Are IT leaders in Manufacturing & Consumer Products Keeping Up With Change, Technology And Disruption?
Organisations must work around the clock to deliver cost-effective, quality products and services before their competitors - or they risk losing out on crucial revenue and market share.This is especially relevant for large organisations, such as the ones that we surveyed (see below), as they are not only having to increase the speed at which they are doing things to keep their customers happy, but they are also trying to match or stay ahead of the offerings from disruptive and agile competitors.As a result of all of this, companies are continuing to undergo vast amounts of change, especially in the area of technology, and in this year’s survey we look at how they go about managing this change and make recommendations about what improvements they could consider making.Many issues will need to be addressed sooner rather than later by large organisations, or they seriously risk missing out on valuable business opportunities to those who have a different mindset, appreciation of IT and attitude to risk. Below, we have focused on responses from the Manufacturing and Consumer Products respondents from our cross-industry 2019 CIO and IT Leadership Survey to see what conclusions we can draw from these sectors and provide practical recommendations in the areas of Strategic Change, Technology Adoption and Disruptive Technology.
The importance of strategic organisational change cannot be downplayed. After all, if you are standing still not making any changes, then you are essentially going backwards.However, it is crucial that the change is being made for the right reasons and that it is being implemented using a delivery method that suits the employees or department responsible for managing the change. The necessity for an approach that suits the individual organisation is clearly portrayed by the survey results, whereby a variety of different methods are being used.
- Only 13% of Manufacturing and Consumer Products respondents report that all of their organisation’s strategic IT change projects have met initial objectives over the last two years
- Respondents are equally likely to be using a waterfall model, with elements of agile principles in delivery (38%), as they are to be using a fully agile and product-focused approach (38%) for delivering the majority of their strategic IT change projects
- While increasing operational efficiency is the most commonly (41%) reported driver of strategic IT change projects by respondents, around a third are driven by gaining a competitive advantage (34%), and/or new product or market development (31%).
Figure 1: “How are the majority of your strategic IT change projects delivered at your company?” only showing data for respondents from the manufacturing and consumer products sector"
Reviewing the survey answers, we can consolidate this into three clear recommendations for any organisation:
- Focus on good IT/business relationships and establishing clear links between IT services and business outcomes to drive buy in and help shape business plans
- Review corporate attitudes to risk and seek to establish areas where a different approach could help improve services. Define metrics / measures to help mitigate high risk through the use of fail-fast and ‘test and learn’ mentalities
- Continue to develop an enterprise view on the benefits and impacts of agile, agile ways of working and clear decision criteria for assessing appropriate change methodologies.
Technology and Methodology Adoption
- Similar to the ability to effectively implement strategic change, the ability to adopt and deploy new technologies is vital to the success of large organisations. But it is also a process that is challenging, and often approached in a haphazard manner.
- 38% of Manufacturing and Consumer Goods respondents look to adopt as soon as possible, even when the technology is untested. This figure is considerably higher than the overall total (21%)
- 44% look to adopt technology after it has been tested in the marketplace
- This demonstrates that organisations from this sector are seeking an advantage wherever they can find one, even if it means trying out unproven technologies
- Almost four in ten (38%) report that the company being risk averse is a barrier to the adoption of new technologies, and same proportion (38%) cite IT security as a barrier
- Not having the budget (28%) and a fear of disruption to the rest of the business (28%) are other commonly reported barriers
- Data and analytics is the technology most likely (94%) to have been adopted or to be going through the adoption process by respondents’ in these sectors
- The two other technologies that these organisations are most likely to be at the same stages of adoption with are customer experience personalisation (59%) and IoT (59%).
We recommend IT leaders consider the following key points when it comes to technology adoption:
- Ensure that timing of adoption is carefully considered, depending upon the industry and competitive landscape of the company; a fast-following approach is usually prudent to maximise the value cycle of investments and avoid the build-up of technical debt
- Ensure the value proposition is well understood, and where the contribution of new and improved technologies could drive improvements in cost and revenue against these; often a case built only on technology risk or cost cannot survive budgetary discussions intact
- Gain a good understanding of how current technology underpins business capabilities, and where there are gains from re-platforming and/or consolidation both from a technology, but also a business lens
- Keep a consistent and close market watch for key use cases, competition, and successes to ensure that you are truly acting as a fast follower and able to capitalise quickly
- Look to review skills and capability roadmaps regularly with technology partners to see how they can accelerate adoption
- Plan ahead in near and far cycles to balance immediate needs and fast change, with more complex and long-term transformation that occurs over years rather than months
- Recognise the dependencies between different technology and plan sequencing accordingly; poor data can undermine time to value, or overall benefits, for many of the maturing technologies such as RPA, AI, and CX Personalisation
- Communicate with the whole organisation, especially across the senior levels, to share understanding of the risks and impact associated with maintaining legacy technology; from a skills, functionality, agility, security, and business continuity perspective to help avoid decision-making paralysis, and a build-up of unacceptable technical debt.
In the months and years to come, disruptive technology will play an increasingly large and frequent role in the success or failure of many organisations, and to some extent it has already begun to do so with small, quick moving companies disrupting large, slow moving monoliths in various industries.
- 34% of organisations in the manufacturing and consumer products sectors keep up with new and disruptive technologies by having a dedicated team for monitoring technology advancements
- 31% have boardroom discussions where decisions on technology are made, and 31% are developing their own technologies
- 22% of respondents believe that IoT will be the most disruptive force in their industry over the next two years, while 19% believe that it will be A.I. The same proportion (19%) again think that this will be robotic process automation.
Figure 2: “What methods does your company use to keep up with new and disruptive technologies?” only showing data for respondents from the manufacturing and consumer products sector
- Organisations need to both understand the impact and manage the internal and external expectations around change in order to be successful. We recommend that organisations need to:
- scope and scale technology adoption realistically and apply appropriate success and benefit criteria, including adopting Agile “trial & learn” and “fail fast” approaches
- ensure that they are effectively ‘scouting’ technology, making good use of existing technology suppliers’ knowledge and learning in partnership with business colleagues
- validate their current status and ability to deploy, support and maintain new technology (and associated processes) to ensure that adoption is consistent and scalable over multiple functions.