Enabling a Radical Makeover for High-Performance IT

The classic “heavy metal” industry remains dotted in the popular imagination with smokestacks and blast furnaces, providing the guts for the world’s manufacturing facilities. Yet this brutish image belies the complex technologies that support the industry’s diverse sub-sectors.

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Now, as the industry finds itself in the midst of global growth and resurgent manufacturing activity, rapid infrastructure growth is presenting both huge opportunities and new pressures. As they expand in new markets, global conglomerates are searching to balance cost, quality and customer service. With supply chains stretched to encircle the globe, industrial products leaders are finding that information technology (IT) is already a critical enabler today—and will be asked to do even more tomorrow.

Four pillars

High-performance IT research conducted recently by Accenture found that industry leaders have achieved superior results by demonstrating mastery across four “pillars” of high performance: global flexibility, pricing power, excellent productivity and people power.

Global flexibility—from sourcing of raw materials and production to tightly connected distributors and dealers, common global processes and information systems—supports superior supply chain capabilities. In fact, more than three in four survey respondents reported seeing IT optimizing their supply chains, and nearly half reported making IT investments to enhance advanced engineering and collaborative product development.

Pricing power and innovation demand that a company understands customer needs and delivers products the market is seeking—a task easier said than done in a rapidly shifting commercial landscape. But high-performance industrial products leaders are using rigorous marketing analytics to boost product portfolio management and provide sophisticated service offerings and smart products.

High productivity depends on programs ranging from cost-cutting to strategic procurement, financial flexibility and post-merger integration.

People power, based on a continuous learning environment and ongoing retraining of workforces to align leadership and talent development with company values and strategies, underlies the Industrial Equipment sector high performance.

Our research indicated that companies will ask even more of IT in the near future. Almost three-quarters (72 percent) of our respondents said that their IT units are not performing at a high level in all areas. What’s more, respondents reported seeing large gaps in capability opening up in the near future. And nearly eight in 10 (77 percent) reported strong aspirations for a fully integrated business enterprise. Unfortunately, it appears that barely half of industrial products companies (49 percent) enjoy this level of integration today.

Service-oriented architecture (SOA) is already an important “to-do” for nearly three-quarters of companies, which presumably expect that it will prove valuable in integrating systems and solutions across different business units. Two-thirds of respondents (66 percent) seek advanced business intelligence, with fully integrated solutions for informed decision-making; slightly more than one-quarter (27 percent) report having this degree of insight today. Similarly, 62 percent of companies seek to have comprehensive online interactions with consumers across the entire enterprise, more than double the 25 percent that report having this capability today.

Companies aiming to accelerate their evolution should emulate leaders in five key areas. First, leaders are more likely to utilize key performance metrics to align IT’s work with the performance of the broader business. They are also more likely to be early adopters of leading-edge technologies, adopting them in a disciplined manner with a focus on what creates real value. Leaders manage and analyze information with strong analytic capabilities. High-performance IT organizations drive Web enablement and achieve significantly higher online utilization levels. And finally, high-performance IT operations champion enterprise integration and show strong interest in SOA’s future potential.          

 

Paul Loftus, paul.loftus@accenture.com, is North American Practice lead for Accenture, a consulting firm in New York City.

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