Introduction
It was quite a defining moment in my early days as an IT manager when a seasoned and outspoken business leader challenged me on both the high IT costs and underperformance of our plant. This encounter left me pondering the true value of IT in manufacturing. Financial performance alone isn’t always a reliable measure, as external factors can heavily influence manufacturing companies performance. Over the years that followed, my career in engineering and IT took me on a journey to understand exactly how IT should add value in the manufacturing landscape. In this article, we explore two key dimensions that IT managers must navigate to ensure they are adding value:
(1) getting the basics right and
(2) aligning with the business strategy.
Getting the Basics Right
If the IT systems are not working properly, no amount of effort will convince a business leader to take IT seriously. You need to get the basics right to earn the credibility necessary to be a strategic partner to the business.
Benchmarking and auditing IT operations became part of my role in the early days, allowing me to objectively assess the performance of IT and best practices in a variety of businesses of all sizes. Over time a more structured framework guided these engagements, ensuring that the IT fundamentals were in place. These were:
IT Governance
- Are the IT goals and strategies aligned with overall business objectives?
- Are robust IT governance frameworks, policies, and procedures implemented effectively?
- Are the IT personnel involved in decision-making processes within the organisation.
IT Infrastructure and Systems
- Is the manufacturing IT infrastructure reliable, scalable, and performing as it should?
- Are the OT (operational technology) systems effective in ensuring the best possible plant performance and overall equipment effectiveness?
- How effective are the manufacturing-specific software systems (ERP, MES, SCM, S&OP, PLM) in supporting the business operations and new business development.
- Assess the integration of different IT systems to ensure seamless data flow and process synchronization, breaking down silos and avoiding manual data capture.
Data Management and Analytics
- Evaluate the effectiveness of data management practices, including collection, storage, accuracy, and accessibility.
- Assess the utilisation of data analytics tools and techniques for optimizing manufacturing processes (process monitoring, quality control, predictive maintenance, supply chain management).
Cybersecurity
- Assess the effectiveness of cybersecurity measures and controls in protecting the manufacturing IT systems from internal and external threats.
- Review access controls, authentication mechanisms, and user management practices to safeguard sensitive data.
- How well are data security measures, backup and recovery procedures, and data governance practices protecting sensitive manufacturing data?
- Evaluate incident response and business continuity plans in case of cyber incidents or system disruptions.
IT Compliance
- Ensure compliance with relevant regulatory requirements and industry standards specific to manufacturing.
- Review IT change management processes to minimize disruptions and ensure compliance with best practices.
- Assess documentation and record-keeping practices related to IT systems, changes, and audits.
IT Risk Management
- Identify potential risks and vulnerabilities within the manufacturing IT environment.
- Evaluate the implementation of IT controls and monitoring mechanisms to prevent fraud, errors, and unauthorised access.
Training and Awareness
- Assess the training and awareness programs for manufacturing employees regarding IT security, data handling, and proper system usage.
- Review user access management procedures to identify gaps in training and awareness that could pose security risks.
The Strategic Value of IT
During these audits, I encountered both sceptics and those who understood the value of IT in manufacturing. Once the basics were in place, engaging with business leaders on the strategic value of IT opened productive conversations. The following topics were always good conversation starters:
- How to improve operational efficiency?
- How to enhance customer experience?
- How to increase innovation and agility?
- How to improve data-driven decision making?
- How can IT help gain competitive advantage?
- Where does IT contribute to cost savings and revenue generation?
- How does IT ensure scalability and global reach?
Manufacturing IT should always strive to add value that will ultimately translate into a stronger income statement. Ensuring the basics are in place and passing audit checklists is necessary, but insufficient. Ongoing dialogue with business leadership about the strategic value of IT is equally vital. While some sceptics may view IT as a burden and just a cost centre, a successful business leader will likely know that IT is far more than an overhead expense on an income statement.
Conclusion
To unlock the true value of IT in manufacturing, IT managers must go beyond financial performance indicators. Getting the basics right through effective governance, robust infrastructure, data management, cybersecurity, compliance, risk management, and training sets a strong foundation. Simultaneously, engaging with business leaders on the strategic value of IT ensures its alignment with organisational goals and opens the door to innovation, efficiency, and competitive advantage. I wish I could go back 30 years and have that conversation again with the outspoken business leader who correctly challenged me at the time.
