Using technology to save on labor costs and resource expenses is a top investment priority for nearly every company, particularly those in the manufacturing industry. More cost-efficient facilities, automated order management and data-driven customer fulfillment can reduce the amount of money and time that must be poured into these areas. However, in some cases, the increasing use of technology is bringing about a rise in overall IT costs. Many companies have experienced firsthand the issue of a technological innovation that hasn't significantly decreased labor costs or sped up operations, because the staff and resources needed to maintain expansive IT environments ends up outweighing many of the promised benefits.
As IT systems grow larger and more complex, many organizations halve recognized an unsustainable approach and have moved to correct it. There are ways that this effort can be successful, if a business utilizes smart strategies at targeted improvement. In other cases, however, blanket reductions or decisions lacking in context can create even more headaches.
Evolving IT environments causing problems in manufacturing
The manufacturing industry has traditionally relied on technological tools to decrease labor and transportation costs, but increasingly can benefit over the use of applications and analytics to improve order management and fulfillment processes. The endeavor to drive IT value from end to end is causing problems for many manufacturing companies, however.
One recent survey by Ipanema Technologies found that 83 percent of manufacturers have experienced an increase in IT complexity as a result of new applications, a wider user base, expanded portfolios and an influx of cloud computing, according to Manufacturing.net. With this increase in IT complexity has come an increase in performance issues. These include:
- 33 percent of manufacturers have experienced an increase in application-driven downtime
- Only 20 percent of firms have had a decrease in application downtime in the last 12 months
- Poorly functioning IT systems have led to lower employee productivity for 42 percent of firms, products being shipped late for 42 percent and a rise in customer complaints for 38 percent
- Only 27 percent of companies expressed confidence in their capacity to deploy new applications seamlessly and quickly
- 70 percent of organizations do not have confidence to rapidly troubleshoot and amend performance problems in their applications
- Overall, the research found that IT application performance issues could be reducing revenues by an average of 20 percent
With only 31 percent of IT decision-makers envisioning IT budget increases in 2015, businesses, especially in the manufacturing and supply chain industries, will have to find ways to do more with less.
Addition by subtraction: Benefits of outsourcing
These survey results, along with the lack of projected IT budget increases, illustrate that the best way for many companies to effectively curtail their IT spending, and add the difference to the bottom line, is to move it out of the organization to a knowledgeable, trusted partner. Businesses have a litany of options when it comes to working with a provider of managed services for the supply chain, from advice about selecting the right tools and implementation assistance, to a full-scale model that enables a company to take a hands-off approach while the provider takes care of administration, maintenance and end-to-end system compatibility. Carefully selecting and partnering with the right managed services provider can take the burden of outdated and complex IT environments off of the backs of internal IT staff - and keep it off, enabling the company to do more with less.