As a manufacturer, you probably know the benefits of your business moving operations to the cloud – streamlining back office functions, and maximising production and product development to gain a competitive advantage.
For many, it’s a no-brainer. Yet manufacturers often struggle to persuade their senior leadership team to invest in switching manual processes and legacy software for cloud technology platforms.
Many execs have been burned in the past by failed IT transformation projects, which can carry a high cost in terms of capital expense.
But with a choice of cloud technology solutions – which can be tailored to meet the specific needs of your business – many of those risks have been ‘designed out’ for manufacturers.
Read on to find out how you can persuade your senior management team to invest in a cloud strategy to accelerate your business growth.
Here’s what we cover:
The challenge of convincing the leadership team
Traditionally, the quickest way to persuade leaders to make investments is by highlighting potential financial savings.
However, that’s a risky strategy with cloud transformation projects, because in the first five years, you may not be able to deliver any significant cost reductions.
You may even see costs go up initially as you start migrating systems, training employees, learning lessons and re-configuring your solutions to work in the cloud.
Other execs may fear potential business disruption, data loss, security issues and internal resource tied up on the project.
It’s vital you address all these concerns early on, by positioning the adoption of cloud technology as a long-term strategy, rather than a short-term gain.
To reassure leaders, adopt a robust project planning approach. And make sure you report regularly on results and insights to maximise transparency and communication.
How to build a business case
When it comes to developing a business case for making the move to cloud technology, it’s best to focus on four main benefits: agility, efficiency, business growth and future proofing.
We go into more detail on this below:
Your business or organisation will be able to move faster, do more and, most importantly, outperform your competition by being in the cloud.
You can save time and money by outsourcing the management of data centres, and associated routine IT maintenance work, such as support, patching and configuration to a third party.
This means your IT team can save hundreds of hours per year on server configuration time alone, with a new focus on value-add activity without needing to increase headcount.
Running on a cloud platform could save your team time as well as adding flexibility and potential. The net result is that without needing to increase headcount, your team will be able to do more that directly benefits the business.
Grow your business by freeing up time spent on manual, repetitive, low-value transactions to refocus on operational efficiencies, competitive differentiation and implementing new technologies such as artificial intelligence, the Internet of Things and machine learning.
You run a manufacturing business, not a cloud computing company. It makes sense to focus on what you do best, while using cloud technology to ensure you run things more efficiently (alongside other benefits).
Once such example might be to adopt business management software that runs in the cloud, so you can manage the likes of your supply chain and finances effectively no matter where you are.
Meanwhile, AWS and Microsoft, for example, build infrastructure platforms, manage database engines, and application platforms that enable businesses to write code, deploy it and start feeling benefits immediately.
Businesses traditionally buy infrastructure as a capital cost, which is written off over time. This brings pressure to make the right decision on significant spend.
In contrast, cloud technology services are paid for as a subscription, or operating cost. This gives you freedom to change your mind, and achieve a level of agility – beyond competitors who may be lagging due to a restrictive strategy.
Traditionally, manufacturers had to buy as much computer power as they’d need on their busiest day. But when working with major cloud providers, you only pay for the data you use.
Global brands scale capacity automatically to cope with any additional load.
Implementing change on a small scale
In terms of delivery, it makes sense to pilot your move to the cloud with an aspect of business that is important but not critical. This way, you can achieve early success stories and momentum, while establishing team communications, issues resolution and processes.
With a framework in place, you can apply experience – and iterate the process – across more strategic aspects of business.
It’s often best to leave more complicated, older products and legacy software pieces until later because they’re trickier to get on to the cloud.
Key performance indicators to consider
As one of the world’s largest providers of cloud services, AWS offers a lot of free advice around best practices for designing and running workloads in the cloud.
It’s devised a five-point guide to measure how well your architecture aligns with cloud best practice. These are:
- Operational excellence: How to run and monitor systems and continually improve processes to deliver business value. Topics include automating changes, responding to events, and defining standards to manage daily operations.
- Security: What steps you can take to protect data, security and systems.
- Reliability: How you can spot hitches, adapt and resolve any issues to ensure systems and products do what they’re supposed to do, when they’re supposed to do it.
- Performance efficiency: How to use IT and computing resources efficiently – including how to get the best value from cloud services.
- Cost optimisation: Avoid unnecessary cost by understanding, analysing and controlling spend.
Further roll-out of cloud technology
Once you’ve taken the plunge and started moving services and products to the cloud, think about the best way to build momentum.
There are six ways to move an on-premise application to the cloud, known as ‘the 6Rs’. Which of these you choose will vary, depending on which migration journey is best-suited to which product:
- Rehost: Also known as ‘lift and shift’, means moving applications straight to the cloud more or less exactly as they are.
- Re-platform: Changing some components but leaving products pretty much as they are.
- Re-purchase: Replacing the application entirely with cloud services. An example might be discontinuing the licence for an on-premises ERP (enterprise resource planning software) system and using the same system as a service in the cloud.
- Re-architect: Fundamentally change how the software works or replace parts of it.
- Retain: Leave a product as it is if it’s just too complicated to move on to the cloud or would not realise significant time or agility savings.
- Retire: Switch off a particular on-premises product and transfer its functionality to a different cloud-based product or system.
Communicating results to the leadership team
Once you’ve moved products and services to the cloud, and delivered early wins, you’ll be in a strong position to share results and measures with your leadership team.
This, for example, could be the cost to serve each customer, or the cost per sale on your website.
With real data at your fingertips, you can open up a more informed conversation about potential improvements for the future.
Final thoughts on moving to cloud tech
It’s critical for success that you persuade the C-suite that moving to the cloud is not just a tech activity – it’s a way of driving business growth and profit.
You’ll need to clearly communicate project goals to everyone, at all levels, within your business and create a culture where teams accept a more agile way of working in order to realise opportunities and rewards.
With teams on board, your manufacturing business will be free to focus on value-add activities and fulfil its true potential.
Recommended Next Read
Generative AI in 7 easy steps: A practical business guide
Never miss an episode
Subscribe by email and get Sound Advice delivered to your inbox every two weeks with the Sage Advice newsletter with a ton of related articles, templates and problem solving guides for small businesses so you can put our sound advice into practice.