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IT organisations need to prepare for an uncertain future

by Jan 1, 2016IT in Manufacturing

As engineers and technical specialists, we tend to regard technological trends in terms of the physical and virtual world. So, for example, when we consider the Internet of Things (IoT), cloud, SAAS, big data, and so on, our natural response is immediately to focus on what devices will exist, how they will be connected, and what data they will generate.

Change is inevitable

These are relatively tangible areas that engineers can understand. Engineers can however overlook the dramatic impact that such technologies will have on people, the organisational design of the future, and the role of the IT organisation in particular. Without the right people and organisational structure to support technological change, it is unlikely that your business will derive any real value from the new innovations.

The reality is that traditional IT in manufacturing has become fairly predictable and mature in terms of organisational design and processes. The manufacturing IT organisation is normally made up of a combination of in-house resources and outsourced specialists. Essential IT infrastructure and support services are typically provided by an outsourced service provider. This outsourced arrangement makes sound business sense because as a manufacturing company you then have access to good IT skills and experience. The manufacturing company is free from having to worry about retention and career paths for IT specialists. Similarly, your software development is probably outsourced to system integrators. These companies usually have a proven development methodology that can cater to the proprietary world of MES systems as well as line of business applications. An ecosystem of IT service providers, system integrators, and software developers has evolved around the needs of industrial manufacturing sites and this has generally worked well in the past.

Within this support ecosystem, the manufacturing company will of course need to retain certain in-house skills. The in-house IT team might be quite small, consisting of the CIO, business applications representative, and service delivery representative. Together with access to a number of business analysts this small team can adequately leverage and coordinate the outsourced IT organisations in line with the business requirements.

How then will the recent technology developments mentioned impact on this proven IT organisational model? Will the increased pace of technological change require a rethink of the roles of the in-house IT team?

Responsiveness is key

As an example – “Agile” – has surfaced as a viable methodology that promises delivery of a software project in near real-time within a fast-moving and poorly defined environment. Agile teams have learned how to work with short tactical deliverables. Agile teams know how to fail fast, and recover quickly. If, for example, a manufacturing company is to use SAAS and then become dependent on an external system for logistics management, the reality is that changes in the external logistics system will happen at the worst possible time, be unpredictable, impact on business systems, and could be very disruptive to operations. A responsive software development capability to reconfigure business systems and processes might be needed to mitigate this risk. While Agile might appear to be the right approach, it (Agile) is not necessarily very easy or practical to implement across company boundaries. Agile can require a change in culture and demands a very close level of collaboration between your business stakeholders and the developers for success.

Gartner has referred to “bimodal” IT as a mode of IT management that requires the simultaneous stewardship of the core enterprise and manufacturing systems using traditional IT practices, while at the same time embracing fast-moving innovation and change on the technological “edge”. Bimodal IT highlights the fact that traditional IT organisational capabilities are inadequate for certain fast-changing requirements. The question is then how to structure and prepare the new manufacturing IT organisation for this scenario?

In the new technological world, virtual teams enabled through modern collaboration technologies will no longer be the exception. Again, if your experience has been with in-house and local service providers, is your IT organisation ready for the world of virtual collaboration with specialists around the world?

The manufacturing CIO has many challenges and will need to be prepared for this changing environment. He or she will need to take ownership of the organisational transformation that is needed.

As with all change, a starting point is a realistic assessment of the current IT capabilities both in-house and outsourced. Identify silos that need to be broken down. How well is your outsourced provider adapting to new technology trends in terms of their own organisation and processes? Ask your service providers about their strategy to adopt Agile, and then ask them in detail how they intend to implement these together with your business people. Question your service providers and system integrators about how they see DevOps being implemented on your behalf. Ask them about their understanding of bimodal IT and how they plan to create new value from this strategy and how you will benefit.

Once an assessment is made of your internal capabilities, and that of the outsourced IT partners, you can start to formulate a roadmap to tackle the future organisational requirements. One thing is certain, the change will accelerate and there will be no end to the impact technology innovation will have on manufacturing in the future. Technology will increasingly be at the heart of your organisation and this demands that you plan and implement an organisational design that will fully enable and exploit this.

This article was first published on SA Instrumentation and Control.

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