How best to start exploiting the vast amounts of data made available by new technologies such as Big Data and the Internet of Things? Or the latest advances in robotics, additive manufacturing, cloud services, and machine-to-machine communication with equipment on the factory floor?
Ask Cathie Hall, managing director of ERP provider K3 Syspro, and you might expect her to take a product-centric viewpoint. In terms of Big Data and the Internet of Things, for instance, an obvious starting point might be to recommend her company’s DataSwitch module, a vendor-agnostic system integration and data manipulation tool.
But no – far from it. DataSwitch has a role to play, to be sure, but that role, she insists, is towards the end of a series of much more fundamental activities. Likewise, she adds, with any number of other K3 Syspro products as well: Syspro Analytics, Syspro Reporting Services, or integration tool Syspro e.Net Solutions. Useful though each is, they are not starting point.
“There are a lot of exciting developments around new technologies at the moment,” she acknowledges. “Not just Big Data and the Internet of Things, but also additive manufacturing, robotics, cloud services, and predictive analytics. But there’s no point in focusing on these technologies and then going and looking for a use case for them. Or, for that matter, to start by looking at the software tools necessary to exploit them.”
Instead, she argues, businesses need to take a much more considered view of such technologies, viewing them from within the context of the overall business’s business strategy.
“You have to start with the business strategy,” insists Hall. “To start anywhere else is to run the risk of starting from the wrong premise. The overall business strategy should determine the priorities of the business. This then dictates the IT strategy that will deliver the resources and capabilities to fulfil the business strategy. And finally, you then need to think about the expertise required to do what the IT strategy is calling for – is it available internally within the organisation, or does it have to come from elsewhere?”
Consider a business where competitors are faster at bringing new products to market. The business strategy would be to redress that, which in turn calls for an IT strategy that focuses, say, on additive manufacturing, tighter digitally-enabled links with suppliers, and perhaps using the Internet of Things to achieve greater insight into actual product usage in the field.
Or, alternatively, consider a business, such as an equipment manufacturer, recognising that it needs to grow its sales revenues, and perhaps move into higher-margin markets at the same time. The Internet of Things opens up two possibilities – first, aftersales maintenance, with equipment ‘calling home’ to indicate servicing requirements; and second, a servitisation-based business model, with equipment being hired on a ‘per use’ basis, rather than bought outright by customers.
In terms of the overall landscape of the new technologies that are now reshaping manufacturers’ art of the possible – Big Data, the Internet of Things, additive manufacturing and predictive analytics, for instance – all of these various technologies have the ability to reduce product cost, improve quality or achieve great product differentiation, but the business strategy must determine what is delivered, says Hall.
More than that, she argues, there’s a bigger danger than just that of a poorly chosen IT initiative delivering capabilities that aren’t really central to the overall business’s strategy. For there’s also the opportunity cost to take into account, as well.
“In any business, IT resource is finite and usually scarcer than the business would wish,” she points out. “So if a decision has been taken to see if there’s anything of value in, say, Big Data, that ties up resource that could be tackling genuinely more valuable opportunities, such as additive manufacturing, or the Internet of Things, or robotics. It can’t be stressed enough that it’s really, really important to consider IT initiatives, and IT strategy, in the context of the business, and the overall business strategy.”
Likewise, adds Hall, it’s usually a mistake to think that it will be a straightforward matter for individuals within the business to easily spot the relevance that particular technologies may have for the overall business strategy and the – hopefully complementary – IT strategy. Or, for that matter, be then able to go on and successfully implement those technologies, delivering appropriate solutions on time, and on budget.
And even more fundamentally, she points out, once delivered, a new technology still needs to be successfully made use of, which requires the people using it to be both familiar with the business strategy that it is addressing, as well as be capable of making appropriate decisions in light of the added value that the technology in question is providing. So competence is important, as is the culture of the organisation.
Roll it all together, in short, and it’s not surprising that so few technology initiatives succeed in fully delivering on their promise.
“The starting point is wrong, there’s no explicit link to the business strategy, the IT and the business strategy don’t correctly dovetail, and the organisation lacks the required skills and expertise – get any one of these wrong, and a technology initiative will be in trouble,” sums up Hall. “Get two or more wrong, and success is seriously compromised.”
So how can businesses avoid these dangers? The basic rules aren’t rocket science, it turns out.
“First, have a clear business strategy, and one that is expressed in ways that make it straightforward to link to IT,” says Hall. “So something woolly, such as ‘Be the best’, won’t do. Instead, have clear goals, ideally with targets and timescales.
“Second, make sure that each part of the strategy has a corresponding link to the IT strategy, so you can be sure that what you spend on IT maximises the value to the business in terms of delivering on the business strategy.”
“Third, be open to what new technologies can offer, and how they can help further the IT strategy and the business strategy. So stay close to your IT suppliers, read widely, and actively look for best practice to emulate. But remember: the idea is education, not implementation—unless and until there’s a clear strategic imperative.”
“Fourth, and finally, make sure you’ve got organisational alignment, or at the very least, a way of buying-in the expertise that you need for technology delivery, if you don’t have that expertise in-house. Likewise, you’ll need to be able to capitalise on it, once implemented. Big Data, for instance, won’t deliver if no one has the vision to see what can be done with it, and neither will any other initiative.”
Get all this right, though, and considerable success beckons.
“Make no mistake: these new technologies are game-changers,” sums up Hall. “But you have to have a game plan for exploiting them. Don’t leave it to chance.”
