Digital Transformation Paving the Way for Manufacturing
The manufacturing industry has relied on legacy systems for decades but to remain competitive companies must embrace digital transformation.
While the pandemic forced many manufacturing companies to quickly pivot to address short-term problems, planning for the long term — and moving away from traditional legacy systems in favor of digital transformation — has become a key priority within the manufacturing industry.
In fact, a study by Fictivi found 95% of manufacturing industry leaders agree that digital transformation is essential to their company’s future success.
Legacy systems are often outdated and not integrated into the other solutions businesses use. These legacy systems — which include operating systems, ERPs, CRMs, hardware, and network infrastructure — create a barrier to more efficient operations.
COVID-19 accelerated the conversion of digital ideas into high-priority strategies, helping the manufacturing industry build more efficient, resilient and greener supply chains. Companies must keep that digital transformation momentum going, developing long-term strategies to implement automation into their workflows now, because if you haven’t already done it, you’re already significantly behind your competition.
A critical step to achieving that goal? Moving away from aging legacy systems that are now obsolete. Automation platforms can close the automation gap for complex B2B transactions by creating resilient, scalable operations, reducing operational costs, and cultivating frictionless relationships with suppliers and customers.
Legacy systems erode your business
Legacy systems were built in the past to address different customer mindsets and expectations from a different time. These legacy systems won’t — and can’t — meet customer expectations of today or the future. By continuing to use legacy systems, businesses risk losing customers to competitors who’ve committed to evolving by using modern tools to better serve their customers, drive operational excellence and grow their top and bottom lines.
Outdated infrastructure can’t keep up with modern solutions’ demands. It creates bottlenecks for processes and operating capacity within the manufacturing industry. These systems erode business value, and using them indefinitely is an invitation for disaster.
Legacy systems harm businesses by:
- Creating security risks. Legacy systems invite malware and security breaches because updating patches or security capabilities is challenging. An inability to keep up with updates leads to noncompliance with security standards, leaving businesses vulnerable to cyberattacks.
- Leading to dysfunctional workflows and processes. Outdated tech incapable of working with newer technology forces companies to work within its constraints, like finding compatible browsers, operating systems and plugins that work with its more limited capabilities.
- Requiring high maintenance and driving up operational costs. Because they’re older, legacy systems are expensive to maintain. Parts become difficult to source. Finding a qualified employee to manage it becomes more difficult. And antiquated software requires more expensive consultants to update, modify or repair.
- Creating compatibility, integration and scalability issues with new systems. Regardless of your system’s age, it must integrate with the apps you need to run your business. Newer and more flexible digital systems are designed to handle integrations smoothly.
The digital alternative to legacy systems
To survive and thrive in the new competitive manufacturing landscape and set the stage for future growth, manufacturers must implement technology designed to automate any process that can be automated. Modernizing legacy applications offers a host of benefits, including faster time to market, lower risks and increased cybersecurity, and digital competitiveness.
Companies spend billions annually on digital transformation initiatives, yet over half of B2B transactions still rely on emailing documents between parties and manually entering data into systems, for example.
This approach creates myriad problems including inaccuracies resulting from human error and slower processing times. To reap more benefits from digital automation, businesses should implement purpose-built automation platforms designed to close the automation gap for critical, complex B2B transactions. These platforms:
- Create resilient operations able to scale with businesses. As businesses grow, their operational capacity no longer depends on the size of their workforces.
- Reduce costs while supercharging growth, cutting operational costs by automating slow, inefficient and error prone manual processes.
- Improve customer service, making it easy for customers to do business with the company by building enduring, frictionless customer and supplier relationships without requiring them to change processes on their end, too.
When manufacturing companies automate processes, they increase efficiency, accuracy and agility. Freeing employees from mundane, repetitive tasks allows sales teams, for example, to connect and build relationships with customers and resolve problems requiring critical thinking and analytical skills. Updating systems also opens room for future growth and scalability, because your operational capacity doesn’t rely on the size of your workforce.
By automating processes, manufacturers increase efficiency, accuracy.
Digital transformation also more easily handles big data. Legacy systems tend to live within their own silos. Modern solutions remove the silos and enable organizations to implement one platform companywide to manage all data used to support business decisions. New purpose-built automation platforms effortlessly:
- Extract, translate and deliver complex, unstructured data into structured systems without human intervention.
- Define and apply business rules, logic, lookups and data validation to accommodate the unique commercial terms in B2B relationships.
- Resolve exceptions quickly with real-time alerts and user-friendly exception workflows.
Upgrading to cloud solutions offers higher levels of security and better performance, too. Cloud-hosted data is more secure from cyber attacks because the cloud can be updated easily to protect against current potential threats.
The digital revolution: Helping manufacturers stay ahead of the competition
Historically, the “if it ain’t broke, don’t fix it” mentality applied to legacy manufacturing technology due to the inconvenience and cost of implementing new solutions. That reluctance is understandable, because legacy systems are difficult to replace, modernization brings a certain level of risk, and many organizations fear the unknown.
It’s good business sense for the manufacturing industry to act now — to invest in digital transformation designed to maintain and increase process efficiency, maximize throughput and decrease expenses.
About the Author:
Judd Marcello, EVP & CMO at Conexiom. Judd has more than 25 years of B2C and B2B marketing leadership experience throughout the United Kingdom, Americas, Australian and European markets. Judd leads all facets of marketing for Conexiom.