The manufacturing industry might have been slow to adopt cloud-based technologies, but the benefits are now widely recognised, with many companies relying on it to automate processes and drive efficiencies. In fact, you can’t move in today’s technology driven world without hearing the term ‘cloud’. It provides the foundation for the way we run our lives both at work and at home—so much so that the term itself is almost redundant.
Although cloud is an accepted part of everyday operations within the manufacturing industry, making the most of it can still be a challenge, and leading to many businesses using it, but not necessarily unlocking its true potential. According to recent research, a staggering 84 per cent of those within the manufacturing industry view investment in the cloud as hugely important in delivering their overall growth strategy. However, despite this, only 17 per cent consider cloud a strategic investment, with only a third (31 per cent) saying they make significant use of cloud applications today.
Levelling the playing field
With traditional manufacturers often steeped in legacy, on-premises technology, the advent of cloud-based platforms provided a cost-effective and smooth way to embrace digital transformation and transition from outdated systems to innovative applications. It levelled the playing field and gave companies of all sizes the ability to compete—whether they were a new kid on the block, whose systems were born out of agile and scalable technology platforms, or a traditional manufacturer who was investing in the cloud to keep up with old adversaries and new counterparts.
Today, spending on public cloud services is still a huge growth area for manufacturing, with IDC predicting that discrete manufacturing in particular will spend more than $20 billion on it this year—accounting for more than one third of the worldwide total spend. Process manufacturing will spend an estimated $15 billion. With so much being invested in cloud-based services, it is vital to get the most out of every penny spent.
Look before you leap
Cloud technologies are certainly accessible and more affordable. However, is the ease with which manufacturers can get up and running with new technology and applications coming at a cost? With cloud being the ‘new normal’, is the industry in fact leaping first and looking later? For all the benefits it can bring, unless cloud technology is adopted in the right way, businesses will struggle to make the move towards digital transformation work.
Gartner suggests that despite cloud being one of the most valuable innovations in current IT and business strategies, it can fail to live up to expectations and is often misunderstood. The analyst firm predicts that as a result, through 2020, 95 per cent of cloud security failures will be due to customers not understanding cloud security, or the skills necessary for successful cloud implementation. This sentiment is reflected in research, with a quarter (26 per cent) ¹ of the people admitting they lack understanding when it comes to cloud technologies.
Getting the most out of investment
The cloud is not simply about being able to compete, but to differentiate. However, there is currently a gap between using and really utilising all of the benefits afforded by cloud, in order to make this ideal a reality. Key steps need to be taken to help get the balance right between enabling innovative technologies and using the cloud to your advantage. This can only be done from a position of trust and knowledge, to take cloud-based services from playing a purely functional role to becoming a strategic part of business success and growth.
Understanding the potential is vital in reaping the benefits. As well as providing business agility and the ability to adopt innovative technology fast, using a cloud-based model can improve operational visibility, analysis and insights. This means that manufacturers can react more quickly to changing market conditions and customer demands, as well as make business decisions based on deeper insight not just intuition.
Taking enterprise resource planning (ERP) as an example, a cloud-based solution not only provides flexibility and scalability but can also empower IT departments to support more strategic growth initiatives by giving them time to focus on more value-added tasks. Keeping pace with innovation can be easily achieved with upgrades to services taking place quickly and with minimal upheaval.
Metal-Tech Partners is just one example of a company who has used cloud-based ERP to help transform and grow its operations—from a supplier of telecommunications products, to a multi-million-dollar business, providing custom-manufactured parts and services to an international audience. The modular system provides end-to-end scalability and flexibility to meet the company’s demanding needs. Any new information or changes take immediate effect through the system—providing up-to-date customer, operational, and financial visibility across the organisation.
However, managing any change should also be high on the agenda to ensure it achieves business objectives. Getting buy-in and making sure users understand the technology and how to get the most out of it is vital. As well as unlocking value to aid business growth, using cloud-based services can also help companies realise environmental obligations, by harnessing the collaborative power of the cloud and saving energy as a result.
Adopting cloud is just the first step. Unlocking its potential is where the real value comes in.
Kerrie Jordan, director of cloud product management and product marketing, Epicor Software