The Connected Manufacturer Final - Oasis Solutions€¦ · THE CONNECTED MANUFACTURER THE DIGITAL...
Transcript of The Connected Manufacturer Final - Oasis Solutions€¦ · THE CONNECTED MANUFACTURER THE DIGITAL...
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.