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Survey Spotlights 6 Habits for Successful Tech Investments

March 30, 2020
Especially in disruptive times, manufacturers need to be strategic when making meaningful technology investments.

New technologies are constantly entering the mix, providing manufacturers with interesting avenues to improve their operations. However, according to the recent EY Tech Horizon Survey, ongoing and planned technology investments are painting a clear picture. The technologies getting the most investment are cloud (63%), data and advanced analytics (60%) and IoT (55%). Furthermore, when asked to consider where technology investments will be in two years cloud still ranks at the top (58%), however IoT moves up to the top spot with 49%.

Although EY launched its Tech Horizon survey well in advance of the COVID-19 outbreak, the findings related to transformation are just as true today, EY Global and EY Americas Supply Chain Leader Glenn Steinberg tells IndustryWeek.

“In the survey, transformation refers to the way that companies and industries are changing dramatically considering major shifts in market dynamics. Certainly, market dynamics have shifted during the current pandemic, which is a reminder to businesses that the risk of an unexpected disruptive event is ever-present,” says Steinberg. “For manufacturers to continue to serve their customers and communities during a period of disruption, they need to be proactive and agile in their planning, supply management, production and delivery – and they should start or continue their transformation journeys today.”  

Applying habits to manufacturing

Steinberg identified six habits shared by large organizations that are leaders in digital transformation. These behaviors and the actions that manufacturers can take to align themselves with them include:   

  1. Focusing on customers first and foremost. This behavior is always essential, but especially in disruptive times. So, this is the right time for manufacturers to reassess their focus on the customer and to ensure their decisions are closely aligned with their customers’ needs.   
  2. Accelerating AI to drive growth. Leaders are prioritizing a wide range of technology for the next two years, with top investments in the cloud and artificial intelligence (both at 53%), followed by the Internet of Things (49%). “As they move ahead, manufacturers should look to integrate these and other technologies into their operations to help drive efficiencies, responsiveness and flexibility,” says Steinberg.
  3. Driving innovation through ecosystems and partnerships. Manufacturers can respond to the needs of high-demanding customers by building flexible “ecosystems” that leverage strategic partners and digital technologies to build a cohesive network of services, talent and ideas. “Such ecosystems can allow manufacturers to have flexible capacity or offload capabilities so they can focus on core and essential products,” he says.
  4. Nurturing talent with new incentives and strategies. The survey shows the skills gap is real and prevalent: 59% of all corporations believe there’s an industry-wide shortage of the type of skills that would help accelerate their digital transformation efforts. “Employees are the heart of any organization, and they’re the face of the brand, so manufacturers should make efforts to reshape and reskill their workforce for digital transformation, with measures such as incentives to encourage employees to learn new skills,” says Steinberg.
  5. Activating governance plans for emerging tech. While developing and deploying innovative digital technology at scale today is crucial to business success – allowing companies to be nimbler, to challenge sector boundaries, and deliver better customer outcomes – innovative technology, if it is to scale across the organization, must be governed properly and ethically, explains Steinberg. “Our research finds that although almost half (49%) of corporate companies – and this includes manufacturing companies -- are drawing up plans for executive-level governance of emerging technology, only 8% already have a well-established and active governance framework,” he says. “This suggests that all businesses need to deploy technology with due consideration of the governance and ethical frameworks that should moderate its use.”
  6. Powering innovation by leveraging data and being agile. Manufacturers should continue to use data to improve operations, such as detecting and predicting failure points to minimize costly downtime. In fact, we found that nearly three-quarters (71%) of corporates, including manufacturers, use insights from data and analytics to speed innovation. “Corporates need to understand and respect the significant value data can deliver to their business, underestimating it at their own risk,” he says. “Manufacturers should ensure data is trusted and has meaning. Structured data must be clean, of high quality, compliant and secure, and they should embed data at the heart of the business, connecting the brain of the business (the data) to the body (operations).”

EY also identified several elements that contribute to value creation and leadership. “Arguably the most essential element is keeping humans at the center, with a commitment to deeper customer centricity and employee engagement,” he says. “Manufacturers should focus on this critical element now – or indeed, in any period of intense disruption -- where manufacturers’ customers and their people alike need clear communications and plans from leadership.” 

According to Steinberg, putting humans at the center is a critical value driver for enterprise transformation, “which connects with the wider idea of the human enterprise, our vision of how organizations in all sectors can reframe the role of technology to unlock human ingenuity, resourcefulness and diversity to create new solutions, ideas and business models for tomorrow’s working world.”

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