Article written by JP van Loggerenberg (Chief Technology Officer – SYSPRO)
The pandemic has compelled most businesses to reflect on current operations. For manufacturers and distributors, the pandemic led to immediate supply chain disruptions. The inability to operate as usual, coupled with the increased need for collaborative tools to work remotely, has seen many manufacturers and distributors shift their preference towards a cloud-deployed business solution.
This preference was echoed in our recent study into business resiliency during COVID-19. An online survey was shared with industry professionals of different managerial levels within each of our key regions. A key finding that resulted from the survey was that 29% of businesses stated that overall business systems availability and accessibility were inadequate they indicated they would be pursuing cloud-based business systems moving forward. With the pandemic, their cautious hesitancy in adopting cloud systems has been allayed as they acknowledge that the cloud allows for collaboration, communication and business continuity.
One of the biggest challenges that manufacturers face though is identifying what their level of digital maturity is so that attainable plans can be put in motion to help them transition to the cloud.
Understanding the levels of digital maturity
There are many labels given to the different stages of digital maturity. Some speak of indifference, observer, challenger, and native categories; while others refer to traditional, emerging, engaged, competitive, and maturing classifications as an example. No matter how you prefer to categorize it, some commonalities occur within each stage that can help you identify your organization’s level of digital maturity.
Some organizations are operating at a more traditional level, with most processes still happening manually, and with no current digital systems in place. The next level has begun creating a digital roadmap, where some processes are automated, and also has some applications hosted in the cloud, but they’re still early in their journey. The third level of maturity belongs to those who are actively pursuing a digital agenda, who can see the value that digitalization promises, and have automated their core processes, and embraced a hybrid-cloud environment. They’re competitive in the market but are looking to the future and realizing they need a growth plan.
Those on the upper level — the penthouse if you will — are driven by digital, and follow a cloud-first approach. Their adoption strength and success lie in the ability to adapt with a high level of agility backed by visibility across the business and key insights drawn from data analytics. These businesses know that they will always be learning and embracing new and more enabling technologies as they emerge, and that their digital transformation plans will need to be geared towards this continual growth and evolution.
Essentially, digital transformation is about either being capable of connecting or integrating systems, or implementing systems with the intention of integrating them. If there aren’t any existing systems in your organization, you will first need to implement them. If there are existing systems, then you will need to integrate them. Once that happens you will need to use the digital transformation process to try and unlock maximum value for your organization.
Questions you should expect from ERP providers during assessment
There are many nuances, and implications of being at particular stages of digital readiness and this impacts the planning of how to successfully journey to cloud. When it comes to assessing where your organization sits on the maturity scale, it helps to engage with a trusted ERP advisor who will ask the right questions during assessment phase, and will work closely with you to identify your specific current state of readiness, and help you to prioritize your immediate and mid-to-long term goals.
When you’re being assessed you can expect to be asked a lot of questions, such as what level of manufacturing are you working at? Is yours a smart-solution-friendly industry? Does it allow for a high degree of remote controlling, and automation? Will it benefit from investment in Internet of Things (IoT) solutions, or is it predominantly still driven by manual processes?
When it comes to transition to cloud, you’ll need to know how your IT budget is allocated, and how much is available to be allocated to cloud enablement. This will in turn indicate how much cloud enablement can happen. You’ll be asked what you want to achieve from transitioning into cloud, and what the flexibility and potential for collaboration you are hoping to achieve, as well as what value you are hoping will be unlocked for your business. It is also a good idea to think about whether you have plans to offer a product as a service which is unlocking new revenue streams for manufacturers across the globe, as this will need to be taken into account during the planning stages.
Convergence can happen gradually
You don’t have to do everything at once. While some businesses are born native, for more traditional businesses such as manufacturers, many are choosing to approach digitalization more holistically today, with multiple goals and stages in their journey bringing in different technologies when they are ready to incorporate them into their environment rather than disrupting their environments completely by overhauling everything. The key to successful transformation is to proceed at a manageable pace, bringing in multiple technologies over an extended period of time to unlock value. As you achieve each phase, you can create a new foundation based on the newly unlocked value and begin your evolution into the next phase on your path to operational excellence and competitive advantage.
What is important to understand at the start of your journey, is the underlying culture of your organization. Is it a risk-averse, risk-indifferent, or risk-friendly environment? Are there any opportunities that will allow for cross-functionality to work across multiple sites and spanning multiple silos? Does your organization operate within a standards and regulations-driven environment, or are you left to your own devices? Can those standards and guidelines (if they exist) be used as a framework to work towards. With each phase in your evolution, you will continue to adopt and adapt and evolve again. Digital transformation is precisely that. It is an ongoing effort to incrementally move a company forward in adopting new technology and unlocking value, either in terms of new market-share, or in terms of efficiency and cost management.
It’s never too soon to start planning for the future
We shouldn’t be waiting for a global pandemic to occur, to make good business decisions that can positively impact the long-term sustainability of our businesses. As business owners, we’ve all learned a lot over the past year. The key message is that if we want our businesses to stay relevant, and we want to ensure that business continuity is maintained over the long-term, it is time to consider transitioning to the cloud as an enabler of connectivity, availability and accessibility.
When considering your transformation to the cloud, look for a trusted advisor who will walk the journey with you, from planning to implementation. They should be able to help you identify your current level of maturity and make educated recommendations on how you can take your business to the next level over the short and longer-term.
Read more about SYSPRO’s study into how manufacturers and distributors handled the shift during COVID-19 here.