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.