Ronald Teijken of Sterling Commerce looks at how technology can improve business performance.
I have recently had the opportunity of speaking to a number of CIOs from the manufacturing, logistics and distribution industry in the UK about how they were planning to advance their businesses this year. It was re-assuring that while economic concerns were at the forefront of their agendas, this was firmly connected to strategies for growth.
One key point which kept being emphasised was that CIOs in these sectors are increasingly becoming part of the strategic and commercial conversation in leading organisations. The IBM 2011 CIO survey released this week also further emphasises this point, highlighting that for the first time, the CIO’s vision of the future is almost identical to that of the CEO. Together, their top three focus areas are strengthening relationships with customers, developing the skills of employees and gaining insight and intelligence from data.
Technology will play a massive role in achieving this vision and CIOs across all industries, not just manufacturing, will be looking to use technology to improve business performance and empower growth, by providing visibility into actionable information across their key IT and business processes.
However, we all know that technology alone can’t solve problems. The underpinning strategy has to be right, as well as the processes and the cultural attitude and approach.
Growth is back on the agenda
As these manufacturers look to the customer base to facilitate growth, they are also examining what internal and external processes require attention in order to support growth, or areas to fix growth inhibitors.
One of the primary challenges for the CIO is scaling technology to manage the many sizes of organisations and complex trading relationships that exist across their supplier base. Uncertainty in the supplier network, whether based on lack of information or volatility, impacts promises to customers and therefore restricts growth. However, this is where two particular technologies come into play: cloud computing and automation.
The conversations I had with these CIOs revealed that whilst supplier relationships are fairly well automated with their “top 20 trading partners”, they are looking at the remaining 80 percent of the supplier base to see how opportunities for cost savings and efficiency gains could be achieved. A flexible integration strategy will not only automate trade with partners, but will also connect them to a robust internal infrastructure.
Maximising supplier collaboration
An ideal solution to maximise supplier collaboration would be to create a vendor hub for all suppliers, who will vary in technological capability. Larger suppliers will often have systems in place that can be more easily adapted to and integrated with. Smaller suppliers however may argue that their infrastructure may be an issue, and therefore support for on-boarding suppliers or setting up web-accessed portals will enable better integration and automation. This single hub enables all suppliers to be linked into the processes that span multiple systems and multiple lines of business in your organisation. While there has typically been a great deal of investment in automating and improving customer interactions there are still significant opportunities to fine tune these areas and provide additional value to customers within the Manufacturing, Logistics and Distribution environment. The two primary areas for improvement, according to most CIOs within these sectors focus on:
1. Using information to be more “pro-active” with customers
2. Leveraging e-commerce to expand offerings and reduce processing and customer handling costs
Many organisations now need to deal with the challenge of turning the increased amount of data from their newly automated customer relationship initiatives, into real, actionable information that adds value to customers.
While it is clear from the above that supplier relationships and meaningful data are key to business success, technology is the enabler. The winners are those companies that understand the power of technologies like cloud, automation and integration, and can harness that power to transform their businesses. This is where the role of the CIO is so important as they now have the knowledge, and the leadership, to implement business strategies based on these technologies.
* Ronald Teijken is director of industry marketing, manufacturing and logistics at Sterling Commerce, an IBM company.