Manufacturing companies are reinventing their approach to data and process management for a variety of reasons—and they’re increasingly investing in cloud computing platforms to reach their goals for cost savings, workflow efficiencies, and organizational growth. In fact, research suggests that manufacturers are experiencing a relatively faster and heavily funded move to the cloud. Here, we’ll consider the reasons why.
It’s A Strategic Move
The 2018 IDG Cloud Computing Study revealed that while 77% of enterprises have at least one application or a portion of their enterprise computing infrastructure in the cloud, organizations in the most technology-dependent industries—manufacturing, high-tech, and telecommunications/utilities—are under the greatest pressure from their C-Suites to become 100% cloud based.
That’s right, executive management is standing firm behind the conviction that cloud-based enterprise software is the way forward—and they’re prioritizing spend like never before. According to International Data Corporation (IDC), the manufacturing industry is a larger spender on industry cloud, relative to the finance industry, and is set to achieve year-over-year growth of 23% in 2018 and double its 2017 spending of $4.2 billion to reach a total of $9.2 billion by 2021.
Get deeper insights into the transformational power of cloud-based business systems in Technology Trends in Manufacturing: Cloud Computing.
Seeking Accuracy, Speed, and Scale
Outside of the C-Suite, of course, managers across departmental boundaries appreciate the productivity boosts and data-backed insights afforded by modern ERP and other business systems. From the big-picture to the minutiae, cloud-based software is giving leaders greater 360-degree and on-demand visibility into supply chains, cash flows, workflows, and even customer and vendor experiences—all factors contributing to manufacturing growth and competitive positioning.
Cloud-based ERP software, for example, centralizes data from the various functional areas and plant locations to provide a unified view of the entire organization, enabling manufacturers to keep up with customers’ needs and achieve speed-to-market in a way that’s impossible when disparate systems don’t connect in real-time. Thanks to automation technology, inputs and outputs can be tracked and measured to assure quality and timeliness, and achieving and maintaining compliance becomes easier.
Explore some examples of technology “at work” to streamline processes in 3 Cloud-Based Business Systems That Help You Take Control of Your Workflows.
Replacing Yesterday’s Technology
If you’re like many manufacturers, the time is ripe to replace your aging legacy system and bring your organization—from the shop floor to the back office and C-Suite—up-to-speed. It makes sense to consider cloud-based software over an on-premise system, not only for quicker deployment, but because they’re easier and less costly to maintain (not to mention the abovementioned benefits!). This approach seems to be working for many other manufacturers, so you should follow suit…right?
But as we examine in Survey Reveals SaaS Implementation Secrets—and Partners’ Role in Success, you don’t want to oversimplify the real-life complexity of a cloud-based software deployment. Nor is it wise to underestimate your organization’s potential investment or “take it for granted” that cost-savings are a quick and sustainable win for every manufacturer.
It’s critical to view cloud software implementation with a long-range view: while you’re likely to reduce costs as the result of moving from on-premise to in-the-cloud, your solution is a business model enabler that, if deployed correctly and according to a strategic plan, will result in automation-driven efficiencies and cost-savings across the organization. These efficiencies and cost-savings serve to make your organization more agile and customer-friendly—ready to identify and take advantage of opportunities before (and better than) competitors.
The most successful cloud-supported manufacturing companies are seeing results because they have the executive backing (i.e. strategic oversight) to make it happen, and they’re making careful investments with the right software vendors and implementation partners.
Is Your Manufacturing Organization Ready for a Cloud Transformation?
Contact us for a free consultation to explore your company’s readiness for cloud-based business software and discuss next steps to get you there! In the meantime, don’t miss MIBAR’s case studies highlighting successes with manufacturing companies including Trebor, Polek and Polek, and Dexmet.
Growing Together: Cloud-Based Software and Your IT Team
4 Ways Your Legacy Software May be Costing You
3 Reasons Wholesale Distributors Are Tapping Into Cloud-Based Business Software