manufacturers

IFS Helps Customers Accelerate Out of The Curve of Digital Transformation

Making Asset Intensive Industries Lighter on their Feet

Asset intensive industries are quite likely to be capital intensive industries. Cost of entry is steep, but once you are an established player, you are tempted to hit cruise control. Living in a world where product lifespans tend to be measured in decades, growth and change come slowly. Or at least that’s the way it used to be. The digital economy has thrown you a curve. And when you are speeding down the business highway, a serious curve causes you to hit the brakes in order to safely negotiate the turn. But if you are riding a performance engine, there is nothing more exhilarating than accelerating out of that curve.

Digital technologies of today, those that serve to connect operations, people and processes through the power of the Internet, fuel that performance engine. Eighty-two percent (82%) of manufacturers participating in the 2016 Mint Jutras Enterprise Solution Study agree and 86% understand that embracing digital technologies is necessary for survival. And yet, we find the vast majority still coasting or riding the brakes when it comes to digital transformation.

IFS, a global enterprise applications company specializing in solutions for asset intensive industries, is setting out to help its customers accelerate out of the curve. Asset intensive businesses are very likely to be sitting on vast amounts of data gathered from products, assets and equipment. Yet few are able to leverage it fully. IFS IoT Business Connector, recently introduced at the IFS World Conference 2016, helps bridge the gap between data collection and analysis and between analysis and action. Through plug and play connectivity with the Microsoft Azure IoT Suite, customers can identify actionable observations that can trigger user-defined, automated or semi-automated actions for predictive maintenance, service management, asset management and manufacturing.

Need a Little Push?

As noted above, the majority of manufacturers today have an appreciation for the significance of digital technologies. In our 2016 Mint Jutras Enterprise Solution Study we asked survey participants how much they agreed with various statements about these new, advanced technologies (Table 1).

Table 1: How strongly do you agree or disagree with the following?

ifs-table1Source: Mint Jutras 2016 Enterprise Solution Study

Only 3% to 6% disagreed at all with any of the statements above and a relatively small percentage was neutral. The majority of manufacturers understand that digital technologies can be truly transformative. This data is consistent with data collected by IFS from its customers on perceptions about the Internet of Things (IoT) in particular. According to IFS, 86% of its installed base realize the importance of IoT, but 40% have no IoT strategy in place.

Mint Jutras actually finds these findings refreshingly candid. When we asked survey respondents how well prepared they were for the digital economy, we found a high level of confidence, with over half (58%) of all respondents indicating they were very well-prepared or at least close. And manufacturers claimed to be even more well prepared (Figure 1).

Figure 1: How well prepared are you for the digital economy?

ifs-fig-1Source: Mint Jutras 2016 Enterprise Solution Study

Yet subsequent questions about digital systems of record, as well as how activities were monitored, managed and performed, proved otherwise. The vast majority were found to still rely, at least partially, on spreadsheets, paper and manual processes. This not only indicates that many, manufacturers in particular, overestimate their level of preparedness and underestimate the impact digital technologies can and should have on the enterprise applications that are used to run the business, as well as the business itself.

Those in asset intensive industries are perhaps even slower to respond. Because their businesses tend to be more capital-intensive, they can’t turn on a dime like those businesses that require less capital for growth and change, thereby making them lighter on their feet.

So what is IFS doing to make them lighter on their feet and more nimble?

Cloud Helps

First of all, we see IFS offering cloud options. Many of these businesses require capital to be invested in assets necessary to run their businesses. By running IFS enterprise resource planning (ERP), field service management (FSM) and enterprise asset management (EAM) solutions in the cloud, they lighten the load of capital required to manage back office and front office processes. Indeed IFS reports that 34% of new business closed is now cloud-based and running on the Microsoft Azure platform.

While preferences and perceptions vary quite significantly across the different regions in which IFS operates, at least within the United States Mint Jutras research finds software as a service (SaaS) is the most preferred option for new deployments. However, we expect the worldwide market will be in transition for the next ten years or more. This is partially because the United States tends to lead the world, and partially because there are simply so many on-premise deployments today. The inertia that keeps manufacturers from actively researching and investigating new technologies is the same inertia that keeps these solutions in place long after their glory years. IFS addresses this by providing multiple deployment options and also by adding other solutions that allow customers to make strides in digital transformation while leaving existing solutions in place.

Cloud-based IFS IoT Business Connector will play an important role, but perhaps equally important is IFS Enterprise Operational Intelligence (EOI), to which it is connected.

IFS IoT Business Connector

According to IFS, “IFS IoT Business Connector turns IoT insights into actions in IFS Applications” (including ERP, FSM and EOI). The goal is to observe the environment and turn perceived challenges into opportunities – a lofty goal. But what is it and how does it do that?

Before we answer that question, it is important to understand the different steps the IFS IoT Business Connector facilitates in order to transform challenges faced into opportunities for growth and improvement.

Data, Devices and Communication

The first step is in collecting the data itself. This might be done through sensors on assets or equipment on the plant floor or in products in the field. This is not especially new in the world of manufacturing and/or field service maintenance. Often data comes through:

  • supervisory control and data acquisition (SCADA) systems used for remote monitoring and control
  • programmable logic controllers (PLCs) for the control of manufacturing processes, or any activity that requires high reliability and process fault diagnosis
  • OLE (object linking and embedding) for Process Control (OPC), which is a series of standards and specifications for industrial communication of real-time plant data between control devices.

The connections might be made through local network protocols or Internet communication. It has never been hard to collect millions or even billions of sensor readings. The IFS IoT Business Connector isn’t about the data collection. It is more about connecting that data to make better use of it, in real-time where appropriate.

Discovery

In order to take full advantage of the data collected, it is necessary to go through a discovery phase. The IFS IoT Discovery Manager (a component of IFS IoT Business Connector) provides additional management and monitoring capabilities when using Microsoft Azure IoT Suite as the discovery platform.  It automates the creation and connection of all IoT Suite components (hubs, streams, buses etc.) in accordance with the IFS IoT Business Connector reference architecture.

However, it is important to note that Microsoft Azure IoT Suite is not a mandated requirement. A customer may use a different solution for discovery, in which case IFS provides an API (application programming interface) to receive observations to be used in subsequent steps of the process.

Operationalizing the Data

IFS IoT Discovery Manager can receive and store thousands, or even hundreds of thousands of “observations.” But how do you interpret what the data is telling you? In order to operationalize the data, you need to be able to take action.

You will want to analyze data streams in real time in order to mine the data to help you discover potential problems and/or opportunities. You will want to apply some sort of decision-making algorithms that work 24/7, even when humans are asleep, sick or busy with other value-add tasks. And finally you will want to visualize the data, presenting it in a way that highlights issues, both good and bad, quickly.

Often the action taken must be recorded or reflected in the enterprise software that is running your business. The IFS IoT Gateway (another component of IFS IoT Business Connector) enables communications between the cloud-based discovery and analytics of IoT data and the on-premise or cloud-based IFS applications.

The failure of a door to open on public transportation can trigger a service call. A pest trap that is full and requires emptying can alert a service engineer in a pest control company. Variations in vibration, temperature or voltage of a piece of equipment can send a warning signal that results in a call to a maintenance company during off hours, preventing a halt to production. These are just three examples of how early adopters of IFS IoT Business Connector are looking to operationalize the data collected, either with the help of human review and augmentation or through (prescriptive) automated actions, or both.

Business Optimization

But the real results will come only when you effectively use the data, discovery and operations to optimize your business. That means monetizing it to develop new sources of revenue. That may require a different way of thinking. Even companies that have exclusively made money from making and moving product in the past, will likely find new revenue streams through services and/or data. IFS likes to call it the “servitization” of business. Whether you replace or supplement your product sales, new revenue opportunities can come from maintenance or consulting services, software (as a service) or even outcomes like hours of successful operation or output.

IFS IoT Controller (the third component of IFS IoT Business Connector) helps you determine what actions to take based on the analysis of observations about your business. It helps you map your operational technology to your business applications like ERP.

Cascading Effect on Business Applications

However, the connection back to ERP (and perhaps other applications like Field Service) might not be so intuitive. New sources of revenue might require new methods of invoicing and revenue recognition. It is one thing to ship and invoice for a physical product, but quite another to create invoices (and recognize revenue) for services and/or subscriptions.

Guessing how new business models will impact invoicing, revenue and cash is just that – a guess. As the digital economy also becomes the subscription economy, companies today need to be able to handle new and different revenue streams, often in conjunction with more traditional ones. And with the upcoming changes to revenue recognition as a result of the merging of accounting standards (ASC and IFRS), this places new functional requirements on ERP.

Changes to existing accounting software are not insignificant. In fact, they can be quite extensive. IFS is still working on these changes, but with an eye towards the 2018 deadline for implementing new rules.

Apart from these (very specific) accounting requirements, the real key to business optimization lies just beyond the scope of the IFS IoT Business Connector. As we mentioned earlier, equally, if not more importantly, is enterprise operational intelligence. Notice the lack of capitalization. In this case we use the phrase as a goal. Hopefully we don’t confuse our audience in saying IFS Enterprise Operational Intelligence or EOI is the means to this end (goal). The level of importance of EOI is further amplified in that it is one of those solutions that helps customers take those transformative first steps without requiring the full-scale replacement of ERP.

IFS Enterprise Operational Intelligence (EOI)

IFS describes EOI as the the key that unlocks intelligent business operations for its customers, “integrating real-time analytics into business processes to empower organizations to make better, faster decisions based on [their] strategic objectives.” Of course analytics are becoming much more mainstream today, but there are two differentiators here – strategy and action.

The first is that last qualifier, linking analytics to strategy. This starts with the first of three core steps: Map, monitor and manage.

  • Map: capturing and visualizing the business model, which of course is subject to change much more frequently than in days gone by, due to the potentially disruptive nature of digital technologies.
  • Monitor: connecting and visualling performance. After mapping the business, you then connect various data sources, including IFS applications, the IoT, other databases and applications and even Excel spreadsheets. These are presented in “cockpits.” These are more than just pretty charts on a dashboard. IFS distinguishes these from your typical (passive) dashboard by allowing you to take action right from the cockpit.
  • Manage: analyzing and improving business operations. IFS has embraced continuous improvement methodologies including PDCA (plan–do–check–act or plan–do–check–adjust) and OODA (the decision cycle of observe-orient-decide-act).

Customers using EOI prefer embedding this type of solution into their IFS enterprise applications rather than purchasing separate business intelligence (BI) and/or business process management (BPM) solutions that either run stand-alone or must be custom-integrated into the solutions that run their businesses. But even more importantly, it allows them to take some incremental steps in digitally transforming their businesses, without the major disruption of a full-scale upgrade or replacement.

Wrap Up

It seems quite appropriate that IFS’s recent marketing efforts have led the company to sponsor a Formula One racing team. Earlier this year IFS announced it had become a Principal Partner of the Sauber F1 Team for the 2016 FIA Formula One Championship. Why is it appropriate? According to Mark Boulton, chief marketing officer of IFS, “This new partnership between IFS and the Sauber F1 Team is based on strong foundations, as both companies are commited to innovation, focused on design, and treasure the power of effective teamwork. It’s these qualities that … are lived by our employees and partners every day as we continue to empower our growing global customer base with IFS’s leading software and solutions.”

Mint Jutras agrees that IFS has built a strong foundation, but more importantly, one which helps customers face those upcoming curves in the road caused by the looming inevitability of digital disruption. Just as you don’t want to be changing the tires (or the engine) while you are speeding down the road, IFS customers won’t want or need to switch out the engine that powers their businesses, nor will they be blindly steering into those turns.

IFS Enterprise Operational Intelligence (EOI) can put them in the cockpit and IFS IoT Business Connector can keep them connected to the data they need to make the decisions required to accelerate out of the curve.

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SYSPRO Delivers on the Practical Side of Digital Technologies

Bringing Technology, People and Processes Together In a Winning Combination

Advanced technologies and automation have been transforming manufacturing and distribution for decades now. Through these advances we have streamlined production and eliminated waste and variability. We make products better and faster. But the digital technologies of today, those that serve to connect operations, people and processes through the power of the Internet, have the potential of fundamentally changing the way we do business. Eighty-two percent (82%) of manufacturers participating in the 2016 Mint Jutras Enterprise Solution Study agree and 86% understand that embracing digital technologies is necessary for survival.

And yet few manufacturers seem to fully grasp the potential digital technologies have to truly change the game. In some ways, this is perfectly understandable. While we are constantly bombarded with examples of how digital technologies can transform our world, most of the examples fall into the category of consumer technology (social, home, shopping, fitness…). The reference to this technology in the context of the enterprise is very often at a level of abstraction that leaves down-to-earth manufacturers either scratching their collective heads or thinking it is way beyond their reach. While we might buy the latest consumer gadget just because we can, manufacturers and distributors make investment decisions with their feet planted firmly on the ground.

This is why SYSPRO is announcing six new capabilities that help manufacturers and distributors take practical advantage of advanced digital technologies. If you are one of these pragmatic individuals, you might be so busy dealing with day-to-day challenges that you let inertia keep you mired in spreadsheets and paper. If so, you’re not alone. But don’t let that stop you. SYSPRO’s new advanced capabilities might be just what you need to justify that leap into digital transformation.

Do Manufacturers and Distributors Care?

As noted above, the majority of manufacturers and distributors today have an appreciation for the significance of digital technologies. In our 2016 Mint Jutras Enterprise Solution Study we asked survey participants how much they agreed with various statements about these new, advanced technologies (Table 1).

Table 1: How strongly do you agree or disagree with the following?

syspro-table-3Source: Mint Jutras 2016 Enterprise Solution Study

Only 3% to 6% disagreed at all with any of the statements above and a relatively small percentage was neutral. The majority of those in manufacturing and distribution companies today understand that digital technologies can not only facilitate the connection between companies, people and processes, but can also automate the connection between different enterprise systems. Whether this is a continuation of your current plans for information technology (IT) and/or automation, or a brand new direction, you need to implement them in order to forge that connection. While 86% agree these technologies are necessary for basic survival, we find evidence they have not been embraced with the level of priority and urgency that will give companies a competitive advantage.

Table 2: To what extent are these activities performed/managed digitally?

syspro-table-2Source: Mint Jutras 2016 Enterprise Solution Study

Table 2 is a sad reminder of the continued prevalence of spreadsheets and paper. Of course some use of spreadsheets is simply the result of familiarity and comfort level. But that doesn’t make it any less troublesome or the data any more real-time.

Come to find out, SYSPRO USA also gathered its own intelligence on this topic through one of its SNAP surveys, sent to its own customers. From this latest poll, SYSPRO concluded, “Companies are confused or have never heard about the newest, high-impact technologies.” This conclusion was based on the question: “Have you read or heard about [insert technology]?” The technologies included were predictive analytics, the Internet of Things (IoT) and bots. In each case, less than half (about 45%) said “Yes.” The remainder said, “No, I don’t know” or, in the case of bots, “Not sure.”

While this actually could help explain this lack of urgency, Mint Jutras interprets the answers a little differently. Individuals may be confused, but more likely these responses indicate they simply are not paying attention and therefore don’t make the connection between problems and challenges faced and digital technologies. For those that follow technology trends closely, the hype over digital technologies is impossible to miss. But your typical manufacturing or distribution professionals are far less likely to follow technology just for the sake of technology. They are far too busy fighting those pesky fires on a day to day basis.

Talking about predictive analytics won’t get their attention. Talking about ways to better forecast demand or predict revenue and profits might. Connecting the dots is not only practical, but also a winning combination.

Discussing the Internet of Things is an intellectual discussion. Suggesting ways to make better use of data captured today on the shop floor (i.e. through the IoT), whether it is for the purpose of increasing throughput or quality or customer service, is not only practical, but also a winning combination.

Bots in general still seem quite futuristic and “pie in the sky” to many, in spite of the fact that all kinds of production and material handling automation is already quite prevalent in many manufacturing and distribution companies. But investment in that kind of automation has traditionally been expressly for the purpose of making and/or moving more product, better and faster, not making the business itself, or the people that run it any more productive or efficient. But think about where supervisors and managers can be the most effective – not sitting at their desks, but out on the floor. The problem in the past arose from the fact that as soon as they leave the comfort of their offices and venture out on the floor, they have been instantly disconnected from enterprise data. Demonstrating how communicating with devices in a hands-free manner can facilitate control and decision-making is not only practical, but also a winning combination.

That’s really what SYSPRO’s new capabilities are all about: practical ways of bringing technology, people and processes together in a winning combination.

SYSPRO’s New Digital Capabilities

So what are these new capabilities? They combine the power of digital technologies with analytics, cloud deployment, big data and some other cool, high-impact technologies like that used for facial recognition. But think beyond faces; think about blemishes on raw ingredients, components or fabricated products. Here’s the rundown:

SYSPRO Azure Cloud Platform

SYSPRO has teamed up with Microsoft to deliver infrastructure as a service (IaaS) now and platform as a service (PaaS) in 2017. SYSPRO’s ERP will be delivered in the Azure cloud in 2016, but will also move beyond this to deliver the SYSPRO Azure Operation Center. This is more than just a data center. It will be staffed with SYSPRO employees that will provide managed services to assist companies looking to move from on-premise to cloud deployments. Early on SYSPRO customers may want to lift and shift from existing on-premise deployment and then move more fully into a SaaS environment in order to take full advantage of software as a service (SaaS). But these SYSPRO employees will also be available for new installations and will be armed with templates and tools for rapid deployment.

Additional services offered will include backups of course, but also system monitoring, incident management, disaster recovery and high availability (think automatic rollover and scaling).

Mint Jutras research finds SaaS deployment is the most preferred option for new deployments, but the market will be in transition for the next ten years or more because there are simply so many on-premise deployments today. The inertia that keeps manufacturers and distributors from actively researching and investigating new technologies is the same inertia that keeps these solutions in place long after their glory years. SYSPRO can help make that transition smoother and more appealing.

SYSPRO Harmony

SYSPRO describes this as a “cloud-based multi-user experience platform that unites social media capabilities, internal/external collaboration, machine learning, cognitive services and data analytics into a single offering for accomplishing targeted or highly complex tasks.” That’s a mouthful. What does it really mean?

To the manufacturing or distribution professional who might think “social” is something employees should do on their own free time, think of it more as an application that lets you keep your finger on the pulse of all the “stuff” going on concerning your production, orders, operations and finances.

Many business leaders in manufacturing and distribution companies downplay the importance of “social” capabilities, equating them to social media. But when we break down the really useful capabilities, and don’t necessarily label them as “social” we get a very different response. Suddenly these concepts become useful or even “must have!”

Table 3: Would these capabilities be useful? Shhh… don’t call them “social”

syspro-table-1Source: Mint Jutras 2016 Enterprise Solution Study

If you aren’t already a fan of “social” the concept of “following” might not seem familiar to you. But chances are, you are already following someone or something either in your professional or personal life. Perhaps you follow the stock price of specific companies, or you watch a stock exchange like NASDAQ or the Nikkei. Or maybe you follow the stats of your favorite sports teams. Maybe you do that through newspapers, online or using an app on your mobile device. Perhaps newsfeeds are delivered to you through email. Regardless of the delivery method, the objective is to stay informed.

What if you could easily apply that same concept to your customers, orders or prospects? Perhaps you need to keep tabs on that big deal you hope to close by the end of the quarter. Wouldn’t it also be helpful to “follow” the trail of activity that has already occurred during the sales cycle? What if you could see the conversations or chatter between sales rep and manager? What documents have been delivered to the prospect? And what if this potential deal is with an existing customer? Wouldn’t you like to be able to scroll through the support activity over the past few months, including the calls, issues, resolutions? Has the customer experienced any quality or delivery issues? Have they been consistently paying their bills on time or is their outstanding balance over 90 days?

And what if all that activity was collected for you and presented in a single stream? The result of monitoring these types of activity streams is fewer surprises and more proactive versus reactive management. And to present this coherently you need a “consumer grade” user interface. This is what SYSPRO Harmony is all about.

SYSPRO Predictive Search

Enterprise search capabilities should be quite self-explanatory, but don’t mistake just any kind of current search capability for a true enterprise search. Of course you can look up a part by its description or a customer number by the customer’s name. ERP solutions have had this kind of search capability since the 1990’s. But can you search across your entire enterprise database for any reference to a particular customer, including contacts, conversations, sales orders, invoices, dunning notices, cash receipts? It’s not entirely clear when “Google” became a verb, but can you “Google” your customer and include the data in your ERP?

SYSPRO’s Predictive Search can be used to search like this within the confines of your ERP. It is predictive just like your consumer device or your productivity tools (think email and messaging) are predictive. You start typing and it anticipates what you are looking for. And best of all, it puts that search into a specific context of a customer or an order or any relevant business object.

SYSPRO BOTS

Sometimes you might think when you are looking for an answer to your question, “Wouldn’t it be nice if I could just ask for something in plain English?” Many smart phones today allow you to do just that, using voice activated commands. You say, “Hey Siri” and an automated bot responds. With SYSPRO Bots, you initiate a similar conversation with, “Hey chatbot.” And guess who and what is at your service? It is actually a self-service agent lurking in the background, one that never needs a coffe break or a day off.

SYSPRO Webviews (User Interface)

SYSPRO has completely rethought dashboards, making them configurable to the extent that a single individual can construct his or her own “single view” of the world. Tailorable by power users (without the assistance of a developer), the traditional “read only” view of the world becomes interactive. For example, an order can be released from a dashboard via a single click – no need to open it up, browse through and then take action.

The Age of Digital Disruption

Eighty-one percent (81%) of manufacturers and distributors agree that embracing digital technologies will give them a competitive advantage. And yet 77% to 91% still rely at least partially on spreadsheets or (even worse) manual efforts to plan and manage activities. This is a far cry from “embracing” digital. So what are they waiting for? What are you waiting for?

The Internet levels the playing field in our global economy, allowing companies of any size to establish a presence and compete on a global basis. That’s the good news. The bad news is that those same windows of opportunity you might encounter, are also open to your competitors. And those competitors come in many different shapes and sizes. So as you take your place on the world stage, be careful what you wish for. The enterprise applications that got you where you are today simply may not be able to take you where you need to go. In order to participate and become a real player, you need to embrace the cloud and take advantage of digital technologies in many different shapes and forms.

The age of digital disruption is upon us. As a result, you better be pretty flexible in terms of where you want – and need – to go. Giving examples like Uber, which disrupted the taxi industry, Airbnb, which disrupted hospitality and Netflix and iTunes, which disrupted entertainment, we asked our 2016 Mint Jutras Enterprise Solution Study participants, “How much risk do you face in your industry being disrupted?” Figure 1 shows the majority (79%) peg the risk as low to medium. But how do you think the taxi industry would have responded shortly before Uber came on the scene? These kinds of game-changing disruptions can occur right out of the blue. Are you ready? Would you survive?

Figure 1: How much risk do you face in your industry being disrupted?

syspro-fig-1Source: Mint Jutras 2016 Enterprise Solution Study

What will be the compelling events that drive this disruption? Will it come from the introduction of new products or from new ways of selling/pricing existing products, or entirely new business models? Or might it come from some combination of sources, making it even more unpredictable?

Are You Listening?

Manufacturers and distributors face difficult challenges, not only in the possibility of disruption, but just in dealing with the increasing complexities of an already complex world. You don’t have time to constantly surf the web and other information sources looking for that one new digital technology that just might change the game (and your life). So in keeping abreast of new, potentially high-impact technologies, select your source carefully. SYSPRO has the practical experience, the vision, the expertise and the platform to deliver. If you are looking to better embrace digital technologies for practical use, to connect enterprise systems directly to people and processes, to gain a competitive advantage… SYSPRO speaks your language.

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