Role of Technology in Business Transformation

Ravi Sudalaimuthu June 9, 2015

This blog will discuss the role technology plays in shaping business transformation. The scope is vast from manufacturing technologies to information and digital technologies. The manufacturing world is experimenting with Industry 4.0, Smart Factory, Robotics and 3D Printing, Big Data, Internet of Things, Advanced Analytics, Cloud Computing, Mobility and Social Collaboration. This blog will take a look at some of the developments.

First, let us define Business Transformation.

Business Transformation

Business Transformation is about making fundamental changes to how business is conducted in order to help cope with shifts in market environment. Harvard Business School Professor John P. Kotter outlined in an article how business transformation can be achieved through eight critical success factors. (Source: https://hbr.org/2007/01/leading-change-why-transformation-efforts-fail/ar/1). Reading his insights, it is not so hard to come up with a similar set of critical success factors for information and digital technology to aid in business transformation. Some of these factors are:

governance_objectives
  • First, technology should align with the business strategy and goals;
  • Technology should be agile and responsive to the changing needs of the business;
  • Technology should adopt to the changing employee preferences including how they engage with enterprise data.

The Role of Technology in Business Transformation

The underlying theme, in the previous section, is that technology should align with business, people and processes. There are many enabling technologies, frameworks and solutions to make that happen. In this blog, we will review:

  • COBIT® - an IT Governance Framework
  • SCOR®  - a Supply Chain Framework
  • Mobility and Collaboration Technologies

IT Governance and Management using COBIT®

COBIT® is one solution that brings alignment between business, technology, people and processes.

Business is incredibly complex and dynamic, today, as is the IT environment needed to support it. There are 36 core processes in IT, alone, currently!  The business of IT requires proper governance and management, but, these practices and objectives have no meaning if there is no alignment to business strategy and goals. That is where COBIT® can help. It is an IT Governance and Management business framework developed by ISACA®.

COBIT® translates the Stakeholders needs into Governing Objectives. These objectives are developed with a focus on value for the enterprise through: Benefits Realization, Risk Optimization and Resource Optimization. For example, if the business objectives establish that the enterprise does not engage with OEM customers, it is a fair to assume that EDI technology solutions is not expected to play a major role.  

When implementing COBIT®, there will be an exercise to align all the IT goals to the  Enterprise goals. These goals are in-turn aligned with the 36 core processes in COBIT®. It should be noted that several COBIT® processes and practices touch the technology topics and tell the implementer what needs to be done.

For complete information on COBIT®, please visit www.isaca.org.

SCOR®

As COBIT® is to IT governance and management, SCOR® is to Supply Chain Management. SCOR® stands for Supply Chain Operations Reference. It is the cross industry de facto standard covering Strategy, Performance Management and Process Improvement for supply chain management. It is owned by the Supply Chain Council® and APICS®. 

SCOR® Level 1 addresses the supply chain processes through six process domains.  They are: Plan, Source, Make, Deliver, Return, and Enable. Levels 2 and 3 are developed by SCC members all over the world covering varied characteristics of a supply chain. Level 4 is specific to each company implementing SCOR® allowing each to express their unique processes. 

For example,

  • The Level 1 Make process has Level 2 processes: Make-to-Stock, Make-to-Order, and Engineer-to-Order. Make-to-Order
  • The Level 2 Made-to-Order has Level 3 processes: Schedule Production Activities, Issue Product, Produce and Test, Package, Stage, Dispose Waste, Release Product.

              (Source:  Google “SCOR Overview.pdf from Supply Chain Council of APICS”)

SCOR® Performance Framework

SCOR® also provides a performance framework to measure supply chain performance. The metrics are diagnostic and offered under 5 attributes: Reliability, Responsiveness, Agility, Costs, and Assets.   

An example of the SCOR® Performance Measurements:

Under the Reliability attribute, you will find that you can measure Perfect Order Fulfillment at the highest level.

If more diagnosis is necessary, you can measure Perfect Order Fulfillment at Level 2 using the following metrics:

    • % of Orders Delivered in Full
    • Delivery Performance to Customer Commit Date
    • Documentation Accuracy
    • Perfect Conditionscor_metrics
 
At Level 3 - “Delivery Performance to Customer Commit 

Date” (from Level 2) can be further broken down to:

  • Customer Commit Date Achievement Time
  • Customer Receiving
  • Delivery Location Accuracy

For a partial view of the SCOR® Metrics, please see the table (Figure 1)

Additional SCOR® Provisions

SCOR® also provides best practices references. Additionally, SCOR® addresses the needs and issues surrounding skills management for supply chain professionals.

The technologies that enable SCOR® includes solutions, such as: ERP, SCM, and Advanced Analytics. Out-of-the-box solutions for metrics are hard to come by and require in-house development or outsourcing.

SCOR® framework directs both business and technology to come together and points out where and how the alignment happens. When business changes or transforms, the SCOR® framework will highlight what processes are impacted.

For complete information on SCOR®, please visit http://www.apics.org/sites/apics-supply-chain-council.

Mobility

Traditionally, the corporate workforce performed their work using desktops and laptops. For the most part, they still do. The laptop, wireless internet and VPN help them access Enterprise Applications from anywhere and anytime. As this trend has taken root in the workforce, employees expect more and more. Now, laptops are being replaced by IPADs and smart phones, connecting VPN is thought to be an inconvenient but necessary evil. Employees lose patience at the thought of having to go through the time consuming steps to get at the information they need. The expectation of instantaneous data consumption is a "new" paradigm thanks to: Facebook, Twitter, Google Search, Outlook Emails etc.

Enterprises now look for real-time information delivery of notifications of events and messages. It is no longer sustainable that the employees can act on these events when a connection is available or a download occurs or he/she is in the office. The passing of time between an event occurring and employee awareness of the event is “dead time”. The ‘Employee wants access to info when they want it” and the “Enterprise is providing access instantly”. For example, an approval request by an employee from his/her manager may need instant attention. Expectations of shorter response and turn-around times are ever increasing.

Welcome to mobile computing!mobile_tech_and_people

The manufacturing world is embracing mobile computing. ERP, SCM and CRM vendors are also scrambling to port more of their product functions onto mobile devices.

We have journeyed far into the world of mobile computing. In the recent past, Sales and Field Service personnel were thought to be the only beneficiaries. However, it just takes a little creativity to determine what other parts of the Enterprise may benefit from mobile computing.

The following points should stir up your creative juices, as you consider other beneficiaries. (Clue: Almost anyone in the Enterprise can benefit).

  1. Physical distance between user and system

If the user is frequently away from the assigned station or constantly on the move, there is a strong case for mobile computing to improve effectiveness.

Examples: Senior Management, Sales, Field Service. Just push your creativity a notch higher, you may include Picking, Shipping and Logistics etc.!

  1. Intermediate copy, duplicate or transformations steps

A business process may have a step that prints a report or list directing a user to take action using paper based reports. An example is the pick list. This is usually necessary because the user may not have access to the system when he/she is picking items. The actions are written on the paper for further system update later by someone else. These are all wasteful steps. To identify this type of waste, ask this simple question: If the user does not have access to the system at the point of action and/or is using paperwork to do the job, then a mobile solution may help expedite the process.

  1. Visualize the work

Employees typically better comprehend information presented visually using graphics and charts versus text or a lengthy report.

Example: Metrics tracked and presented visually provide a better “big picture” of the organization’s achievements compared to defined plans and objectives.

  1. Time elapsed between event occurrence and user action – dead time

Delivering event notifications and tasks to the employees’ personal devices garners their attention, instantly, to drive action. In traditional computing environments, users must check system screens frequently to see if any and what type of actions are required.

Example: Time sensitive approvals, like a purchase order (PO) request, delivered on the supervisor’s personal device will likely make the approval faster. Traditionally, supervisors would receive an email requesting the approval with attachments. This would result in an inefficient process. Even if approved in an email, further technology integration and automation were necessary to update the PO electronically with the approval. The mobility solutions directly present the context, associated records and update the Enterprise system data and processes automatically.

  1. Transcend technology, organizational barriers

Mobile applications may be the best ‘neutral’ ground to connect with suppliers. The Enterprise's choice of technologies and the Supplier(s) choice of technologies may be very different and integration may be tedious. However, mobile computing can provide a common interface for both. The same case can be argued for your customers, too.

Example: Provide E-Catalogues to Customers. Replace printed catalogues and web-based catalogues. The engineer, in a customer organization, may prefer browsing catalogues in a mobile application on an iPad. Electronically updating the information is easy and, therefore, the customer will always have easy access to the most current information.

  1. Critical tasks with shorter entry or clicks

Any transaction that requires a few short clicks and button pushes may be the best candidates for mobile computing. The expected actions can be pushed to the mobile devices. This allows the employees to take prompt action even if they are in meetings or traveling.

IT organizations need to govern and manage Enterprise Mobility through such applications as Enterprise Mobility Management (EMM). They also need to have a plan for developing mobile applications if the product vendors do not evolve or keep up with their needs to support a mobile workforce.

Social Collaboration

A Harvard Business Review article states that “An organization’s time, in contrast, goes largely unmanaged. Although phone calls, e-mails, instant messages, meetings, and teleconferences consume hours in an executive’s day, companies have few rules to govern those interactions. In fact, most companies have no clear understanding of how their leaders and employees are spending their collective time. Not surprisingly, that time is often squandered—on long e-mail chains, needless conference calls, and countless unproductive meetings. This takes a heavy toll. Time devoted to internal meetings detracts from time spent with customers. Organizations become bloated, bureaucratic, and slow, and their financial performance suffers. Employees spend an ever-increasing number of hours away from their families and friends, with little to show for it.” (Source: https://hbr.org/2014/05/your-scarcest-resource).bill_gates_quote

When the interaction that begins with two people becomes a ‘collaborative’ effort dragging multiple people for resolution, as often happens with cross-department functions, context is reestablished for every new user added to the thread. Bringing everyone up to date is a time consuming act. Emails may help to some extent but if subject line change or previous messages are truncated, context is lost. Often attachments are not forwarded or phone conversations are not available to new participants.

Today’s Enterprise Solutions help employees, suppliers and customers “collaborate” and ‘socialize’ in the business sense. These applications enable chats, including: context and content to the Enterprise Applications.  Visuals, screen short and documentes, can be included in the chat. Logical groups can be created and members added as needed. Conversation histories are instantly available as new members are added and as time elapses. Since the application tracks context, content and links - emails are not required. This is useful because emails users might truncate messages or change the subject affecting the ability of others to understand if joining the conversation thread, later. Since links are provided in the chat, drill downs enable the user to quickly jump to the ERP and other applications to see the details.

These conversations are secured and are accessible from mobile devices, as well.

Social Business Collaboration tools eliminate wasteful steps and efforts, providing a central place for employees, suppliers and customers to collaborate and share.

Another compelling reason for using Social Collaboration technologies is that it also provides structure for non-ERP, non-Enterprise Application tasks. For example, Enterprises may not have an application for managing Employee On-Boarding. Social Collaboration applications allows you to set up templates for those standard ‘streams’ of conversation or collaboration. In these templates members and ‘work-flows’ are defined. It is easy afterwards to manage these once unstructured conversations making them visible to everyone.

Other Technologies in the Business Transformation

The industry is experimenting with and realizing success applying new Technologies such as Big Data, Industry 4.0, Smart Factory, Advanced Analytics, Internet of Things, 3D-Printing and so on. In future blogs, we will elaborate on these topics and the impact on Business Transformation initiatives.  

Conclusion

If you would like to talk, please reach out to me or our team of consultants here at Barry-Wehmiller International. Please join us in Hartford, CT, June 11th. I will be presenting at our upcoming Manufacturing Excellence Symposium or feel free to contact me at ravikumar.sudalaimuthu@B-WI.com . Wishing you success in all of your endeavors!

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About B-WI: At Barry-Wehmiller International (B-WI) we are proud of our remarkable journey, a journey we began 20 years ago to become who we are today – a trusted, global, people-centric, ‘Total Solutions’ provider with a rich heritage in manufacturing. We take particular pride in our people-centric culture and values. 

We have built a strong foundation, we are here to lend a hand and be a guide to our customers with our specialized consulting, technology, engineering and manufacturing talent. We were there then, we are here now and we will be there with you into the future. Welcome to Barry-Wehmiller International.

raviAbout the Author: Ravi Sudalaimuthu is pleased to represent Barry-Wehmiller International, as Accounts Manager. B-WI provides consulting and services for manufacturing, engineering, ERP solutions, and specialized development and support services.

 

Topics Competitive Advantage Business Transformation