We read with interest an article entitled “The latest technology isn’t enough – you need the business model to go with it” published by the World Economic Forum.
The article makes the case that the manufacturing sector has many potentially disruptive technologies available to them, ranging from artificial intelligence to connected machinery to 3D printing. These advances offer cost savings, quality improvements and increased flexibility.
As the article notes: “It is tempting to think that a manufacturer could modernize itself simply by replacing its old processes with new ones that feature these technologies. But the historical record suggests that isn’t enough.”
The World Economic Forum article also offers a fascinating analogy to the late 19th century, when manufacturers rushed to electrify their factories. Electrification seemed like an obvious productivity boost, but it failed to produce any notable gains for more than three decades. They weave in that story with additional examples of how technology can fail to deliver on expectations.
As an independent ERP consulting firm,, we were especially interested in the section of the article looking at how organizations can reimagine manufacturing in a digital era.
The article walks the reader through the many disruptive technologies available in the marketplace. From product customizations to digital supply chains, the main point of the article is laying advanced technology onto a broken process won’t pay off.
When new manufacturing technologies emerge, it’s easy to think about them in terms of concrete applications—the requirements they’re able to meet, the kinds of products they’re able to fabricate. But the real returns go to those who are able to build new business models that stand on top of them, and are willing to reorder entire industries around them.
Look at Processes First
This article hits on many themes near and dear to Ultra Consultants. When starting a technology project, we guide teams to evaluate the current state to first look at processes, and then turn attention to technology.
Why is it often the case that a typical manufacturer or distributor looks at replacing technology first, before examining business processes?
From the experience our team has had in the field leading ERP intiatives, it’s common for an organization to think of their challenges in terms of an IT problem.
But technology is usually not the problem. Project teams often don’t realize their business process needs improving before new technology is implemented.
Transforming the business processes requires business process improvement – creating a vision of the future state from the current state – and on to defining the business value for the project. Done properly, this foundation will establish alignment of expectations with management, improve the efficiency of the team, eliminate process waste, and reduce the time to benefit for your project.
Even when the team is tempted to jump into product demos, Ultra guides them to focus on the benefits of business process improvement to first look at the business before looking for a technology solution.
Put Emphasis on the Business
When looking at a failed ERP implementation that Ultra was called in to rescue, a key cause for the failure was the team putting too much emphasis on finding technology.
Without this essential step of analyzing the present situation and identifying the improved situation, ROI from technology will never materialize. Far too often we see new systems implemented that essentially mimic the old system and or the old process
True business transformation needs process and system change to be achieved.
Because putting processes first is such a critical step in any technology project, here are additional resources to help enterprises understand this approach. Explore this topic further in the post Business Improvement Processes: Defining the Future State.
Contact Ultra Consultants to start your technology-enabled transformation.