Has your manufacturing company experienced considerable growth through acquisition or other significant changes in recent years? While change can be a positive thing, it can also lead to a lack of centralized IT control, in turn creating an IT environment that feels a bit… well, chaotic. This “hodge-podge” type of environment—one that’s characterized by multiple systems managed in functional silos—is actually quite common. And not just an issue among post-acquisition companies. This scenario applies to any manufacturing organization that lacks a holistic, well-planned IT approach.
So how do CIOs or IT Mangers change course and regain control of their IT environment? Or better yet, prevent this scenario from happening altogether? To answer this, we sat down with Larry Dube, who has partnered with countless manufacturing organizations over the years to help them strategize and implement a strategic IT plan reflective of a function-first mentality. Here are his expert insights.
Can you please start by describing what is meant by a function-first mentality?
Yes. In fact, addressing function first is the perfect starting point for anyone who is evaluating IT needs. Begin by asking: which functionalities will drive my business forward? Which will support my business objectives this year, next year… and in five years? It’s critical to ask these questions first to establish your IT initiatives and timelines on a zoomed-out, company-wide level. This will help shape an overarching IT roadmap that prevents reactive decisions that only solve for short-term functional needs of a specific department.
This overarching plan should also be a precursor to vendor selection. Many different vendors offer many different solutions, and each solution has varying depths of functionality. It’s best to know what you need first, then seek out the vendor/solution with the capabilities to support that need. Many companies engage with vendors without a long-term plan in place—and this type of myopic view can later reveal shortcomings with a solution’s capabilities.
Is it easier/better to select a single cloud vendor for multiple functional needs?
No, not necessarily. It may feel logical to seek out a single vendor who “does it all” to make things easier. Some may also see this as a way streamline integration of multiple cloud solutions. However, this mentality can compromise your function-first approach. Plus, dig a little deeper, and it’s likely that most of those vendors are working with outside partners with their own applications anyways. So ultimately, you would still be implementing multiple products from multiple vendors, hardly solving for streamlined integration. Again, it’s more about finding a vendor with a solution that’s specialized and in-depth enough to support the short- and long-term functional needs you’ve laid out.
What about manufacturing companies who are running older systems? Time to start fresh and upgrade all systems to in-house or cloud-based solutions?
No—it does not have to be all or nothing! One of the most common concerns among today’s manufacturing companies is whether their existing systems—some of which have been in place for decades—will support integration with new, cloud-based solutions. Nine out of ten times older ERP systems are fully capable of integrating with the newer, cloud-based point solutions that address more contemporary business needs. This concept, commonly known as hybrid ERP, is a critical alternative for manufacturing companies who don’t want to start a costly “rip and replace” approach in hopes of possibly solving that so-called hodge-podge scenario.
Far less costly, the hybrid ERP approach typically starts with a general assessment of an existing platform’s capabilities. From there, IT managers can map out their business needs, decide how to address them (in-house platform? cloud-based solutions?) and assign priorities/timelines for each. Here again, the bottom line is the same: it comes back to following a well-planned, methodical approach that brings functionality to the forefront regardless of the location of the software.
What advice can you give companies who are interested in a planned approach – one that lays out the “IT roadmap” you’ve described?
A planned approach largely relies upon centralized IT management. That means having designated resources in place who can effectively gather business requirements, ask the right questions, then make decisions with a high-level view. For example, how will a single solution that meets the needs of one functional business area (i.e., Business Intelligence) effect other departments (i.e., your warehouse)? Remember, the goal is to make decisions that are not reactive, short-term fixes that solve for just one piece of the larger IT story. To help with these decisions, some businesses may consider partnering with high-level technical resources that will understand your niche for strategic IT and business expertise that helps alleviate the burden on your internal IT staff.
Any final thoughts or advice for companies whose IT environment feels mismanaged or misaligned with business goals?
It boils down to this: do what you’re good at. If you’re a manufacturing organization, then it’s best to focus your IT resources on your core business; that is, manufacturing. If that seems too tall of an order, lean on outside IT expertise so you can keep your eye on the ball and focus your IT team on those critical business drivers. Even for companies who have taken a reactive, unplanned approach for far too long, fear not. It’s never too late to get your IT strategy re-aligned with your organizational goals. A strategic and methodical plan that puts function first is the very best remedy.