Let’s start with a definition. For us, digital transformation means using IT and technology to dramatically change your business for the better.
That may mean a custom or bespoke software product. Or it may mean integrating your systems on the back end, or a complete overhaul of your IT systems and suppliers. Whatever the tech issues, it means focusing on your customers, your market, and your risks. Every choice is to ensure that the internal operation of your company is not limiting its growth.
Another important point is that the transformation is individual to your company. There is no one-size-fits-all solution, and anyone telling you so is after your wallet.
That doesn’t mean we won’t see big changes in the next few years. Again and again we’ve watched as what used to seem like extraordinary technologies—such as voice recognition, complex mapping and routing, and software robots—quietly become a part of the everyday life of a mid-market company.
Similarly, though the excitement about drone deliveries and artificial intelligence seems to have faded, we still think they’re coming. Whenever I see such innovations being tested, I think they’re important guides to what will gradually come to our sector, the mid-market.
How the Pandemic Transformed Digital Transformation
Before we get into what’s coming, it’s useful to look back. The pandemic changed digital transformation in two fundamental ways.
First, everything went online, and faster than we had thought possible. Everyone now expects online sales, service, and support. Business and domestic consumers rapidly adopted online channels for finding and buying a wide range of products and services. This also extended to after-sales and re-ordering, which are online now in a way that seemed unlikely in 2019.
Similarly, paper is on its way out. Cash has been side-lined by electronic payment. Printed brochures and catalogues have disappeared from many sectors. (In fact, if your business is still reliant on paper, that would be the place to start a digital transformation of your company. More ideas here.).
Second, we saw a rapid shift to remote work. Not that it was a simple process: we saw business struggle when their systems and processes were badly integrated and ill-defined. But everyone, whether they liked it or not, quickly got used to collaborating online.
In every situation above, old-fashioned managers were saying, “It will never work.” Which leads me to conclude that often digital transformation is driven by attitude rather than what is technically possible. And attitudes have changed irreversibly.
What’s Coming to the Mid-Market
In the near future, for many mid-market businesses the next phase of digital transformation will focus on the following:
Data, data, data. It’s never been easier to accumulate data. Companies will leverage these new assets for smarter use by humans and AI. Combining data from different sources is now far easier, and cloud-based processing allows for rapid insights that would have been unthinkable even quite recently. The businesses that adopt data visualisation technologies, simple machine learning, and process automation will have a competitive advantage.
External integration. Internal integration and adoption of the cloud should be in the rear-view mirror. (If that doesn’t describe your situation, that’s the first step to transforming your company.) Businesses should only select tech products that support integration and should gravitate towards suppliers, customers, and partners who form integrated communities. Because integrated communities will out-perform those that are not.
Points of difference. As cutting-edge technology becomes more widely available, companies will have to work harder to distinguish themselves by their actual product or service. Their brand really must mean something, and they really do need a competitive edge. For example, now any company can stream movies like Netflix; Disney+ has surged ahead on the strength of its content.
Environmental, social, and governance concerns. Both regulators and consumers will insist upon more transparency when it comes to data use and environmental sustainability. Traceability of products, optimisation of materials and energy consumption, privacy, security, and justifiable decision-making will all become part of the digital transformation agenda.
Virtual currency. Products and services will be increasingly virtual and paid for with virtual currency. It remains to be seen which form of digital currency will prevail. But mid-market companies need to tune into this accelerating change and invest in new types of virtual storefronts and virtual branding. Though I hate to use the term, this is the metaverse.
What Hasn’t Changed—and Likely Never Will?
Most mid-market businesses are deeply concerned about supply chain issues, recruitment, and energy costs. New technologies—and the judicious application of existing solutions—can ease all these issues, but only if you successfully meet human needs at the same time.
Zoom and shared docs are no substitute for real face-to-face collaboration. You cannot have a real creative discussion, shift entrenched opinions, or lift someone’s spirits online. Digital transformation can drive everyday productivity. But for most people, an enjoyable job also means human contact.
Most people also want their company to have a vision beyond profit. They want to draw more from their work than just their salary. Digital transformation can absolutely make a difference in a mid-market business—but only when you include the human factor.
No matter what your sector or the size of your business, a digital transformation won’t take unless your staff feel included and valued.
With all that in mind, now it’s time to think about your company. If you redo your IT and technology with a magic wand, how would you do things differently? What barriers to growth would you remove?
For more guidance on digital transformation, see our free, plain-English guides here. And for a no-strings, no-pressure conversation about the digital transformation opportunities within your own business, get in touch.
The Future of Manufacturing Part 3: Getting Data Right
In previous installments of this series, we discussed the key trends in the future of manufacturing and provided a checklist for new ERP and MRP projects. Now we need to talk about a critical commercial issue for any manufacturing business: getting the data right.
We meet many manufacturing CEOs who are frustrated that, despite spending huge sums on new systems, they lack visibility of the true cost of production, have higher than expected waste, and have no clear view of inventory.
New systems like IFS, Nav, AX or Dynamics 365, SAP, Sage, Epicor, Oracle or Syspro can cost big money. But if the project fails to deliver, often the root cause is that the master data is wrong. The system may be fine (though often it isn’t!), but if the data is wrong then everything is built on sand.
Poor master data confuses everything, embedding waste, errors and poor service throughout the organization. For example, product costings, bills of material, recipes, or routings, may have not been set up correctly in the first place or may have become out of date.
We’ve frequently seen examples of businesses where the same customers, finished goods (FGs) or raw materials (RMs) are entered multiple times, but called different things, creating all kinds of confusion. The bigger and more widely distributed the company, the more possible this can happen.
These issues usually result in reports that are wrong or time-consuming to fix. Staff costs increase, especially for the finance team, who may have to clear up the mess in Excel.
Procurement may over-order to create safety stocks, tying up cash; sales can’t accurately forecast delivery dates. Eager salespeople may “borrow” items from different orders to fulfill today’s priority, creating more problems down the line. Inventory turn is lower than planned and OTIF targets get missed.
Customers are disappointed by long lead-times or upset by incorrect, incomplete, or late delivery. Labels or documents may be wrong, which is inconvenient at best and, at worst, can have legal or safety implications.
On the other hand, well-structured manufacturing data provides insights to senior managers, allowing them to answer important questions:
Who are our most profitable customers?
What are our least profitable products?
Which processes require the most rework?
Well-structured data also allows for accurate real-time data, empowering supervisors to organize work within defined boundaries.
Fundamentally, poor data can make it hard to take advantage of efficiencies of scale. You can roll out new systems, but the problems will remain. And a growing business becomes less profitable rather than more profitable.
So then, how does a mid-market manufacturing business get data right?
If you’d like to talk about your manufacturing challenges, Get in touch
1. Instill strong leadership and ownership.
Data is difficult and detailed. And let’s be honest: it’s not very interesting. Solution vendors are contracted to deliver technology, so they don’t really care about the data.
Everyone’s too busy doing their day job, so it may get left to the Finance or IT teams to work out data problems, and they may not have the knowledge to fix issues or the authority to get people to change bad habits.
But data has strategic implications, so an executive must take ownership. And whoever takes charge of the data needs to have time to get to the bottom of the issues, experience in this kind of work, and authority to make decisions and get things done.
Production and business teams will have to be involved as well, taking responsibility to help get the data right and keep it that way. And since data quality is an ongoing exercise, the senior team must receive reports at regular meetings.
2. Identify the problems and their solutions.
It may seem obvious, but it’s often overlooked: data quality issues will keep reoccurring, even snowballing if you don’t find the root causes and create solutions.
One place to start is to look for who is supposed to be in charge of data quality – if anyone. Data problems often reflect process problems or a lack of alignment between people and departments.
It may not be clear internally who is responsible for what, for updating data as things change, or for correcting data when errors are found.
Perhaps data quality falls to some very overstretched, helpful people who may be vital but have a very low profile. Or there may be no-one who has the time to manage data quality.
Using multiple systems without proper integration is another common cause of poor data quality. Sales, finance and production teams’ reports simply won’t agree if they are working from different base information. Fixing the problem may require process changes, technology changes and some retraining (or even “redeployment” if the real issue is particular people!).
There may be good reasons for using multiple systems: for example, specialist warehouse management solutions that work with advanced technology such as voice- or sight-picking, which isn’t supported by a basic ERP platform.
But with separate systems, there must be clarity as to which system owns what data (e.g. ERP owns stock quantities, WHM owns stock location) and the interfaces need to be tested and working.
3. Make rational decisions about when to solve problems.
Data issues often arise because time and commercial pressures make shortcuts necessary. Getting data right may be a matter of diminishing returns, as obscure problems can be very difficult and time-consuming to fix, and they may just not be worth it!
The most important thing is to make rational decisions about your data. List the data problems, estimate the necessary effort for solving each of them, and the business impact.
If short-term pressures mean that a problem won’t be fixed now, then perhaps it’s on the list for next month. In the meantime, monitor its impact. It may make sense to tolerate a problem for now. It will never make sense to sweep it under the rug.
Even poor systems can work effectively if the data is structured, maintained, and policed. Most importantly, this is a good platform for system improvements: maintaining data quality can eliminate a whole range of problems and inefficiencies, can boost profitability, and can give everyone new energy as less time is wasted on distractions and snags.
The Future of Manufacturing Part 2: C-Suite Checklist for Successful MRP/ERP Projects
Our previous installment on the future of manufacturing discussed the main trends and their effects on mid-market businesses.
In this installment, we discuss something of direct importance to mid-market manufacturers: Material Requirements Planning systems (MRPs), which help manage manufacturing processes, and Enterprise Resource Planning systems (ERPs), which integrate your main businesses processes.
More specifically, how to ensure you get them right.
A manufacturing company’s internal efficiency and effectiveness are highly reliant on sound MRP or ERP systems. But all too often we meet CEOs whose systems just tie them in knots, add cost, and hamper customer service. These systems become a brake on expansion and growth.
Large systems projects are expensive exercises. And yet the results are often disappointing and rarely meet their business objectives. And then you are stuck with them: MRP or ERP systems generally have a lifetime of seven years or more. Get it wrong, and you can repent at leisure!
How can you avoid this?
This checklist provides some key pointers. It can be a useful review even if you’re halfway through, or a primer if you’re about to start.
If you’d like to talk about your manufacturing challenges, Get in touch
1. Get the business objectives clear.
Has there been an open workshop in the boardroom to agree on the basic business objectives? The objective isn’t to implement a new MRP or ERP, it’s to deliver specific business outcomes…what are they? Has everyone agreed on them?
Be specific. For example, an objective may be to halve the manufacturing cycle/throughput time; to remove four FTEs by avoiding any rekeying between the ERP and website; or to eliminate errors in labeling by automating label production.
2. Be clear about the key requirements.
In everyday business language, document the key things the systems must do, or must enable, or must achieve. This might be a list of forty or fifty statements, such as, Telesales handling staff can see accurate stock info and pricing on any products within thirty seconds.
Often the emphasis is on how you go about things today, but the focus should be on outcomes, as there may be better ways to get there. And all department heads need to be involved, to agree, and to sign off – yes, put ink on the paper!
3. Get specific about who is involved and who is accountable.
First, pick the right people to own the project. Are there experts on the business who will need to be assigned to the project team? Will their positions need to be filled?
And don’t assume that every technologyie in your business understands MRP or ERP projects. Increasingly the line is blurred between shop-floor technology, automation, and information technology. The Ops team (who might have owned this project a decade ago) may no longer have the right skills or experience.
Second, everyone must be clear on their roles in the project. Are you aiming to involve some of your own people in the details so they can become expert superusers of your new system? Who in the C-suite is accountable for delivery? This should include not only delivery of the technology, but all the business outcomes identified at the start.
4. Get clear on the cost-benefit model.
Although you don’t know the detailed costs yet, you can establish the cost-benefit model. This means understanding how this project will deliver hard benefits, so that when compromises are necessary, you can identify what’s worth keeping and what you can drop. The cost-benefit should be based on improvements in Key Performance Indicators (KPIs)—for example, identify the target on-time, in-full (OTIF) and compare to current measurements of the same KPIs.
5. Select your products rationally.
There are hundreds of systems available: IFS, Nav, AX, SAP, SAGE, Epicor, Oracle, Syspro to name a few! This can be a minefield—but not if you’re clear-headed about it. Once you have all your requirements, use them to create selection criteria, a scoring system, and clear questions to ask.
You need to weigh up the advantages of integrated ERP with multiple specialized systems, which may offer better features but greater complexity.
For example, it can make sense to select a standard ERP and a specialist warehousing product for better goods handling (picking, putaways etc.), or a dedicated Manufacturing Execution System to collect detailed process efficiency data. Make sure all the business stakeholders are part of the decision-making, so they have a vested interest in success.
6. Select your partners rationally.
A partner will configure, customize, and support your systems. As you will need to have a long-term relationship, it is critical that there is trust and a good cultural fit. Get references, and check everything! Ask around: are they experts in your sector? Are they financially secure? Have they got a stable team?
And start early, so that you have time to negotiate a good price and contract rather than having to cave in due to pressing deadlines.
7. Insist that your partners have a plan.
The vendor or implementation partner must provide a credible plan, and you must extend it to your own plans for things like communication, data setup, and retraining. Most importantly, the plan needs to show all activities to deliver the business objectives, not just delivery of the technology; and the plan should include all the resources and commitments, not just the supplier.
8. Define target business processes.
Working with the implementation partner, you need to design your target processes.
Many MRP and ERP projects fail because companies try to configure new software to match the way they always have worked, as opposed to designing the most efficient processes.
This often leads to expensive custom programming; and, if the implementation partner is charging for this, then their salespeople will be delighted to help you make bad decisions!
9. Identify process and organizational changes.
With new systems come new ways of working. And change can be hard for some. You need to plan, document, and carefully roll out these changes, and communicate frequently with everyone involved. This may be the most difficult part of the entire project, especially if some of your teams are remote and not often in the office. It will not happen by accident; without proper management, many people will go to great lengths to avoid changing how they do their jobs!
10. Take the opportunity to clean up your data.
Start cleaning your data today. Because getting the data right can be make-or-break for a new system, and this task can be the biggest and most critical part of the project. After all one of the key benefits of an ERP or MRP is how the information helps decision-making; if you take away that with poor and inaccurate data, you’re taking away the whole point.
Think about product codes and bills of material and how they can best be structured to deliver the information the business needs. Seriously, start now. Don’t wait until go-live. In our experience, those who wait end up bringing inaccurate and unclean data across to the new system!
11. Manage device integration.
Devices are going to be integrated with these news systems, so get started on identifying them and testing as soon as possible. For example, shop-floor data collection devices like scales, environmental sensors, barcode scanners, or RFID trackers are increasingly key sources of efficiency, so they can’t be an afterthought.
Remember to test for more than just if the new software works. Are the devices suitable for the environment? Consider temperature, humidity, vibration, etc. Whenever you can, involve the device suppliers.
12. Run a testing and conference-room pilot.
By making the vendor run their product through your business processes, you can check that the system and business practices will fit and that the key staff are ready for change. A pilot is more than a last chance to stop problems. It’s a great way to get superusers onto the system; it may also be an opportunity to identify additional benefits.
13. Manage the implementation / cutover / go-live.
A “big bang” go-live can be complicated and risky; different parts of the new system may be ready at different times; and different phases will deliver different benefits. So there will normally be a progressive adoption of the new system(s) and decommissioning of the old ones. This needs to be thought through and carefully managed.
14. Train and monitor staff.
Staff will need training and coaching in how to work with new systems and processes. There may be a period of de-snagging and minor changes. This needs careful monitoring and policing to ensure that employees have clear ways of working and do not adopt bad habits. You should be prepared for some pushback: for many, change is daunting and can cause stress and resentment. And when they don’t yet fully understand the new way of working, some may blame the system for mistakes or slower processes.
15. Get specific about who has ownership moving forward.
The project owners need to ensure the original business objectives and cost benefits materialize. But this is also the moment when the new system becomes “legacy,” so it’s critical that ongoing ownership is clear.
Ongoing monitoring must be part of the routine, and new issues must be addressed quickly and without a fuss. Whose job is that?
In addition, you will need an annual budget for vendor support, for training of new staff, for fixes, and for amendments so the system stays aligned as working practices and products change (as they inevitably will).
Lay the foundation for your future
All too often we see a lack of focus on the key points of this checklist. As a result, projects become bogged down, with overruns of both cost and timescales. Eventually, in the race to finish, the original vision is forgotten, there is no more time or money, and the aim becomes to “just get it done”!
But if you follow the checklist, you greatly increase the risk of success, and along with it, the transformational benefits of a new ERP or MRP system. Many of our clients have achieved significant uplift in efficiency and service and find new confidence to grow because their business starts to feel like a platform for scaling up!
When system issues are no longer on the agenda, the executive team has more time to talk about strategy and growth. And effective systems provide data and reports to feed those conversations.
The Future of Manufacturing Part 1: The Six Key Trends of Manufacturing 4.0
The IT industry often deliberately spreads “fear, uncertainty and doubt” in the marketplace. They create confusion about the future, and then, of course, sell you the perfect solution. So is the so-called “Fourth Industrial Revolution” and “Manufacturing 4.0” part of the usual befuddlement bandwagon?
What is really happening? What are the technologies that will form this change? And what difference do they really make? Read the 6 key trends, but for a top line perspective watch the short video below.
Shop Floor technology Is Increasingly Information technology
First, a little context. Historically, there was a clear distinction: your operations teams owned shop-floor technology, and the IT team owned IT. But this gap is rapidly closing. For many companies, the challenge now is to have the right leadership to effectively lead these cross-border initiatives and to deliver value.
The winners will be those companies who are smart enough to use technology and data to meet customer needs more effectively and to innovate ahead of the competition. This is as much about leadership as it is about technology.
We believe there are six key trends to this generation of technology:
IoT/5G
Improved collaboration
Big data, AI and machine learning
Robots/cobots
Servitization
3D printing
Here’s what they each mean.
1. How Will IoT/5G Make a Difference to Manufacturing?
Just to be clear, “IoT” means the “Internet of Things,” or using connectivity to control machinery and harvest data. “5G” is the fifth generation of technology for cellular networks.
When it comes to manufacturing, IoT and 5G are about incorporating sensors and controllers on the shop floor to make the production activity more visible and controllable in real-time. This requires new systems as well.
Most importantly, it requires skilled personnel to deliver the benefits, which include minimizing costs and maximizing output with more accurate ordering, production, and stock management.
One of the best aspects of IoT and 5G for manufacturers is how it improves reporting. Rather than basing decisions on reports that were manually created a week or a month ago, information flows into your ERP or MRP systems to provide accurate, up-to-the-minute information, with minimal manual intervention.
Ultimately, IoT lowers costs, increases profits, and delivers better quality and service to customers.
Continue reading the key trends below the video.
If you’d like to talk about your manufacturing challenges, Get in touch
2. How Will Manufacturing 4.0 Improve Internal and External Collaboration?
When you hear “Manufacturing 4.0” or “Industry 4.0” it generally means increasingly autonomous systems and information in real-time.
More specifically, Manufacturing Execution Systems (MES) allow the capture of more data about detailed process activities and individual operations on individual items. MES can make use of barcode or QR-code scanning, or automated collection of RFID information, or similar smart-monitoring.
As more real-time information is available, and office IT like Microsoft Teams becomes mainstream, your management, supervisors, and even skilled operators no longer need to be on the shop floor to manage production. Managers and supervisors can see precisely what is happening, managing production in real-time, or detecting issues as they happen. They can also look backwards to understand costs, cycle-times and quality. Managers can assess effectiveness of processes, teams, production batches, and even individual machines or staff.
E-commerce has reset customer expectations across all industries. Your customers will increasingly expect to be able to see and assess the progress of their own orders through your factory
This technology has external implications as well. Fortunately, with Manufacturing 4.0, integration of your production activities with your customers, suppliers and partners becomes possible at a far more detailed level.
3. The Impact of Big Data, Artificial Intelligence and Machine Learning in Manufacturing
Of course, large volumes of data create new challenges as well as opportunities. Manufacturers need new tools to understand data patterns. technologies such as Tableau and Snowflake make vast number-crunching and visualization easy, and once the data is digestible, it’s a small step to introduce automation for some aspects of decision-making.
It doesn’t have to be rocket science. It can be a structure of simple rules, such as alerting the customer to reorder ahead of time. Or it can be sophisticated Machine Learning and Artificial Intelligence.
The combination of data, AI, and machine learning is already proving to be extremely powerful. But it doesn’t mean that people no longer matter. The issue is often one of skilled leadership. Manufacturers need technology-savvy leaders to set the vision and to create a culture of data-driven, analytical decision-making. With the right technology leadership it becomes much easier—and more profitable—to exploit all this new technology.
4. The New Generation of Robots and Cobots
In the past, due to their high cost and the production volumes necessary to justify the expense, industrial robots were often only used by large manufacturers.
But now we have a new generation of collaborative robots, or cobots, which automate tactical elements of production activity. Their simplicity and flexibility mean that they are easier to deploy and can quickly deliver value, which makes them far more appropriate to the mid-market.
Again, implementing this fantastic technology creates a leadership challenge. Cobots are often configured and programmed by skilled production operators working in tandem with IT staff. Again, you’ll need a skilled IT leader who can facilitate this collaboration.
5. Servitization Creates Greater Value
“Servitization” simply means the shift from selling products to selling services. We live in an era where companies want to buy everything “as a service”: manufacturers can increasingly look to a future where they charge customers for using their products rather than buying them. Whether it’s car tires, aircraft engines, or workwear, manufacturers are charging recurring revenues or licenses to their customers for the use of the products, often with support and replacement bundled in.
Servitization will increasingly work in tandem with other aspects of Manufacturing 4.0. Perhaps the greatest opportunities are in monitoring and communicating with your products while in use. This enables new models for preventative maintenance, guaranteed service and support.
We will also see entirely new opportunities for value-added services, along with greater opportunities for upselling and better customer lock-in. The bottom line is that reliable, recurring revenues are more valuable than one-off sales. Manufacturers who make this change will become increasingly dominant.
6. The 3D Printing Revolution Continues
3D printing will have a revolutionary effect on many aspects of manufacturing. Rapid prototyping and iteration are already becoming the norm, but the real revolutions will be in mass customization where customer expectations will undergo a major change. Customers will expect endless product versions and variations.
For manufacturers, the benefits are also enormous: 3D printing now allows for a wider range of materials, and data can be included directly onto the product. For example, QR codes or human-readable product IDs can be printed as part of the production process, with obvious benefits for process monitoring and stock management.
And 3D printing will massively reduce the need for stock holding, especially for spares, which will free up cash. This may have a transformative effect on smaller companies and their ability to invest in these new trends.
What This Means for Everybody (and the Midmarket)
Along with the increased flexibility for customers and manufacturers, the above trends will have enormous, worldwide effects.
These changes will reduce labor costs, which in turn will reduce the attractiveness of low-cost economies as well as economies of scale. Together with an increased post-COVID focus on security of supply, this will enable a return to more local manufacturing.
Finally, it’s worth noting that more local manufacture would be a reversal of decades (or centuries) of growth in global trade of manufactured goods. Despite forecast increases in consumption, a recent ING report estimates a reduction in world trade by as much as 40% by 2040!
The reduction will affect a wide range of industries, from shipping to insurance, and may have very broad-ranging geopolitical ramifications as well. It won’t be the first time that manufacturing has changed the world!
It seems then quite reasonable to speak of another industrial revolution. But while many in the IT industry will want to sell solutions, we see it more as a leadership challenge. We believe that ambitious mid-sized businesses will find huge opportunities, so long as they have the right leadership in terms of their IT and technology.
This is the second in a two-part series on how to launch a successful Enterprise Planning Resource (ERP) project. For more information on ERP in plain English, check out our Knowledge Center.
How to Start an ERP Project, Part II
Read our continuation of how ERP products help improve integration with both customers and suppliers.
This is the first in a two-part series on how to launch a successful Enterprise Planning Resource (ERP) project. For more information on ERP in plain English, check out our Knowledge Center.
How to Start an ERP Project, Part I
Read our full briefing to learn how ERP products help improve integration with both customers and suppliers.
A Concise Introduction to Integration Problems Part II: How to Solve Them
(This is the second of our two-part series on integration problems. Click to read Part I: How to Spot Them.)
So, you have identified that your company has integration problems. Morale is affected, reporting is overly complicated, you can’t plan for the future, and customer service is suffering. So, what can you do about it?
Look Before You Leap
When looking to fix integration problems, you have a spectrum of options: at one end is a long series of fixes to individual issues; at the other end is a major, transformational project.
Either way, strategize first! Before you do anything, your Board should consider these questions:
What is your ambition for growth? Meaning, how much do you intend to grow and change the business in the coming years? Do you need a platform for growth and acquisition, or can you continue to cope?
What resources are available? Are you prepared to invest significant resources in projects, or would you rather tackle problems piecemeal?
How serious are the problems? How much are they really affecting — or in danger of affecting — the business?
Is there a major opportunity to reinvent your business, or just an opportunity to remove some irritations?
Be aware that this discussion can reveal personal tensions in your organization. In most cases, when systems aren’t integrated, it means that departments aren’t communicating with each other — so this kind of discussion can be quite stormy, as departments may blame each other for your company’s struggles.
Avoid the blame-game. Aim for a dispassionate acceptance of the current realities and the need for change. Then figure out who will have ownership of the solution.
Putting Together Your Integration Dream Team
You need focus to solve integration problems. So, start with a competent team that has resources and authority. Appoint a Director to be accountable and give them a twelve-week timeframe within which solving integration problems is their priority.
Why twelve weeks? Because the time period needs to be long enough to actually make a difference, but short enough that business-as-usual issues can wait, so this project can genuinely be a priority.
The initial focus should be on creating a list of issues with (a) estimates of the three-year business impact of each, and (b) an assessment of how readily solvable the problem. From this list you can select, say, the top three or four problems with a commitment to solve or substantially reduce them in twelve weeks.
How to Take Small Steps Forward
Remember that integration solutions are on the spectrum between individual fixes and a big, transformational project. It may be tempting to think big — but it may not be necessary! For each issue, consider the following:
Can processes be changed to eliminate the problem? Perhaps small process and system amendments can streamline activities.
Are personnel issues contributing? You may need to improve your training programs or take a hard look at incentives (e.g. sales commissions) that influence behaviour. Are there individuals whose roles need to be changed?
If workarounds are necessary, can they be automated? For example, using Excel macros or templates, small bespoke programs, or other data processing or reporting tools.
Are there incompatible or obsolete technologies that must be upgraded or replaced?
More Serious Redesign Projects
If it turns out that more serious redesigns are necessary, you’ll need an even more strategic approach. Go back to the beginning and consider how to reorganize your business to suit the needs of your customers. For example, automate manual activities wherever possible, unless it makes commercial sense or provides enhanced service that your customers value.
Then start thinking through the main processes, key performance indicators, and options for back-end systems. (Naturally, if you reduce the number of back-end systems, there will be fewer technical integrations, so there should be fewer sources of potential problems.)
A word of warning: some vendors market their solutions as a single brand, when, under the bonnet, they actually provide multiple products which are not fully integrated. So, one “product” may actually be composed of many partly integrated pieces of software.
The solution may then lie in Enterprise Resource Planning (ERP). Basically, ERP takes all of the core processes you need to run your company — finance, HR, manufacturing, supply chain, services, procurement, and others — and integrates them into a single system.
The goal is to provide all the separate aspects of your business with the same information in real-time. And the result can a huge springboard to scalability and growth.
For more posts on ERP and Integration issues, visit our Knowledge Center.
A Concise Introduction to Integration Problems Part I: How to Spot Them
Integration problems can cause your business quite a bit of damage. When systems don’t talk to each other, it inhibits growth and undermines morale. It means more mistakes and manual work. It makes reporting difficult or impossible! To make matters even worse, the problems can be difficult to understand in detail, and even more difficult to untangle.
Of course, every company has its challenges. So how do you know if integration is behind them? The first step is considering the specific issues facing your company. If you’re seeing one or more of the issues below, take a hard look at how your systems are working together or not.
The Six Most Common (and Frustrating!) Results of Integration Problems
Morale is suffering. Inefficient processes don’t just hurt the bottom line. They cause errors and delays, leading to frustration and arguments. And they make it harder to provide one of the most satisfying aspects of any business – good service to customers.
Reportingis inaccurate and time-consuming. Managing a successful business requires accurate and timely data. But when there are integration issues, reporting is over complicated, requiring major manual effort. You may also lack simple dashboards for managers around the business, which makes it harder to make the right decisions and delegate authority.
Service is suffering. It’s not easy to provide good service when you lack up-to-date information on stock, delivery, or products. Your people should put the customer first, but their energy is drained by system problems.
It’s harder for marketing and sales. Due to lack of data, great ideas never get off the ground. For example, the sales director has a clever idea for a new campaign, but it’s almost impossible to crunch the numbers. Or new plans for intelligent cross-selling or up selling are impractical, because nobody can effectively analyse purchasing habits.
You can’t strategize. Your online strategy is impossible if back-end systems can’t provide a simple platform. Without seamless back-office processes, you can’t easily analyse product, stock, or sales data; you lack effective product searches and other simple “must-haves.”
People are choke-points. Individuals have their own vital lists and workarounds, so they become individually critical to the operation. When these key people are on vacation or sick, then the whole business is affected and if they leave it’s a major problem!
Why Is It So Hard to Solve Integration Problems?
It can be hard to figure out solutions because busy directors just don’t have time to get to the bottom of it all. Put simply, there may be no one in your business with the skills, time, resources, and authority to solve these problems.
Another reason may lay in an accumulation of small problems, each intricate and complicated in their own way. For instance, when faced with integration issues many well-intentioned people create workarounds – their own special spreadsheets, databases, trackers, or the like. Each one solves an individual problem but adds further layers of complexity and time-consuming tasks.
Over time, more people are employed to deal with these tasks and, of course, they see it as their job. No one thinks of smart ways to eliminate their own job!
The good news is that while solving integration problems can be difficult, it’s definitely possible. If integration issues are hampering your company, learn what you can by reading the next instalment which will be published shortly.
For more posts on ERP and Integration issues, visit our Knowledge Center.
Manufacturing Insights — Part 1: The Impact of the Internet of Things
This is the first of our three-part series on the future of manufacturing. Check out Part 2: Checklist for Successful ERP Projects, and Part 3: Getting Data Right.
The Internet of Things, as you likely already know, is the idea of implanting Internet devices in everyday electronics, like your appliances—it’s having your fridge let you know when it’s time to buy more milk, or even better, ordering it for you.
Lately we hear a lot of talk about the impact of the Internet of Things on manufacturing. We’re seeing buzzwords like the Industrial Internet, Industry 4.0, and smart factories. So what’s really going on?
IT companies like to baffle the market with buzzwords. So it’s important to remember that the ideas are straightforward. In simple terms, the Internet of Things in manufacturing is all about technology on the production line—incorporating sensors and controllers to make production more visible, more efficient, and more controllable in real-time. It means that your staff can deal with customer requirements more accurately: managing stock, orders, and production to minimize costs, while maximizing output and quality.
In manufacturing, the Internet of Things will also help with reporting. Some companies use manually created reports, from weeks- or months-old data, for planning. The Internet of Things integrates devices into enterprise resource planning (ERP) systems to provide up-to-the-minute information accurately, with minimal manual intervention.
Of course, it’s not a huge step from there to automating some aspects of decision-making. This can be anything from a structure of simple rules to sophisticated machine learning and Artificial Intelligence.
For manufacturing businesses, the Internet of Things will impact on customers as well. Your customers will increasingly expect to follow the progress of their own orders through your factory. And with the Internet of Things, integration of production activities with customers, suppliers, and partners becomes possible at a far more detailed level.
For the manufacturer, though, perhaps the greatest opportunities will be monitor and communicate with your products after they’ve been shipped. You’ll get information about your products when they are in use, enabling new ways to offer maintenance and support, and new avenues for value-added services.
Looking further into the future, we believe that the more revolutionary changes in manufacturing will come via 3D printing. Rapid prototyping and iteration are already becoming the norm, but the real revolutions will be in mass customization. Endless product versions and variations will become commonplace.
3D printing will also massively reduce the need for stock-holding, especially for spares, which will free up cash. This may have a transformative effect on smaller companies and their ability to invest in new trends. We believe that ambitious mid-sized businesses will find huge opportunities in this change.
Finally, it’s worth noting that according to some experts, these trends towards local manufacturing will reverse decades (or centuries) of growth in global trade of manufactured goods. A recent ING report estimated a reduction in world trade by as much as forty percent by 2040! This will affect a wide range of industries from shipping to insurance, and may have very broad-ranging geopolitical ramifications as well.
Well, it won’t be the first time that manufacturing has changed the world. But before that happens, read on to find out how the Internet of Things can transform your business now.
Read the rest of our special series on the future of manufacturing:
Digital Transformations – Real world examples of market breakthrough!
Many mid-sized businesses simply see IT as a problem to be overcome or a beast that has to be fed. The Board meeting IT slot is often dominated by discussions about anti-virus software, operating system upgrades, contract negotiations and laptop replacement costs. The Board’s time, money and emotional energy are all used up just dealing with these operational details.
But IT genuinely has the ability to transform a business. There are radical and new ways to grow the business, to serve customers better and to make more profit. Businesses that can connect with these benefits are, understandably, valued far higher than their low-technology competitors.
These opportunities should be the focus of the Board’s discussions about IT.
So what exactly is Digital Transformation?
For our clients, Digital Transformation simply means using IT to deliver dramatic improvement. That’s different to just an upgrade or fixing some niggling problems. It means: using IT to make a significant change for the better.
That may just mean simple IT done well – that’s surprisingly rare! Or it may mean genuine technology innovation, something that is breaking new (or new’ish) ground.
We simplify this issue by defining 4 different kinds of transformation:
For an explanation about the 4 types, read our post.
This briefing is more information about the first kind, that we call: “Market break-through”. In our analysis, this is really about using your expertise to create entirely new offers. For example, some of our clients have used their expertise to create software that provides new kinds of specialist services; some manufacturers or wholesalers have become retailers; some have cut through supply chains, or they have positioned themselves as new kinds of intermediary, repackaging or combining products and services from other companies.
Market Break-through
In our experience mid-sized businesses often have a huge advantage over their larger competitors in this kind of transformation because:
• they have in-depth expertise in their markets and a detailed understanding of their clients’ business needs • they are small enough to make rapid decisions and to make changes quickly • they are not slaves to short-term reporting, and they don’t have a raft of middle-managers focussed on preserving their careers and exploiting their existing incentive arrangements!
The opportunity for ambitious mid-market businesses is to think about your real customers’ needs and to work backwards from there. Start with a blank sheet of paper and work out what your customers really value (which might not be the same as what you currently give them!).
For one of our clients, Amberjack, this means creating new software to provide innovative solutions for their clients. Amberjack is a global expert in future talent and intake based volume outsourcing and work with high profile global businesses who operate in competitive international markets.
As Cynthia Bostock, CEO explained:
“Historically, Amberjack won business based on our highly specialist teams and great levels of service. That’s still true today, but the market moves on. Our clients are companies like Unilever, international brands in ‘The Big 4’, Mars and GSK who rightly expect more, and we can give them more.
The advent of automation and digital assessment, combined with the increasing influence the modern consumer experience has on candidate experience expectations means that strategies that worked in the past to attract and select the very best talent, are no longer effective or competitive.”
“Many of our clients recruit large numbers of graduates and apprentices annually, and expect a slick digital recruitment process to secure the best talent. For outstanding candidates it’s always a buyer’s market and we need to help our clients to stand out from the crowd and attract the very best.”
“We offer real strategic advantage to our clients rather than just cost-saving. For example, offering to help a Big 4 consultancy recruit graduates more efficiently and effectively is interesting, but giving them a way to recruit the very best candidates in an exciting and immersive way offers them long-term strategic advantage. And that is a fundamentally higher-value proposition.
Amberjack created a vision for an end-to-end digital experience for candidates and advanced tools that manage the entire recruitment process online. In the past, high-volume recruitment processes would be something of a paper-factory, which is expensive and (inevitably) error-prone, not to mention time consuming.”
“Amberjack’s clients now have a much slicker process but also have far greater control because recruitment is underpinned by data insight. They can easily review compliance information and ensure they are implementing their diversity agenda or check things like gender balance and even measure the experience candidates receive. These are reasons why international advisory firm Bersin by Deloitte recently named Amberjack as a global HR disruptor for 2018.”
Freeman Clark provided one of our Principals,Kev Cooper, as Amberjack’s IT Director. Kev described the challenge and the opportunity:
“Candidates expect to be able to take part in the process anytime, anywhere – on their smartphone, laptop or tablet. And clients expect flexibility – we need to be able to integrate with their systems to provide a seamless end-to-end process and to meet their exacting standards.
And we’ve only just started, there is so much further we can go. technology continues to evolve at an ever-increasing pace. This industry will continue to be revolutionised by new value-add technologies and Amberjack will be at the forefront, evaluating emerging technologies to ensure we can continue to bring increased value to our clients, the likes of Artificial Intelligence and automation will further deliver innovation to the market.”
Amberjack was nominated for 7 different awards in the 2018 National Recruiter awards and won 4 including Supplier of the Year! For more information about Amberjack, please visit their website https://www.weareamberjack.com
For, CoachHire.com, the opportunity has been to create a platform for connecting buyers and sellers. Across the technology industry, new platforms always attract attention but there are plenty of markets where specialist expertise and relationships are key and established players are far better placed to spot and exploit these opportunities than a technology startup in Silicon valley!
The coach hire industry is typically very fragmented and local and it’s not renowned for technology innovation.
CoachHire.com’s CEO saw an opportunity to help customers find coaches and specific services they need and to bring efficiencies to the coach operators. Mathew Hassell, CEO told us:
“Most coach operators are very small companies with very limited internal systems – often just paper, spreadsheets and whiteboards. On the other side of the equation, people who want to order a shuttlebus or coach may have an urgent need and don’t know where to start.
Our platform gives customers a simple and slick purchasing experience but at the same time, we give the operators technology to help them manage their bookings and allow them to move into the 21st century as well!”
One of the biggest markets for coaches is schools and here CoachHire.com use technology to improve safeguarding and to give parents more peace of mind.
Our Principal Mat Diss is CoachHire.com’s CTO and he explained:
“We can use technology to ensure the operator, schools and parents know where the bus is so parents don’t waste time waiting for a bus that’s delayed and to ensure no-one worries unnecessarily. And we can confirm children getting on and getting off the bus to enhance safeguarding as well.
This is a high profile area and we all remember the story last year of a 4 year old boy left in a coach which returned to the depot, and we aim to address this kind of concern.
But with anything revolutionary you run into new questions and issues – for example, we don’t want drivers distracted by technology. And what if a child stays late for a club or is off school because they’re ill… we don’t want parents to get a message that their child has missed the bus.”
Both CoachHire.com and Amberjack are using their knowledge of their market and their clients’ needs to lead change and to grow whilst offering their customers something significantly better than was previously available.
This may be through a series of improvements, for development of new products or services that progressively become more bold and transformational. Or a single “step-change” … from the old world to the new!
Where to Begin
Starting the journey towards a Digital Transformation is perhaps the most difficult step. The following questions can be a useful kickstart for a Board workshop…
1. What is it your market really needs? What do customers really care about and value? 2. If you started with a blank sheet of paper, how would you do things differently? 3. How can you remove the barriers to enable you to lead this transformation?
Imagine that, tomorrow morning, you read in your trade press that one of your competitors has made a radical change that leaves you behind.
Be the one who does this first!
Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use IT to beat their competition. Contact Us and we’ll be in touch for an informal conversation.
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Graeme Freeman Co-Founder and Director
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