The move to the Industrial Internet of Things (IIoT), Industry 4.0, and other forms of digital transformation in manufacturing are enabled by the cloud and its associated technologies. Cloud computing levels the playing field for manufacturing companies of all shapes and sizes to compete. No longer do you have to be a Fortune 500 company to take advantage of the best available high-performance technology in the world. Technology capabilities that used to require capital expenditure investments of tens of millions of dollars can now be rented in the cloud for only a few dollars per hour.
And as the cloud grows in scale, it’s also improving. New applications are being specifically designed to take advantage of the public cloud. Partnerships between cloud companies are growing as leading cloud providers enter into strategic alliances to increase the attractiveness and minimize the weakness in their product offerings. More managed service and technology providers are introducing new capabilities to aggregate and integrate disparate public cloud services, and facilitate interactions with the cloud provider ecosystem.
So how can your manufacturing company make a successful transition to leverage cloud technologies? Consider the following seven actions to maximize the results and minimize the pain of your cloud journey.
- Understand, document and communicate the business reasons for the use of the cloud. This may be communicated at the executive level, but it is important to translate what the opportunities are from the top-down (business benefits) as well as from the bottom-up (how to achieve it).
- Link cloud adoption to your overall technology plan. Hopefully, most companies have a technology roadmap where they have major goals outlined over the next 18-24 months or 3-5 years. It’s helpful to call out cloud as part of the overall strategy, so specific attention is paid to what the opportunities are and how your company is going to exploit them as part of the long-term strategic plan.
- Your people need to learn new skills – both IT and non-IT. You can have the greatest technology in the world, but your people need to know how to use it. Make sure the skill sets of your technologists are updated and your non-IT people are learning how to interact with the cloud-based applications available to them. For cybersecurity, employees can either be your best first defense or your worst nightmare. A good, cost-effective measure to improve your cyber defenses is educating your employees.
- Encourage risk-taking (and have the back of the cloud foot soldiers). IT professionals have learned the hard way that their many successes are largely invisible while their few failures are highly publicized. Taking risks and experimenting is required to get a better understanding of the value cloud computing can bring to your organization. The people taking the risk need to know that senior executives are genuinely supportive and will back them when something goes wrong (which it inevitably will).
- What’s in it for me? Make it personal, not just business. Your employees are already embracing the cloud in their personal lives. Smart companies will use this consumer technology movement to their advantage. As part of your training and awareness efforts, make sure employees understand the company’s move to the cloud is in sync with how their personal lives are changing. Cloud will continue to accelerate through consumer technologies delivered via apps and smart phones.
- It’s not all or nothing. Nor one size fits all. You can start small – but please get started. Historically, companies buy their own software, install it on their own on premise systems and hope it works and their users like it. The cloud approach is substantially different. Unless there is a strategic reason behind it, like regulatory or security requirements, stop dumping money into your own data center. Many companies are choosing to start their cloud journey by taking back-up and disaster recovery capabilities into the cloud as part of their business continuity solutions. Starting with back-up is a good way to get familiar with how the cloud works and the potential it has for your business.
- Ask for help. Engaging managed services providers, cloud service brokers and other technology partners with cloud experience can accelerate skills transfer, extend your reach, and reduce the “learning curve” time to embrace cloud services. Inform your existing application software providers of your desire to embrace cloud and SaaS offerings which will ultimately replace your existing on-premise implementation.
The cloud is not as new, unproven or risky as many manufacturing executives might think. Public cloud services have now been available for over 10 years and private cloud services for over 5 years. Think it’s too risky for your company? Consider the significant number of major financial institutions that have announced their moves to the cloud. JP Morgan is migrating its wholesale trading applications to the cloud. UBS Group AG is moving its risk management operations to Microsoft Azure, Microsoft’s cloud offering. And in May 2017, Bank of America announced its plans for a new personal digital assistant named Erica, which runs in the cloud using Artificial Intelligence (AI) but resides in a secure mobile app on your smartphone.
More evidence of the cloud’s growing importance can be found in the financial results of the major cloud providers. Amazon’s latest quarterly results show Amazon Web Services (AWS) growing 43 percent year-over-year while solidifying its position as the 800-pound gorilla in the public cloud space. Microsoft continues to make a strong play in cloud computing with its Azure offering. Azure's revenue was up 93 percent in the most recent quarter (2017 Q3). Workday, known primarily for its cloud-based HRMS systems, announced Q1 2017 results with revenue up 38 percent to $480 million. Workday’s CEO Aneel Bhusri indicated in the quarterly analyst call that, “The cloud, at least for HR, is clearly moving to Main Street, and it’s becoming more accepted.”
This rapidly growing area of technology spend speaks to the rapidly growing acceptance of cloud computing across all industries. The shift to cloud computing is on and the impacts it will have on manufacturers around the globe will be significant.
David Hartley is with UHY LLP.
