January2017

THECONNECTEDMANUFACTURERTHEDIGITALCONNECTIONOFDEVICES,PROCESSES,

DATAANDDECISIONS

Weliveinadigitalworld.Digitalcommunicationanddigitalsystemsofrecordarebecomingthenorm.But“digital”bringsfarmorevaluethansimplythepotentialofapaperlessenvironment.Italsogivesusmoreandbetterdata.Butthegreatestvalueof“digital”isinitsabilitytoconnectdevices,processesanddatatofasterandbetterdecision-making.Whetheryouaremakingdaytodaytacticaldecisionsontheshopfloororinthefrontoffice,orstrategicdecisionsonthetopfloor,youneedthatconnectivitytostayonestepaheadofthecompetition.

TheInternethasbroughtusintothedigitalageandfueledthedigitaleconomy.Ithasleveledtheplayingfieldglobally.Evensmalltomidsizecompaniescanestablishaglobalpresence,disruptmarketsandseizeunprecedentedopportunity.Butbecarefulwhatyouwishfor,becausethesystemsandtechnologythatgotyouwhereyouaretodayareunliklytogetyouwhereyouneedtogo.Disruptioncandestroymarkets,butcanalsocreateentirelynewmarkets.Unlessyouareatrulyconnectedmanufactureryouareunlikelytobethedisruptorandmorelikelytobedisrupted.

Thevastmajority(82%)ofmanufacturersthinkdigitaltechnologieshavethepotentialoffundamentallychangingthewaywedobusinessand86%believetheyarenecessaryforsurvival.While85%agreethatdigitaltechnologiesaretrulytransformativeinthewaytheyconnectoperationstosystemssuchasEnterpriseResourcePlanning(ERP),moststillstruggletobetrulyconnected.

Howconnectedareyouinourdigitaleconomytoday?

THEDIGITALAGETheInternethasbroughtusintothedigitalageandcreatedthedigitaleconomy.Ithasleveledtheplayingfieldglobally.Evenifyouareasmalltomidsizecompanyyoucanestablishaglobalpresenceandseizetheunprecedentedopportunitycreatedbynewmiddleclassesinemergingeconomies.Thebadnews:Socaneveryoneelse.Soyournextnewcompetitorscanspringupfromplaceswhere,inthepast,youwouldleastlikelyexpectthem.Youwillbevyingforbusinessamongststiffcompetitionlookingfornewandbetterwaystogrow.

Data Source Inthisreport,MintJutrasreferencesdatacollectedfromits2016EnterpriseSolutionStudy,investigatinggoals,challenges,statusandperformanceofsoftwareusedtorunabusiness.

Atotalof525responseswerecollectedfromcompaniesacrossabroadrangeofindustries,with229collectedfrommanufacturers.Thissampleincludesresponsesfromavarietyofdisciplinesincompaniesofallsizes,rangingfromverysmalltoverylargeenterprises.

TheInternethasleveledtheplayingfieldforcompaniesofallsizes,allowingcompaniestoseizeunprecedentedopportunity.

TheConnectedManufacturerPage2of11

DIGITALBRINGSDATAThedigitalagehasalsobroughtusaccesstoanunprecedentedvolumeofdata.ThevolumeoftransactionaldatastoredinenterpriseapplicationslikeEnterpriseResourcePlanning(ERP)solutionshaspresentedachallengetomanufacturersfordecades.Historicaldatashouldbeusefulindrivingtacticalandstrategicdecisions,butinthepastithasbeenmucheasiertogetdatainthantogetdataanddecisionsout.ButthevolumeofdatainERPpalesincomparisontothedataavailablethroughtheInternetingeneralandtheInternetofThings(IoT)inparticular.

DIGITALBRINGSIoTThroughtheInternetofThings(IoT),hugevolumesofdatacanbecollectedfromphysicaldevices,includingequipment,vehicles,buildingsandotheritemsembeddedwithsensors,softwareandelectronicsusedtoexposeandexchangedata.

WhiletheInternetofThings(IoT)hascausedahugestirinotherindustries,ithasbeenmetwithlessexcitementinmanufacturing.Manyfeelitisnothingnew.Manufacturershavebeencollectingmassivevolumesofdata(sensorsontheshopfloor)fordecades.ButfordecadesthatdatahasgonelargelyunderutilizedandhashadlittleconnectiontoERPsystemsusedtorunthebusiness.WhilewerelyondatafromERPtomakestrategicbusinessdecisions,mostofthesesystemshavebeencompletelydisconnectedfromthevastpoolsofdataavailable,notonlyfromthosesensorsontheshopfloor,butmorerecently,alsofromsmartproductsandotherexternalsources.

Weaskedsurveyrespondentstoour2016MintJutrasEnterpriseSolutionStudywhichaspectsoftheInternetofThings(IoT)hasthepotentialforthebiggestimpactontheirbusinesses(Figure1).

Figure1:WhichaspectofIoTwillhavethebiggestimpactonyourbusiness?

Source: Mint Jutras 2016 Enterprise Solution Study

WhiletheIoTmaynothavecausedabigstirinmanufacturing,86%seetheapplicabilityofittotheirbusinesses.Theyarealmostevenlydividedbetweenseeingthemostvaluefromcollectingdatafrom“smart”productsandtappingintothemoretraditionalprocess-relateddata.Weexpecttoseerelative

Definition of ERP MintJutrasdefinesERPasanintegratedsuiteofmodulesthatformstheoperationalandtransactionalsystemofrecordofthebusiness.Thisdefinitionallowsforsomeflexibilityintermsofmodulesrequiredsincedifferenttypesofbusinesshavedifferentneedsandtypicallymanufacturerswillrequireamorecomprehensivesetofmodules.

ThedigitalageandtheInternetofThings(IoT)havebroughtusaccesstoanunprecedentedvolumeofdata.

TheConnectedManufacturerPage3of11

importancevaryacrossindustryandproducttypes.Productswithembeddedelectronicsaremoreeasilymade“smart,”andthemoreautomatedyourmanufacturingprocesses,themoredatayoucanaccesstocontrolthem.

Butaremanufacturerseffectivelyutilizingthisdata?WealsoaskedthosethatseeapplicabilitytocheckoffallthedifferentwaystheyaretappingintotheIoT(Figure2).

Figure2:TowhatextenthaveyoutakenadvantageofIoTinmanufacturing?

Source: Mint Jutras 2016 Enterprise Solution Study

ThemostprevalentuseofdatamadeavailablethroughtheIoTisinapplyingbasicrulestoimproveefficienciesand/orquality.Thisisnotmuchdifferentfromhowsensorshavetraditionallybeenused–tomeasureandmonitorcharacteristicssuchastemperature,viscosity,gaspressureandcomposition–inordertopreventtheproductionofproductthatisoutofspecification.Earlyon,thisstillrequiredmanualintervention,withtechniciansactivelymonitoringreadings.Butovertime,moreautomationwasintroducedandnowbasicrulescanoftenbeappliedthroughprogrammingofthesensorsthemselves.However,withoutconnectivitybacktotheenterpriseapplicationsusedtomonitorandmanagethebusiness,thebestyoucandoisshutaprocessdownandsendthebusinessintofire-fightingmode.Withlittleornoconnectivityhowlongbeforeyourealizeyourplanhasbeensabotaged?

Ofcoursebydefinitionthis(IoT)dataisavailablethroughtheInternet,makingconnectivitypossible.Connectingequipment,devicesandproductstotheInternetisthefirststep.Figure2impliesmanymanufacturershavetakenthosefirststeps,butfewerhavecompletedtheconnectionbacktoconnectwithenterprisedatainsolutions(likeERP)toaidinvisualization,analyticsandmachinelearning.Thisiswhatisneededtoprovideacompletepictureandmakeproactive,predictiveandstrategicdecisions.

ButconnectingtheIoTbacktotheenterpriseapplicationsthatrunthebusinesstoimproveefficienciesisjustthebeginning.

Sensorsmightbeabletopreventbadmaterialfrombeingmade,butwithoutconnectivitybacktotheenterpriseapplicationsusedtomonitorandmanagethebusiness,thebestyoucandoisshutaprocessdownandsendthebusinessintofire-fightingmode.

TheConnectedManufacturerPage4of11

CONNECTINGFORADDITIONALREVENUEThinkabouthowconnectingtodevicesand/orequipmentcanleadtonewsourcesofrevenueorevenentirelynewbusinessmodels.Ifyousellequipmentthatmustbeservicedinthefield,doesthatconnectivityallowyoutomonitorhowandhowmuchitisused?Perhapsyourcustomeralreadycontractswithyoutomaintainandservicethisequipment.Canconnectivityhelpyouanticipateservicepartsandrepairs,helpingyoureducecostsandimproveservice?Canyouchargeapremiumforadditionalproactiveandprescriptiveservices?

Istherea“consumable”associatedwiththeequipmentlikefilm,inksortoners,orperhapspartsthatmustberoutinelyreplacedlikefilters,beltsandbatteries?Couldyouautomatethereplenishmentthroughremotemonitoring?Whatadditionalservicescouldyouofferthroughtheuseofdatacollectedfromsmartproducts?

Ifyou,themanufacturercantakeownershipofthisremotemonitoring,perhapsyourcustomerswouldlikeyoutoretaincompleteownershipandsimplysubscribetoyourservices.Whileanoversimplification,thisistheclassicrentversusbuydecision.Subscribingtoyourservicesrelievesthemofanupfrontcapitalpurchaseandthecostandriskofobsolescence.Anditprovidesyouwithrecurringrevenueandinvaluabledataonhowyourproductsareusedandhowwelltheyperform.

Manufacturersoflarge,capitalequipmentaren’ttheonlykindofmanufacturerthatcanfindnewsourcesofrevenuefromconnectivity.Thinkaboutthepossibilityofconnectingofficeequipmentlikeprintersorresidentialequipmentlikewaterfilters.Thesearelowerpriced(notcapital)itemsandyoupotentiallygetmorerevenuefromtheaftermarketsaleofinksandtonersorwaterfiltersthanyoudofromtheupfrontsaleoftheproduct…thatis,unlessyourcustomerfindsacheapersourceforthoseconsumables.

Somaybeinstead,yougivethoseproductsawayandsellaserviceandsubscriptiontotheconsumables.Andifthosedevicesaresmartdevicesconnectedbacktoyou,youknowexactlywhenandhowmuchtoshipandyoucanpersonalizetheservice.Thecustomeriswell-servicedandhappy,butmoreimportantly,acustomerforthelifeoftheproduct.Andatendoflife,youcanproactivelyupgradeorreplaceit.

Ofcoursethisdoesn’tapplyequallytoallkindsofmanufacturedproducts.Itmaybehardtomakefoodandbeverage“smartproducts.”Butevenwithconsumableconsumerproducts,whoknowswhatmighthappenwithsmartpackagingthatcouldsomedayautomatereplenishment?Farfetched?Therearealotofexamplestodaythatwouldhavebeencalledfarfetchedashortfewyearsago.

Thinkaboutservices,subscriptions,orautomatingthereplenishmentofconsumable(usage-based)productsthroughtappingintodatacollectedfromsmartproducts.

TheConnectedManufacturerPage5of11

DISRUPTORBEDISRUPTEDItisindeedthistypeofconnectivity,incombinationwithdigitaltransformation,thatincreasestheriskallcompaniesfacetodayintermsofthepotentialfordisruption.Weneedtobereadyforafuturethatisunpredictableatbest.

Thinkabouthowindustriesweredisruptedinthepast.ThinkhowdigitalphotographyimpactedgiantslikeKodakandhowpersonalcomputerscontributedheavilytothedemiseof(previous)marketleaderslikeDigitalEquipmentCorporation(DEC).Neitherofthesesamplecompanieswereprescientenoughornimbleenoughtotransformthemselvesintowhatwouldprovetobethenextgenerationofleadersintheirrespectivefields.

Butthis(riskofnew,innovativeproducts)isn’ttheonlyriskfacedtoday.Somethreatcomesfromentirelynewbusinessmodels.Ubertotallydisruptedthetaxiindustry.ThenewbusinessmodelbehindNetflixputBlockbusterstoresoutofbusiness.Neithersawthesenewbusinessmodelscoming.Whatifithappenedtoyou?Wouldyouhavetheintellectualagilitytoseeitasathreat?Wouldyouhavethetechnologyinplacetohelpyoumakethenecessarybusinesstransformationtoweatherthestorm?Orwouldyourlackofconnectivitybethefinalnailinyourcoffin?

Youdon’thavetocomeupwiththenextAppleWatchorbethegeniusthatthinksupwiththenextUbertobeadisruptoryourself.Allyouhavetodoisthinkaboutgrowingyourbusinessinotherwaysbeyondmakingandshippingmoreproduct.Ifyourproductsareconnected,thepossibilitiesjustmightbeplentiful.

Ifforexampleyoumakeandshipanytypeofindustrialormedicalequipment,largeorsmall,thinkaboutputtingsensorsonorinthedevices,connectingthemtothecloud,andmonitoringusage.Askyourselfthesequestions:

• Canyouusethisdatatoimprovemachineproductivityandreliability?• Ifthisislargeequipment,wouldyourcustomersbenefitfromturning

acapitalpurchaseintoanoperatingexpense?Ifso,don’tsellittothem,butinsteadinstallitattheirsiteandchargethemarecurringfee(subscription)tomaintainit,andperhapsevenoperateit(chargingforservices).Theyarerelievedoftheburdenofmaintainingtheequipmentandyouinsureitiskeptintopconditionuntilitistimeforanupgradeorreplacement.Andwhenthattimecomes,thereislowerriskofthemrunningobsoleteequipmentbecauseoflackofbudget.Furthermore,a(recurring)subscriptionisamorestableandpredictablesourceofrevenuetoyou.

• Istheaftermarketsaleofconsumableproductsorreplacementpartsasourceofrevenue?Wouldconnectingthesedevicesgiveyoumorereliableandpredictablesales,perhapswithlessornohuman

Allcompaniesfacerisktodayintermsofthepotentialfordisruption.Weneedtobereadyforafuturethatisunpredictableatbest.

Youdon’thavetocomeupwiththenextAppleWatchorbethegeniusthatthinksupwiththenextUbertobeadisruptoryourself.Allyouhavetodoisthinkaboutgrowingyourbusinessinotherwaysbeyondmakingandshippingmoreproduct.Ifyourproductsareconnected,thepossibilitiesjustmightbeplentiful.

TheConnectedManufacturerPage6of11

interaction?Ifyouknowwaterfiltersneedtobereplacedafterprocessingacertainvolumeofwater,theconnecteddevicecanautomaticallyorderareplacement.Ifyouknowhistoricallyhowmanygallonsareprocessedperweekorpermonth,youcananticipatetheorderandhaveitreadilyavailableinstock,justintime.IfyouconnectthisdirectlybacktoyourERPsolution,youcanmanageallofthisbyexception,withlittleornohumaneffort,freeingupyourpeopleforlessmundaneandmorevaluabletasks.

• Wouldyoubenefitfrommonitoringhowthosedevicesareused?Couldyouprovidevaluablefeedbacktoyourdesignandengineeringstaffwhilealsopersonalizingyourcustomerengagement?

Whilemostoftheseideasaresimplyvariationsonthebusinessmodelsyoucurrentlyuse,theseideasmightjustleadtoentirelynewbusinessmodels.Uber,NetflixandAirbnbdidn’tcreatenewproductsorindustries.ButtheycertainlyoperateunderentirelynewInternet-basedbusinessmodels.

Becausemostoftheexampleswehearabouttodayareconsumer-based,thetendencymightbetoignoretheimpactinotherenterpriseandindustrialsectors.ButevenmatureindustrialcompanieslikeGeneralElectricareexploringwaysoftappingintotheIoTfornewbusinessmodels.Itsnewenergybusiness(calledCurrent)isagoodexample.InsteadofsellingacustomerasingleLEDlight,thegoalisnowtoselllighting,notjustasaservice,butasapackageofenergy-relatedtoolsthatacustomercanusetoreducepowerdemands.

Asthedigitalagebringstheriskofdisruption,thebottomlineisthis:Ifyouaren’tseekingoutneworvariedbusinessmodels,youareasittingduckforthosethatare.

BECAREFULWHATYOUWISHFORWhileallthesepossibilitiessignalunprecedentedopportunity,onceyouenterthisbravenewworld,everythingchanges.Whilemakingandshippingproducthasneverbeensimple,withnewpricingandbillingmodels,orevencompletelynewbusinessmodels,itisgoingtogetalotmorecomplex.

Thinkaboutinvoicing–arelativelystraightforwardprocesswhenyoubuildandshipaproduct.Whenyoucombinesubscriptionpricing,consumptionand/orservices,itisnotsosimpleanymore.Doesyourcurrentsystemallowyoutocombineproductsales,servicesandrecurringfeesallonasingleinvoice?

Combiningallofthesemakescashflowprojectionsandrevenuerecognitionmorecomplex.Infactinmixingnewrecurringrevenueandaddingmoreservices,youarelikelytobesubjecttoloomingchangesinrevenue

TheConnectedManufacturerPage7of11

recognitionrulesasaresultoftheconvergenceofASC606andIFRS15(seesidebar).

Whiletheserevenuerecognitionchangesdon’tgointoeffectuntilthestartof2018,theywillhaveasignificantimpactonyourrevenueforecastsandperhapsevenyouroperations.Doesyourcurrentsolutionhandlethem?Ifnot,willitintime?Ifnot,youneedtobeconsideringareplacementnowinordertogiveyourselftimetoimplementandprepare.

Whilefitandfunctionalityhasalwaystoppedthelistofselectioncriteriaforsolutionsthatrunyourbusiness,thereisdangerincomplacency,believingthesolutionyouchoose(orchose)alwayswillmeetthoseneedswithoutchanging.Ifyoudoneedtoreplaceyourcurrentsolution,thereisevenmoredangerinmakingaselectionsolelyonyourrequirementstoday.Youdon’twantyourenterpriseapplicationslikeERPtobethereasonyoucan’ttakeadvantageofnewopportunities.Windowsofopportunityopenandcloseveryquicklytoday.Agilitybecomesjustasimportantasfunctionality–ifnotmoreso.

DIGITALPREPAREDNESSSohowwellconnectedaremanufacturerstoday?Digitalpreparednessiscriticaltoconnectivity.Weaskedoursurveyparticipantsasimilarquestion:Howwellpreparedareyouforthedigitaleconomy(Figure3)?Veryfewadmittobeinginveryearlystages,ornotpreparedatall,while26%havemadesomeprogressbutstillhavealongwaytogo.Howlongis“alongway”andarethe67%thatsaytheyare“gettingclose”oralreadytherereallyaswellpreparedastheymightthink?Wethinknot.

Figure3:Howwellpreparedareyouforthedigitaleconomy?

Source: Mint Jutras 2016 Enterprise Solution Study

Our2016MintJutrasEnterpriseSolutionStudylookedatdigitaltransformationfromtwoangles:theextentyourtransactionalsystemofrecordisdigitalandtheextenttowhichactivitiesareperformedand/ormanageddigitally.Thescaleweuseforeachofthesediffersslightly.

ASC 606 and IFRS 15 InMay2014,FASBissuedAccountingStandardsUpdate(ASU)2014-9,RevenuefromContractswithCustomers(Topic606).AtthesametimetheInternationalAccountingStandardsBoard(IASB)alsoissuedInternationalFinancialReportingStandards(IFRS)15,RevenuefromContractswithCustomers.Indoingso,thesetwogoverningbodieslargelyachievedconvergence.Theseconvergedstandardsforrevenuerecognitiongointoeffectthebeginningof2018forpublicentities,bringingverysignificantchangestofinancialstatementsandreportingforanycompanydoingbusinessundercustomercontracts.

TheConnectedManufacturerPage8of11

Adigitalsystemofrecordisaprerequisiteforconnectingdigitallywithyoursuppliersandcustomers.Intermsoftransactions,Table1showsoursurveyparticipantsranthegamutfromcompletelypaper-basedandmanual(i.e.definitelynotdigitalandnotconnected)tocompletelydigital,wheremanualinterventionwasonlyrequiredfor(digital)approvalsandexceptionhandling.Onestepdownfromthefullyconnected,wefoundacompletedigitalsystemofrecord(e.g.alltransactionscapturedinanERPsolution),butmanualdataentrywasrequiredtocapturethisdata.Yousettleforpeopletomachineconnectivityinsteadofmachinetomachineconnectivity.Anotherstepdownfromtherewasacombinationofpaperanddigitalrecords.

Table1:Towhatextentisyourtransactionalsystemofrecorddigital?

Source: Mint Jutras 2016 Enterprise Solution Study

IfyoucomparethepercentagesintheleftmostcolumnofnumbersinTable1(theaverageofthiscolumnis14%)tothe32%thatsay“Bringiton!”wequestionthereliabilityofself-assessmentofpreparedness.Youwouldalsoexpectthe35%thatsaytheyare“gettingclose”toatleastbeinthesecond(fromtheleft)column.Theaverageofthatcolumnisonly26%,sothat35%isnotverybelievableeitherandimpliesapercentageofthosesayingtheyareclosestillrelyatleastpartiallyonpaper.Whichmeanstheyaren’ttransactingdigitally.Theyaren’treally“connected.”

Butitiswhenwelookatthesecondaspect–theactivitiesthatcanbeperformedandmanageddigitally(Table2)-wherethecredibilityaroundpreparednessstartstoreallyfalloff.

Notonlydoweseearelativelyhighpercentageof“paperandmanual”inthistable,butweareveryconcernedoverthecontinuedrelianceonspreadsheets.Ofcoursesomeuseofspreadsheetsissimplytheresultoffamiliarityandcomfortlevel.Butthatdoesn’tmakeitanylesstroublesome.

Doyoureallythinkyoucansurviveinthedigitaleconomyifyouarestilldependentonspreadsheets?Howcanyoutrulyconnect?

NotethatthepercentagesacrossanyoftherowsinTable1donotaddupto100%.Theremainingsurveyrespondentsindicatedthesetransactionwerenotapplicable(N/A)totheirbusiness.

TheConnectedManufacturerPage9of11

Table2:Towhatextentaretheseactivitiesperformed/manageddigitally?

Source: Mint Jutras 2016 Enterprise Solution Study

CLOUDISANECESSARYCOMPONENTSowhereandhowdoyouconnect?GiventheInternethasenabledthedigitaleconomy,itonlymakessensethatthecloudisalogicalplacetoconnect.Cloudreferstoaccesstocomputing,softwareandstorageofdataoveranetwork-generallytheInternet.

Aswenotedearlier,theInternetlevelstheplayingfield,allowingcompaniesofanysizetocompeteonaglobalbasis.Cloud-basedsolutionsingeneralandthosedeliveredassoftwareasaservice(SaaS)inparticular,canbethegreatenablerofglobalgrowth.Nocapitalexpenditurerequired;noneedtobuildoutadatacenter,orevenputhardwareorahugeinformationtechnology(IT)staffincountry.Theaccessanytime,fromanywherenatureofacloudsolutionisconducivetosupportingdistributedusersandbringingupremotesitesrapidlyandeasily.Whilecyber-securityisanunderstandableconcerntoalltoday,SaaSsolutionprovidersnotonlydeliveraddedsecurity,butalsothepeaceofmindofbusinesscontinuityintheeventofadisaster,eithernaturalorman-made.

Butmoreimportantly,theInternetservesasagatewayformanufacturerstoconnectdirectlytodevices,customersandsuppliers.TheInternetenablesremoteaccessandinteroperabilitywithoutneedingtobuilddirectconnectionstoeachandeverypossiblesourceofdataandinteraction.Butthereislittlevalueiftherearefewparticipantsoperatinginthecloud.Ifthiswere(still)thecase,whowouldyouconnectto?Fortunatelythereissteadymovementtothecloud.

MintJutrashasbeenfollowingsentimentsandpreferencesfortraditionaldeploymentsversuscloudandSoftwareasaService(SaaS)formanyyears.Theshifttowardscloudstartedveryslowly.TenyearsagowedescribedERPasthelastbastionofresistancetoSaaS.Thosedaysarelonggone.

Cloud vs. SaaS Manyusetheterms“cloud”and“SaaS”interchangeably,buttherearesomeimportantdifferences.

Cloudreferstoaccesstocomputing,softwareandstorageofdataoveranetwork(generallytheInternet.)Youmayhavepurchasedalicenseforthesoftwareandinstalleditonyourowncomputersorthoseownedandmanagedbyanothercompany,butyouraccessisthroughtheInternetandthereforethroughthe“cloud,”whetherprivateorpublic.

SaaSisexactlywhatisimpliedbytheacronym.Softwareisdeliveredonlyasaservice.ItisnotdeliveredonaCDorothermediatobeloadedonyourown(oranother’s)computer.Itisgenerallypaidforonasubscriptionbasisanddoesnotresideonyourcomputersatall.

AllSaaSiscloudcomputing,butnotallcloudcomputingisSaaS.

TheConnectedManufacturerPage10of11

Figure4showstheprogressionofpreferenceoverthepastseveralyears.Thequestionposedtosurveyrespondentswasthis:Ifyouweretoselectasolutiontoday,whichdeploymentoptionswouldyouconsider?Respondentsareallowedtoselectallthatapply.Becausethisisahypotheticalquestion,notlimitedtothosecondutingasearch,wegetaverybroadperspective.

Figure4:Whichdeploymentoptionswouldyouconsider?

Source: Mint Jutras 2016 Enterprise Solution Study

We’repastthetippingpoint…SaaSisnowthethetopchoiceformanufacturers.Thecloudhasbecometheplacetoconnect.

SUMMARYThedigitalagehasarrived,andthereisnogoingback.Thisnewagebringsawholenewworldofopportunity,butwiththatopportunitycomesnewchallenges.Amongthosechallengesisthechallengetoconnect:

• Connecttooldsourcesofdata:Manufacturersmayhavebeencollectingmassivevolumesofdatafromsensorsontheshopfloorfordecadesnow,buthavetheytrulyconnectedthatdatatothedecisionsthatguidethebusiness?

• Connecttonewsourcesofdata:Canyoumakeyourproducts“smarter?”Canyouequipthemwithsensors,connectthemtothecloudandmonitorusage?

• Connectwithyourenterpriseapplications:BysendingthisdatadirectlytoapplicationslikeERP,youcanautomateprocessesandfreeuppeopleformorevalue-addtasks.Thistypeofconnectionisenabledbydigitaltechnologies,whichmostmanufacturersacknowledgeasnecessaryforsurvival.Legacysolutionswillbehardtoconnect.

• Connecttonewsourcesofrevenue:Thinkabouthowconnectingtodevicesinthefieldcanleadtonewsourcesofrevenuebyimprovingorsellingmoreservicesorautomatingthereplenishmentofconsumables.

TheConnectedManufacturerPage11of11

• Connecttoyourcustomers:Canyoucollectdataonhowwellandhowmuchyourcustomersareusingyourmanufacturedproducts?Canyouusethatdatatopersonalizeyourengagementwiththem?Canyouuseittoprovidefeedbacktodesign,engineeringandmanufacturingtoimproveyourproduct?

• Connectwithreality:Don’toverestimateyourdigitalpreparedness.Eighty-sixpercentofmanufacturersbelievedigitaltechnologiesarenecessaryforsurvival,butmanyfailtotakestepstoupdateorreplaceoutdatedtechnologiesinplace.Continuingtorelyonspreadsheetsand/ormanualprocesseswillcreatebarrierstoconnectingtoalltheseotherplacesandthings.

TheInternethasleveledtheplayingfieldglobally.Anycompany,largeorsmall,neworestablished,canpotentiallydisruptexistingmarketsorcreateentirelynewones,notjustwithnew,innovativeproducts,butalsofromnewordifferentbusinessmodels.Themostsuccessfulmanufacturershavelearnedtoexpecttheunexpected.Theyhavelearnedhowtobeagile.Theyhavelearnedhowtobeconnected.

Abouttheauthor:CindyJutrasisawidelyrecognizedexpertinanalyzingtheimpactofenterpriseapplicationsonbusinessperformance.Utilizing40+yearsofcorporateexperienceandspecificexpertiseinmanufacturing,supplychain,customerserviceandbusinessperformancemanagement,Cindyhasspentthepast11yearsbenchmarkingtheperformanceofsoftwaresolutionsinthecontextofthebusinessbenefitsoftechnology.In2011CindyfoundedMintJutrasLLC(www.mintjutras.com),specializinginanalyzingandcommunicatingthebusinessvalueenterpriseapplicationsbringtotheenterprise.