an Android-powered Samsung Galaxy SII, he or she will then enter the order, live, into Hillarys' SAP ERP system, taking payment at the same time. "Before we went mobile, we used to have an army of people here in Nottingham opening envelopes and keying in orders. But entering them directly reduces the cycle time, cuts the error rate and delivers a faster order-to-cash process," says Julian Bond, head of information technology at Hillarys. Just as importantly, he adds, the mobile devices act as a real-time 'eye' into the marketplace, delivering powerful analytics that enable Hillarys to adjust its advertising, promotions and pricing in each of its local and regional markets around the UK. Talk to experts and there's widespread agreement that businesses like Hillarys exemplify IT strategy working as it should – complementing an overall business strategy rather than comprising a piecemeal collection of individual technologies pursued in isolation. "It's very easy to embark on a series of IT investments, but it's vital to do so within the context of what you actually want to achieve within the business," says Emile Naus, partner and technical director with supply chain consultant LCP Consulting. "The starting point has to be: what are we trying to achieve in respect of our customers and then, what does that mean for our manufacturing strategy, and our supply chain strategy?" "Strategic alignment is vital," emphasises Richard Wilding, professor of supply chain strategy at Cranfield University School of Management. "The corporate strategy defines the competitive strategy, which then defines the supply chain strategy and then the manufacturing strategy. The role of IT is to support these strategies and to support the underlying objectives that underpin them." Which isn't necessarily a message that sits easily within some IT functions, adds Hugh Williams, managing director of supply chain consultant Hughenden Consulting. "We're always being asked to help companies with software selection and the biggest problem that we find is that the IT function thinks that it knows what the supply chain and manufacturing functions want, even though these functions have never generally been asked what they want. So it's vital to actually have that discussion. And it's also important to agree a consistent set of definitions: everybody imagines that they know what words like 'planning' and forecasting' mean, but there's actually a widespread divergence in understanding." That said, some broad guidelines can help manufacturers think through some of the complexities involved in this kind of 'top down' approach to IT strategy development. For a start, it ought to be possible to quickly determine if an ERP system simply needs refreshing and extending, or if a more 'root and branch' replacement is required, says Sandeep Kumar, head of the global business consulting team at ITC Infotech. The age of the existing systems will clearly have a bearing on that decision, he points out, and so too will company considerations themselves – is the business growing quickly, for instance, or expanding into new markets? And if the core ERP is broadly satisfactory, then what strategic business purposes are to be met by any proposed extensions to it such as mobile data access? Driving operational improvements Likewise, a programme of IT investments aimed at helping to drive operational improvements will complement most business strategies, points out Carl Tomlinson, a principal practitioner at The Manufacturing Institute. "Most enterprise systems are about managing a business today," he observes. "But ensuring business excellence in the future requires a focus on continuous improvement as well. So systems targeted on identifying those opportunities for improvement – manufacturing execution systems, overall equipment effectiveness systems, and quality and yield systems, for instance – will help to advance almost any overarching supply chain strategy, manufacturing strategy, or competitive strategy." Similarly, manufacturers will want to distinguish between technology investments that add functionality and those that are largely a question of deployment, intended to reduce cost or improve performance. The cloud, for instance, can certainly deliver strategic benefits through new functionality not possible on-premises, especially in terms of greater connectivity along the supply chain. But, for many manufacturers, the choice remains one between broadly comparable offerings, offered in cloud form, or on-premise – a tactical decision rather than strategic one. That said, it's important not to underestimate the broader impact of that tactical decision. Many businesses, for instance, are finding that outsourcing IT functionality to the cloud frees-up considerable IT resource, allowing it to then be deployed on more strategic projects. So are there any technologies that more or less transcend the kind of 'top down' strategy-driven approach advocated by experts? As manufacturers survey the technology marketplace of 2015, two prospective technologies stand out. Not necessarily for instant adoption, to be sure, but certainly to be put on the radar screen for monitoring and evaluation. The first is analytics, especially analytics made more powerful, more easy to use, and more affordable thanks to the cloud. 'Self-service' reporting, for instance. Or dashboards. Or affordable 'pay as you go' drill-down business intelligence. Or even predictive analytics: what are customers likely to buy next month? Which machines most urgently need maintenance before they break down? Cloud-based business intelligence and analytics put at businesses' disposal a significant amount of computing and analytical horsepower and make it affordable thanks to 'pay as you go' subscriptions that extend not just to the servers in the cloud delivering the results, but also the underlying analytics and business intelligence software itself. The second 'must evaluate' technology is the so-called 'internet of things': the ordinary Internet, but now extended to 'things' – devices such as sensors and controls, and computers embedded into machinery. Remote access to equipment For consumers, it holds out the prospect of such things as remotely adjusting the settings of a home central heating system. For businesses, the prospect is of such things as remote access to equipment on customers' or suppliers' premises, perhaps to pursue a 'servitization'-based business model, or for predictive maintenance purposes. "Track-and-trace in particular is a huge opportunity, offering real-time access to GPS and condition monitoring sensors to items in transit," says Thomas Svenson, European senior vice-president of ThingWorx, a business recently acquired by CAD and PLM vendor PTC as part of a $300 million investment in the internet of things. "It might be the consumer applications of the internet of things that are getting the column inches in the media, but it's the business-to-business opportunity that is the greatest." As businesses survey the prospects for 2015, it's difficult to disagree.