Tech analysts have been bullish about increasing spend across the course of this year, with Gartner predicting businesses will invest $4.2 trillion on IT by the end of 2021.
While it’s encouraging to see budgets continuing to rise, simply ‘spending more’ does not always necessarily mean that a business will get more value from their technology investments.
The manufacturing industry is a great example: many organisations are resigned to the fact that they are being metaphorically held hostage by existing IT vendors, with no way to escape. It’s not uncommon to see large sums of money being committed towards enterprise applications from specific vendors, even though when it comes to it, they are unable to capture all the promised benefits.
In many instances this single-vendor approach creates a recurring chain of events where the aims of the project objectives are ultimately never met. This builds up gradually over several years, and although it may not be immediately apparent, it can still linger in the underbelly of an organisation.
Once locked in place over a long period, employees can start to experience a kind of Stockholm syndrome, developing positive feelings towards their ‘captor’ and seeing the world from their point of view. This means the chances of breaking the cycle become even lower than they might be from an objective standpoint. This results in many manufacturers having their hands tied, unable to reap the benefits of more modern systems that are necessary to achieve today’s digital transformation requirements, as part of an Industry 4.0 strategy.
An outsider looking in might wonder why large companies are not capable of implementing a more appropriate enterprise application. At a first glance, you might assume insufficient budgets or a lack of technical expertise is forcing manufacturers to keep using systems that are not fit-for-purpose. However, the reality is that members of senior management teams are often stuck in a repetitive cycle. They continue to engage in relationships and networks that they have relied on for years, and continuing to allocate the same budgets to the same suppliers.
It is not uncommon that companies spend millions of dollars trying to make an Enterprise IT Solution square peg fit into a round hole. The technical debt created form these activities can leave companies unable to quickly adapt if at all to new and unexpected business challenges. This in itself can and often threatens the very survival of the company.
Others in the business know there is a better solution out there, but internal hierarchies mean that they will struggle to act and cut suppliers loose. This can create a challenging political battle of wills, with some team members attempting to persuade budget holders and management to leave long-standing enterprise solution provider relationships for more specialist vendor offerings.
The more you dive into this issue, one theme becomes clear. It is not an entrenched form of company culture and attitude, but more of a coping mechanism people use. Those placed in highly stressful, decision-making roles will often embrace the larger vendors as a friend or a trusted advisor. By choosing to believe that everything will work out, their condition becomes more manageable.
We need revolution, not evolution
What challenges lie in wait for these manufacturers who are stuck with these legacy enterprise applications? One of the problems they find is that many applications have evolved over time away from their accounting application origins that ran on an accounting-centric data model. This leaves users with tools that are not well fit for purpose, nor do they even match specific job requirements.
Even though many of these legacy application vendors have addressed usability issues, they often still lack the framework or architecture to meet the adaptability requirements of modern-day businesses.
How do you break the cycle? The first step is to take an ‘outside in’ perspective. What would a prospective new hire think if they understood the internal systems challenges and lack of modern application investments? Given the challenges manufacturers face in attracting new talent, there might be another perspective that could help change traditional internal perspectives.
If management is shown how to improve employees’ ability to do their jobs, and more widely improve the performance of business processes with new systems and processes, maybe then the cycle can be broken. This means it is crucial that decision makers are shown the direct impact they could have on the business, whether that’s improved supplier quality management or real-time visibility over operations.
Fight for your survival
At the end of the day, most businesses are driven by a combination of profit and survival. Most of them can overcome their dependence on a single vendor thanks to the increasingly open and interconnected nature of technology. Many have also become acutely aware of the importance of adaptability based on a shift to survival mode during the pandemic. It’s those businesses and solutions providers that were able to work together and adapt that now stand to be the long-term winners.
About the author
Evan Sloss, EMEA Director at iBASEt
Evan Sloss brings close to 25 years of manufacturing, sales, and business development experience to the iBASEt leadership team. As Director, EMEA, he is responsible for driving new business activity across Europe, the Middle East, and Asia. His expertise lies in driving new business opportunities in the Manufacturing Execution System (MES) and Maintenance, Repair, and Overhaul (MRO) markets. He began his career in Product Development within the heavy equipment sector.