Phil Lewis, vice president, solution consulting, EMEA, Infor says manufacturing industries have become critical indicators of how businesses will adapt to a post-COVID global economy
The Coronavirus pandemic of 2020 has arguably, had more impact on society and business than any event since the Second World War, with entire countries closed and some truly staggering political interventions.
But as countries move tentatively out of their respective lockdowns, the employment- and investment-intensive manufacturing industries have become critical indicators of how businesses will adapt to a post-COVID global economy.
Initial freeze
Undoubtedly, manufacturers suffered a huge shock to the system as the early economic impact of COVID19 hit. At Infor we saw many businesses in all industrial sectors freeze both ongoing projects and planned investments.
Interestingly however, this did not last. Paralysis and fear quickly evolved into an attitude of learning and adaptation, driven by an acceptance of any changes forced by COVID19. Indeed, of all the business sectors we serve, we saw manufacturers and supply chain businesses realise that they had to keep moving and substantially embrace change to survive and grow. Many – though not all – of these companies sought to come out of the COVID19 pandemic stronger than before – and saw their investment in technology as a key part of this strategy.
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Quicker implementations
Within the timeframe of the lockdown, for many ongoing projects, a lot of the internal resources and stakeholders have found themselves being able to minimise the impact of ERP / digital transformation projects on day to day operations. The net result was that this led to some quicker implementations.
A key factor in this has been the manufacturing sector – and other industrial markets – embracing the possibilities of remote working. The aggressive increase in the use of collaboration tools and platforms and the realisation that projects can be completed in a remote context just as easily as an on-site one, will deliver huge change to both manufacturing and technology industry going forward.
Continuity and risk reduction
These customers that are embracing collaboration – and the other benefits of the cloud – will expect to see a big return on their investments, including fast and easy access to business-critical software beyond Zoom or Teams. Increased remote access to data, ERP apps and systems offers not only business continuity and a reduction in risk, but better agility and responsiveness. The first two facets are part of a survival strategy but the latter two demonstrate the opportunity for manufacturing technology to drive growth, even amidst large scale, ‘Black Swan’ events.
This ability to move into a phase of growth is clearly part of what customers are looking forward to. There is a palpable mindset shift – COVID19 has forced an appreciation and acceptance when it comes to cloud within manufacturing. The appetite has increased, although so has the expectation of faster ROI.
Cloud is now a reality for complex busisness
Of course, there are other factors that have got manufacturers to this point regardless of COVID-19. The main reason is choice as it is only now that cloud enterprise applications are fit for purpose. Traditional ERP applications can often be an inadequate foundation for getting digital business done for complex businesses such as manufacturers – and intelligent, extensible software, based in the cloud is now a reality for those organisations.
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Another factor that is changing is the role of the IT department within manufacturers. IT leaders are now far more aligned to what happens in the business. This means that their choices are now much more strategic, grounded in business processes rather than being led by technological functionality. Taken together with industry-specific solutions, this leads to a much faster impact.
Demand for auditing and traceability
There have been some other interesting and novel impacts of this continued investment, specifically linked to the post-Coronavirus world. The idea of COVID-secure workspaces increases the demand for auditing and traceability when it comes to the office, factory, and warehouse. There is a growing governance and compliance driver that will necessitate the use of technology to track which facilities and assets are cleared for use.
This has led to updates to our EAM software, tracking and tagging the cleaning of work places – showing that continued investment in technology will not help companies emerge from COVID faster and in better shape, but that it will also be part of keeping people safe in a post-COVID world.
Offsetting ‘Armageddon’
Of course, we are also realists and recognise that there will be some contraction for the manufacturing sector. There have already been substantial job losses, but there is also a lot of positive conversations that should offset substantially some of the Armageddon-style figures that some have predicted. This is because customers are taking a long-term view, focusing on what technology will have the greatest impact on the ‘other’ side of the pandemic, and still investing.
