There are many issues that are complicating the industry:
- Industry 4.0 is a technology platform that requires planning and investment in new technology and new skills.
- Attracting and retaining talent is more difficult due to the specialized skills necessary for new technology and holding back skilled staff for support of existing technology.
- Harmonization of IT and OT departments is critical for smooth adoption and maximized ROI of Industry 4.0.
Our Advice
Critical Insight
- A CIO has three roles: enable business productivity, run an effective IT shop, and drive technology innovation. Your key initiative plan must reflect these three mandates and how IT strives to fulfill them.
- Don’t project your vision three to five years into the future. Dive deep into next year’s big-ticket items instead.
- Developing an IT strategy is a wasted effort if no mechanisms are put in place to govern the journey.
- If you don’t communicate it, it doesn’t exist; simple, appealing, and inspirational communication is needed.
Impact and Result
- Establish the scope of your IT strategy by defining IT’s mission and vision statements and guiding principles.
- Perform a retrospective of IT’s performance to recognize the current state while highlighting important strategic elements to address going forward.
- Elicit the business context and identify strategic initiatives that are most important to the organization while building a plan to execute on it.
- Evaluate the foundational elements of IT’s operational strategy that will be required to successfully execute on key initiatives.
- Wrap all strategic information into a highly visual and compelling presentation that enables easy customization and executive-facing content.
Build a Durable Goods Manufacturing Business-Aligned IT Strategy
Success depends on IT initiatives clearly aligned to business goals, IT excellence, and driving technology innovation.
Executive Summary
IT strategies are often nonexistent or ineffective.
IT departments that have not developed IT strategies experience issues with alignment, organization, and prioritization. |
Three-quarters of surveyed CEOs value tech leaders with experience fostering operational stability and strategic business alignment,3 however…
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Follow Info-Tech’s approach to developing a strong IT strategy.
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Info-Tech Insight
A CIO has three roles: enable business productivity, run an effective IT shop, and drive technology innovation. Your IT strategy must reflect these three mandates and how IT strives to fulfill them.
1: Info-Tech, Management and Governance Diagnostic; n=1,931
2: Info-Tech, CEO-CIO Alignment Diagnostic; n=863
3: CIO Journal, 2020
Executive Summary: Durable Goods Manufacturing Business-Aligned IT Strategy
Situation: Competitive landscape transformationThe durable goods manufacturing environment is changing significantly. With new Industry 4.0 technology, a rapidly growing consumer class, changes in demographics, a push for operational efficiency, and a more highly regulated space, the competitive landscape has become complex. The need to innovate and digitally transform operations is increasing. IT organizations must play a critical role in the business transformation by harmonizing the interconnectivity and communications necessary for rapid and effective change. |
Complication: Lack of skills and collaborationThere are many issues that are complicating the industry:
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Solution: A business-aligned approachBy engaging in the insights and activities presented in this research, you will:
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The durable goods manufacturing industry
Making things that last:
- Typically takes longer than for non-durable items
- Creates goods that are expected to last more than three years
- Involves both a complex production process and a complex supply chain process
- Means higher exposure to obsolescence
- Typically more expensive to produce
- Requires heavy up-front capital investment
- Results in higher-end product purchase value
- Sees customer purchases based on rational decisions rather than on emotional factors
- Means selling the product might involve financial tools (leasing, loans, etc.)
- Has a longer lead time
- Has strong planning capabilities requirements
The durable goods IT environment
- Technological innovation
- Environmental stewardship
- Disposable income
- Economic outlook
- Trade agreements
- Capital investment
Influencing factors
- Technological innovation: Technology and innovation are creating opportunities for the durable goods manufacturing space. They have the potential to transform and disrupt the market. Industry 4.0 technologies such as additive manufacturing and AR/VR are creating new markets and lowering the entry barriers for some smaller manufacturers.
- Environmental stewardship: Beyond sustainable manufacturing, which pursues economically and environmentally friendly processes, environmental stewardship is a holistic approach that leads and promotes the use of cost-efficient, safe, and ecologically friendly processes.
- Disposable income: An increase in disposable income for the middle-class demographic directly impacts this sector as business ramps up after COVID-19.
- Economic outlook: Economic outcomes influence this industry at a higher degree given the higher price and lifespan expectations of the products made.
- Trade agreements: Global protectionism and trade disputes have reshaped the landscape; offshoring has been reduced and onshoring has grown.
- Capital investment: Businesses need to be more creative in order to deal with the large capital investments needed for sustainable manufacturing processes. Affordable and sustainable credit in developed countries offers them a distinct competitive advantage.
Durable goods industry facts
- Contribution to GDP
- Small manufacturers
- Strong worldwide growth
- Unfilled positions
- Top in innovation funding
The hard numbers
- Contribution to GDP: Manufacturing is one of the biggest contributors to the US GDP. In fact, for every $1 spent in manufacturing, another $2.79 is added to the economy.
- Small manufacturers: Most manufacturers in the US are small. A 2017 survey identified 248,030 manufacturers; all but 3,914 were small (fewer than 500 employees).
- Strong worldwide growth: Over the past 19 years, worldwide manufacturing has multiplied 2.67 times, from US$4.8 trillion to US$12.75 trillion.
- Unfilled positions: Manufacturing is projected to need 4 million jobs filled by 2030, with 2.1 million expected to go unfilled as workers attempt to pursue other, more modern career paths.
- Top in innovation funding: Although it is difficult to retain people, the manufacturing sector performs nearly 62% of all private sector R&D at approximately US$293.6 billion in 2019 and should be leveraged to compel workers to stay within the sector as it continues to grow.
(Source: National Association of Manufacturers)
Durable goods competitive landscape
- Digital transformation
- Digital workforce
- Contactless interaction
- New competitors
Transformation of durable goods
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Digital transformation: Increased dependency on digital infrastructure will create a migration and sustainability challenge for the IT organization.
Legacy migration needs to be addressed as part of the digital transformation strategy, which must be timely due to the inherent cybersecurity risks associated with legacy equipment and software. - Digital workforce: New conditions are generated by Industry 4.0 and an expanded remote workforce, as well as accelerated use of IoT, AI, blockchain, and cobotics that are driving the need for rapid change. New training programs must be put in place to upskill and reskill staff with a focus on technology, process, and effective communications.
- Contactless interaction: COVID-19 created many instant changes for business, and changes such as contactless processes will be retained as workers wish to remain safe from new variants.
- New competitors: Some technologies will bring new competitors as the entry barriers are lowered or removed altogether for certain sectors within the industry.
Critical challenges in durable goods IT
- Legacy
- New technology in a traditional culture
- New competition
- Adjusting the business model
Catching up with rapid transformation
- Legacy: Legacy systems are an essential part of the current operations for many manufacturing businesses and cannot easily be replaced by some of the newer technologies. They become more costly to service as providers, skills, and parts are in short supply.
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New tech in a traditional culture: The introduction of new technology will generate the need for:
- Overcoming a weak digital culture, which will create an obstacle for new technology adoption and proliferation in the organization.
- A skills-level review of the organization’s workforce and development of retraining programs.
- The need to leverage new technology in an agile way, as big bang replacement isn’t practical from a skills and cost perspective.
- Avoiding disruption of the 100% uptime business model.
- Balancing innovation and operational lights-on support with standardization.
- New competition: Globalization means new competitors.
- Adjusting the business model: Products will need to be converted to a subscription-based operating model in order to keep pace with industry-wide business model changes.
Critical opportunities in durable goods IT
- Expanded horizons
- Faster design-to-market cycle
- New Industry 4.0 technologies
- More customization
- Takeover business opportunities
New tech and new markets
- Expanded horizons: New markets, new partnerships with customers, and converting products to services will expand business opportunities as well as more predictable revenue streams.
- Faster design-to-market cycle: Accelerated design and testing processes will bring products and services to market faster, with improved quality.
- New Industry 4.0 technologies: Augmented reality, AI, blockchain, and digital twin technologies are examples of technology that can be leveraged for increased ROI in the business.
- More customization: Higher degrees of customization and flexibility will be enabled by new visual codeless technologies. Traditionally expensive customization can now take place at a much lower cost and an extremely rapid pace.
- Takeover business opportunities: Legislative changes create complications for the business while also creating opportunities for takeover business as some businesses exit legacy markets for emerging markets. The automotive sector is a good example of where emissions standards cause some businesses to exit or pivot away from the gasoline engine market.
Info-Tech’s approach
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Establish the Scope of Your IT Strategy
Establish the scope of your IT strategy by defining IT’s mission and vision statements and guiding principles. -
Review IT Performance From Last Fiscal Year
A retrospective of IT’s performance helps recognize the current state while highlighting important strategic elements to address going forward. -
Build Your Key Initiative Plan
Elicit the business context and identify strategic initiatives that are most important to the organization and build a plan to execute on them. -
Define IT’s Operational Strategy
Evaluate the foundational elements of IT’s operational strategy that will be required to successfully execute on key initiatives.
Info-Tech’s methodology for IT strategy
01: Business Context |
02: Key Initiative Plan |
03: Operational Strategy |
04: Executive Presentation |
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Outputs |
Business Context Information for Step 2:
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IT Strategy Information for Approval:
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Operational Strategy Information for Step 4:
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Executive Presentations for:
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Service |
Pre-Workshop Industry-Specific Guided Implementation |
IT Strategy Workshop | IT Strategy Workshop | IT Strategy Workshop |
Info-Tech’s methodology for IT strategy
Blueprint deliverables
The IT Strategy Workbook supports each step of this blueprint to help you accomplish your goals:
Goals Cascade Visual
Elicit business context and use the workbook to build your custom goals cascade.
Initiative Prioritization
Use the weighted scorecard approach to evaluate and prioritize your strategic initiatives.
Roadmap/ Gantt Chart
Populate your Gantt chart to visually represent your key initiative plan over the next 12 months.
Key deliverable:
IT Strategy Presentation Template
A highly visual and compelling presentation template that enables easy customization and executive-facing content.
Info-Tech offers various levels of support to best suit your needs
DIY Toolkit
"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful"
Guided Implementation
"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would be helpful."
Workshop
"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."
Consulting
"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."
Diagnostics and consistent frameworks are used throughout all four options.
Guided Implementation
What does a typical GI on this topic look like?
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Phase 2 |
Phase 3 |
Phase 4 |
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A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.
A typical GI is between 8 to 12 calls over the course of 2 to 4 months.
Workshop Agenda
Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889
Session 0
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Session 5
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Activities |
Elicit Business Context0.1 Complete recommended diagnostic programs. 0.2 Interview key business stakeholders, as needed, to identify business context: business goals, initiatives, and the organization’s mission and vision. 0.3 (Optional) CIO to compile and prioritize IT success stories. |
Establish the Scope of Your IT Strategy1.1 Review/validate the business context. 1.2 Construct your mission and vision statements. 1.3 Elicit your guiding principles and finalize IT strategy scope. |
Build Your Key Initiative Plan2.1 Identify key IT initiatives that support the business. 2.2 Identify key IT initiatives that enable operational excellence. 2.3 Identify key IT initiatives that drive technology innovation. 2.4 Consolidate and prioritize (where needed) your IT initiatives. |
Build Your Key Initiative Plan (cont.)3.1 Determine IT goals. 3.2 Complete goals cascade. 3.3 Build your IT strategy roadmap. |
Define Your Operational Strategy4.1 Identify metrics and targets per IT goal. 4.2 (Optional) Identify required skills and resource capacity. 4.3 Discuss next steps and wrap-up. |
Document Strategy5.1 Complete in-progress deliverables. 5.2 (Optional) Set up review time for workshop deliverable. |
Outcomes |
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