So, what next?

So, what's it to be? As we rush headlong towards 2013, the next issue for all of us – apart from a swift pat on the back for making it through 2012 – has to be, what next? And, specifically, what should we be considering for our IT estates, in view of proposed or likely developments to our businesses over the next couple of years? How can we prioritise, and indeed manage, what's bound to be a fairly long wish list? Projects up for discussion must surely include: system upgrades and/or migration; embracing cloud computing; and additional modules, such as CRM (customer relationship management), APS (advanced planning and scheduling) and mobile systems – the latter both for business and shopfloor operations. Then there are: big data and how that links into analytics; self-service business intelligence itself; supply chain integration; manufacturing execution systems; and managed services/outsourcing. And finally, at the IT infrastructure and compliance levels, there are issues such as virtualisation, integrated communications, software licence management, project management tools, etc – although probably not Microsoft Windows 8. It's a lot to consider, but it's not easy to make a good case for immediately discounting any item. Even more so, given the potentially game-changing capabilities of the most recent system and service iterations. Shrewd operators would counsel that, even if a quick review demonstrates you're in the right place, it's always worth that sanity check. We all know things change in business and, just sometimes, decisions and actions that have system implications don't get conveyed to those to whom they matter most. For example, system updates and/or migrations: the plain fact is that, if your ERP system is on ageing technology (more than, say, seven years old), it's unlikely to be based on a service orientated architecture (SOA). At the very least, that means you won't be able to take advantage of web services that now commonly allow information to flow very efficiently both between and within businesses. And that may well matter a great deal very soon. As Christine Hansen, product marketing manager with Epicor, puts it: "With modern SOA-based ERP systems, business processes can be very granular and flexible in construction, with fast, efficient workflow between them, enabled by web services. So, whether it's to a laptop or mobile device, or just a string of data from a customer or supplier, you have openness and automation of information exchange... A lot of customers and supply chains are now demanding these kinds of facilities." The obvious question, then: how does your ERP system measure up? Are you likely to be able to meet business requirements, or is its underlying technology already a barrier to what will soon become essential change? What about cloud – software and data delivered via the web? The case for buying into cloud, or managed services for that matter, is clear. Software as a service (SaaS) overcomes the usual IT and budget barriers – moving costs largely out of capex and into an entirely predictable opex, while also enabling manufacturers to get resilient and properly managed software that can also be quickly deployed, and scaled up – and down. Karen Conneely, marketing manager for Real Asset Management, which offers asset management systems in the cloud, puts it thus: "Cloud-based software doesn't involve large, up-front licensing costs or internal IT overheads... The model can provide unprecedented, low-cost entry to highly functional software that can transform performance. [It can] ensure that today's mobile workforces have full, real-time access to asset maintenance information, enabling them to reduce failure rates and improve equipment up time." And much the same can apply to practically any suite of manufacturing and/or business software. However, the case for moving existing systems 'off premise' is much less obvious – unless you're about to embark on a significant migration or upgrade and/or your IT infrastructure is in need of a major refresh. That's why the likes of Adrian Simpson, chief innovation officer at SAP, make the point that, for the foreseeable future, most manufacturers are likely to need systems that can support an integrated, hybrid approach, with existing good functionality left where it is, but tired or new capabilities moved to the cloud – and each able to interact seamlessly with the other. So what should you consider for cloud computing? For Simpson, given the remaining – probably perverse – perception that cloud presents risks as well as cost and compliance benefits, it's all about criticality of the data. That might be transactional, but there's also IP to consider (are you worried about data theft from a third-party data centre?). As for the former, Simpson advises: "If you believe that failover in your own landscape is better than cloud-based services can offer, then you either don't do it or you mitigate the risk. Clearly, if HR is down for a couple of hours, the business can carry on, so that would be easier to push onto the cloud than, say, your production systems." And SAP industry principal John Hamman adds that it's worth looking at the suitability, as well as the sophistication and resynchronisation facilities of potential cloud candidates, if the broadband infrastructure lets you down. "S&OP is very well suited to cloud provision and so are web-based B2B supply chain systems, such as our Supplier InfoNet, that use internal and external data from many parties." Best advice: if you're a start-up or an existing organisation moving into a new market or needing new functionality, then going via the cloud offers serious advantages. Choose wisely, and you can move back on-premise later, should you wish to. Steve Tattum, Sage ERP X3 product manager, speaks for many of the mainline ERP firms when he says: "There's no 'one cloud fits all' solution, which is why our strategy is to offer a choice of pure-play, hybrid and private cloud solutions." Worth asking a few pointed questions. Moving on to additional modules, while the cost-benefits of BI (business intelligence), CRM, APS and many of the other former ERP add-ons are now very well known, mobile systems are less so. But these are now shooting up the business agenda – and not just for salespeople on the road. Why? As SAP's Simpson says, because modern mobility is capable of providing two-way, real-time communications to much more of the manufacturing value chain than that. "Done properly, mobility can cover anything from operations to asset management – even health and safety – providing instant insight into things that are happening on and around the shopfloor, for example. It's not just data and alarms, either: you can include pictures of what's happening, too." The same applies to supply chain and field service operations, with mobile devices being driven interactively by people who need web-delivered content, covering, for instance, procedures, 3D graphics and video to effect machine repairs – whether in the production hall or at a customer's premises. It's not difficult to see how similar technology could be harnessed for both cataloguing and directing continuous improvement, too. "Mobility can open up production transparency," comments Simpson. "Engineers can look at defects and resolve problems, collaborating with others, wherever they are. When you have visibility and knowledge, you can take action faster, minimise downtime and improve much more quickly and sustainably, in ways that weren't apparent before." Hence the rise of companies such as mobile SCADA software firm Schad. It's impossible to argue with managing director James Hannay's logic: "One-way alarm messaging systems have been on the market for a long time. But now, instead of having to go to HMIs at fixed locations to see the detail, then walking back and forth [to problem machines], you get access to the full system in real time, with information provided on your mobile device, wherever you need it." Much the same applies to analytics: making business information available on the move means the potential to understand the detail and implications of issues anywhere, any time. And another point: as Epicor's Hansen says, users increasingly expect employers to provide the kinds of mobile facilities they have in their private lives. "If you want to attract and keep good talent, you need to offer professional systems, and today that includes mobility." But again, there is no 'one size fits all'. Sage's Tattum hits the nail on the head: "For manufacturers to obtain real value from mobile technologies, they must first invest time to question exactly where [they] can add value to the business, which devices are most appropriate for the job and which can deliver best ROI... Managing organisational change to increase utilisation rates will also become more important." Next, what about so-called 'big data'? The offering currently in vogue is, quite simply, a system capable of quickly aggregating and handling huge datasets. SAP calls it in-memory computing and brandishes its SAP HANA software appliance. Perhaps the most obvious beneficiaries are business, market and product analysts in large organisations, all of whom can use such systems to see patterns otherwise very difficult to discern – and hence make better business decisions faster. However, Simpson suggests that work is now being done around, for example, predictive maintenance, equipment effectiveness, even energy management. The point: being able to deal with very large quantities of data from multiple sources can deliver powerful new insights. "It's early days, but with machines talking to machines, you can gather and sift large amounts of data from many systems and look for refined information about when, say, part of a factory is likely to go down," explains Simpson. "Then you would be able to adjust production rates and schedule maintenance or repair, depending on aspects such as quality of goods, orders outstanding, stocks, etc. You could also use the system to make a business case for replacing certain equipment. Again, it's all about being able to make better decisions." One to watch, then. That said, let's tackle supply chain integration. And the principal points here are essentially binary: enabling your business to participate in the now massively important web-based B2B economy, and mitigating supply chain risks in an increasingly just-in-time and unpredictable real world. Both issues are about ensuring that your systems can exchange information – ASNs [advance shipping notes], call-offs, etc – electronically with suppliers (known and as yet unknown), irrespective of their size, technology and geography. If they can't – and given that this is not a trivial undertaking – it's probably time to look to one of the B2B integration and hosting services specialists, such as Wesupply or GXS. As Mark Morley, industry marketing director for manufacturing at GXS, says: "For this to work, companies need a highly available, flexible and scalable B2B platform so that information can be exchanged accurately and in a timely fashion, whatever the data protocols used by suppliers and customers... We handle that whole requirement through the cloud – in our case, with Trading Grid. It's all about connecting and streamlining supply chains." Before closing, it's worth remembering those who will have to deliver your chosen systems. Because, from the IT manager's (or director's) perspective, this is about managing increasingly complexity, usually with fewer resources. So, a word from Chas Parker, head of IT at automotive body-in-white manufacturer Stadco, who urges companies to choose project management tools carefully. "In previous lives, I've used quite a lot of the bigger project management tools, but the problem with many is that you spend all your time feeding information in, rather than managing the project... PM3 [from Bestoutcome] is extremely elegant and easy to use, but it's also functionally rich. It's structured around project outcomes and benefits, rather than task management [which] is precisely what my senior management team want." The final word, though, goes to Sage's Tattum: "Investment in technology provides an opportunity for firms to review their business processes and performance. It's as important for businesses to focus on measuring utilisation rates and cultural adoption of an IT solution as it is to assess traditional metrics around implementation and delivery." To read the report in full, download below PDF.