Dynamics Matters Podcast Ep 59: How to create a modern manufacturing business

Welcome to episode 59 of the HSO Dynamics matters podcast.

Your regular sonic dive into the world of Microsoft technology related matters and much more besides.

I’m your host Michael Lonnon, and in today’s episode I took a trip into the Dataverse on the Starship Enterprise to locate Cloud Application captain Andrew Welch for a chat about why taking a platform first approach to technology will enable organisations to avoid the pain of custom development and long implementation cycles.

So, grab a brew, sit back, relax, and enjoy the show.

Michael Lonnon

We’re talking about technology and how it’s changed. And how manufacturers can adopt this changing technology platform to create or remove the boundaries of the manufacturing process. A process largely based around producing a ‘thing’ with a specific need or a set of uses. But with an agile platform like dynamics, built data first, where the constrictions are removed, how can manufacturers take on this new technology to change the way they manufacture things?

Andrew Welch

I think in your intro to this idea, you made a good point and that’s the ‘a thing’ concept. So, think of traditional software development, implementation deployment, whatever a manufacturing company, or really any organisation, in the past has said, hey, we have a need, we need to solve ABC problems and we’re going to go out and we’re going to source and acquire and implement a software application that solves that problem. That’s very much using a mould approach. A mould makes one thing, we’re going to solve one problem with the thing we’re going to make. Think of the platform as a lathe from taking a platform approach, what you’re basically saying is I want a tool that is going to help me solve numerous problems now and in the future. So, a little bit of that is future proofing, but a lot of that is selecting a set of tools that is going to be flexible, to meet the need and to fabricate the thing that you have now and the thing that you need to fabricate in the future.

Michael Lonnon

So, it removes parameters and barriers, and the only thing that you are limited by really is your imagination.

Andrew Welch

Yeah, I think that’s an interesting way to put it, limited by your imagination. Also it makes financial constraints less of a limitation. In the old way of solving a problem with a software or an IT enabled solution was to source a product or custom develop something and bring that into your business that was extraordinarily cost prohibitive in a lot of cases. So that tended to have the result of saying our most important workloads, or our most important business challenges, the 10% most important things are going to be solved with costly long term software implementations and the remaining 90% of problems are going to be solved with a spreadsheet or an access database or a piece of paper and a clipboard. What the platform approach does is it does it does two things. First of all, it drives down cost of developing and implementing software products and software solutions to solve those 10% most important problems. So, it drives down those costs. So that injects additional money back into your budget to solve the remaining 90% of problems, which, by the way, the cost of solving those has also been driven down. So just to share a few examples you might be in a manufacturing setting, you might say we’re going to perform our safety inspections on heavy equipment, for example, we’re going to perform our safety inspections using clipboard and paper because we simply can’t afford to build an app to do that, because we have all of our IT budget tied up in these other apps. But with a platform first approach you can.

Michael Lonnon

How can manufacturers adapt to this change in the way technology is removing barriers? Is it relevant to all manufacturers, it seems like a no brainer, so why aren’t all manufacturers already adopting some of this more flexible technology?

Andrew Welch

I get asked this a lot and I think there’s a few barriers that can be overcome but they require a change of mindset. One of them is an accounting barrier. It’s about how money in most organisations – and this is not limited to manufacturing – how money in most organisations gets allocated to software or to IT projects. Their money tends to get allocated to solve very specific problems rather than the 10%. It’s about the accounting challenge, taking a platform approach requires that you allocate funds to build a foundation, bring the technology in, make sure that it’s governed correctly and secured correctly. Essentially, to set up your software assembly line in advance so you don’t find yourself down the line paying for every individual piece of software, you want to chuck out at a problem. So, you invest a little in your manufacturing processes and capability upfront and that drives down the cost of future application development. When I say it’s an accounting problem, it mostly just amounts to how are you going to allocate your funding upfront versus app by app by app and that’s not a way of thinking that most organisations have embraced yet.

Michael Lonnon

From a manufacturing perspective, perhaps one of the barriers is the fact they’ve got to keep products moving, they can’t stop, they can halt production, because it impacts profits. So are they too short term focused because it’s quite a scary thought, isn’t it? You’ve gone from fixing particular problems – the 10% – and now you’re saying well actually we are going to come at this from a fundamentally different way of operating your manufacturing process. Do you think they’re stuck in a mindset?

Andrew Welch

I think that it is terrifying for most organisations and that’s not limited to manufacturing, so anyone who’s listening to our conversation should not be thinking, oh, my God, this is a problem unique to me. It’s a problem unique to almost all organisations because business can’t stop. We’re trying to modernise business activities in place so they don’t stop, and then they can be improved incrementally over time. What I tell CIOs is it is scary, but the alternative is even scarier. The alternative is a lengthy multiyear implementation process to solve one set of discrete problems. That’s very expensive and you’re betting a lot on the outcome of that engagement. And you’re hoping that on go live, it’s all going to work out. If you can make the leap into platform first, you can get more incremental value, and you can do a lot for your risk tolerance, but you have to make the leap.

Michael Lonnon

Where would you suggest starting then before that leap, or when you’re having conversations with CIOs and what do you advise to them?

Andrew Welch

I’ll take it from the CIO perspective first, from the IT perspective, it’s all about building your minimally viable, or I call it the first horizon platform infrastructure. From a technical perspective do you have the platform management monitoring administrative tools in place, and have you suited them for their purpose. And are they all moving in the same direction? Other aspects to consider is enterprise architecture, application lifecycle management, security, and then what I call user empowerment. User empowerment being, how are you going to support your users and create the cultural conditions within the organisation that they’re going to be able to thrive in this new cloud landscape. Collectively, we refer to that bucket of things as enterprise management. So that’s the from an IT perspective, how can we create the conditions for this transition to be successful? I also tell CIOs, in order to be successful, you can’t make this a tech or an infrastructure or governance led thing. You have to engage your business counterparts in an exercise of road mapping. What are the business problems we’re going to solve with this new approach? What are the best and most appropriate problems to solve first so that we can pick up some wins, so that we can demonstrate the value of this thing, and so that we can measure whether or not we’re being successful with it. So almost all organisations who embark on this either take a very business heavy approach, or they take a very IT heavy approach. It works best if you take a more balanced approach between the two.

Michael Lonnon

Because ultimately the users themselves are the ones that are going to dictate whether it’s a success because they’re using it. They’re advising and guiding and that’s what the CIO is basing their decisions on.

Andrew Welch

Exactly.

Summary

The spectre of long technology implementations and disruptive and costly change to solve one discrete set of problems hangs over any modernisation project. It’s enough to make any CIO think twice.

But according to Andrew Welch, modernise you should. Because by taking a platform first approach you’re effectively building for a future that reduces the need for such heavy-handed projects. You’re building for what he calls a first horizon platform infrastructure – gaining lots of incremental value and reduced risk tolerance.

But first of all, Andrew advises that for any project to be a success, you must first engage all lines of the business. Projects cannot only be led by IT.

Thanks for listening, until next time, take care of yourselves.