Four Ways Manufacturing Organizations Can Prepare For The Digital Transformation

With an aggressive move towards digital transformation, IT leaders and managers are tasked with putting together the pieces of the ideal strategy for their company.

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Digital transformation continues to be a hot button issue in today’s ever-changing technology landscape. McKinsey & Co. reported that digital-manufacturing technologies will transform every facet of the manufacturing process. If an organization is not starting developing their roadmap and strategy towards digital transformation, they will not realize the many business benefits — like being able to leverage the Industrial Internet of Things (IIoT), machine learning, AI, big data or analytics — associated with it, and will face the consequences of being left behind by competitors.

According to research from Forrester and Accenture, key drivers of digital transformation include profitability, customer satisfaction and increased speed-to-market. IDC research also found that by 2019, 75 percent of manufacturing supply chains will have shifted to digital connections which will improve responsiveness and productivity by 15 percent.

With this aggressive move towards transformation, IT leaders and managers are tasked with putting together the pieces of the ideal strategy for their company. While the digital transformation roadmap does not look the same for every organization, here are four things manufacturing technology leaders should consider when starting their transformation into the digital age:

Choose the Right Cloud Strategy: With cloud use as a key foundational element to enabling digital transformation, manufacturers need to identify the right infrastructure framework to ensure they meet evolving business and operational requirements. For those manufacturing organizations that have yet to migrate, there remains uncertainty about the best (or most realistic) path as they continue their digital transformation. While there is much to consider when migrating to the cloud and managing an organization’s environment, a combination of public and private clouds (hybrid) often provides more flexibility to make decisions as data demands and business and IT requirements change. Ultimately, hybrid IT simplifies the management of a mixed environment, offering greater automation and visibility into an organization’s resources.

Additionally, enlisting the help of a third party, (such as a cloud provider, Managed Service Provider (MSP) or Infrastructure as a Service provider (IaaS)) will potentially ease the adoption of a hybrid implementation.

Draft a Dream Team: According to recent research from TriCore Solutions and Researchscape, IT skills and experience and team bandwidth were the second most cited barriers to cloud adoption. To overcome this challenge, manufacturing organizations should consider developing both a deep bench of professionals with varied IT skills and experience and partnering with a service organization to help fill and compliment gaps.

Within the evolving IT industry, there is a growing need for individuals who understand how to collect and manage data, lead analytics, understand business processes and, from there, automate and either develop or direct the development of these processes seamlessly. Understanding that no one skillset trumps the other, creating the perfect team will move an organization more effectively through their digital transformation.

Budget for the Future: Worldwide IT spending is projected to total $3.5 trillion in 2017, a 2.4 increase from 2016, according to Gartner. With all the changes, new technologies and new ideas that come along with digital transformation, companies are evaluating their IT spend often, and according to research from TriCore Solutions and Researchscape, 91 percent think IT spending needs to be re-evaluated again in the next year.

As the need to digitize becomes an industry standard, manufacturing organizations must think strategically about their organization’s budget for increased spending year-over-year in order to keep up with the competitive IT landscape. To save on cost, organizations should consider transitioning to an outsourced model where typical savings should be at least 30 percent and leverage the savings to invest in resources and services to being their digital transformation.

Standardize a Security Strategy: In today’s digital age, cyber threats seemingly grow in number and sophistication. In fact, breaches have increased by 29 percent compared to 2016. As manufacturing IT leaders consider a digital transformation, they must consider an effective IT security strategy.

With technologies like cloud and IoT devices increasing the attack surface, it’s easy for manufacturing organizations to forget about the security of their legacy enterprise systems. But this oversight can leave gaps and open up organizations to more security risk. Organizations must have experts to help identify the most important threats and effectively preventing them. If an organization does not have an in-house expert, consider working with a provider like an MSPs, to help manage emerging threats on an ongoing basis. 

While there is no ‘one-size fits all’ approach to a digital transformation strategy, understanding the challenges and opportunities, and partnering with the right people will help manufacturing organizations efficiently leverage the growing landscape of new technologies available to them.

Mark Clayman is SVP and General Manager of Enterprise Applications at Rackspace.

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