ECI Software Solutions’ Danny White discusses timing, challenges and opportunities for digital transformation.
Two years after the pandemic’s onset, which propelled companies worldwide to migrate business to the cloud, continued remote work, labor shortages and supply chain issues are still pushing anyone wanting to stay competitive toward greater cloud adoption.
“Cloud strategies have been moving at great momentum for a while now, but they’re extremely important to help address things that have been amplified by the intersection of the pandemic and technology,” said ECI Software Solutions Senior Director Danny White. “And so, the things you see pervasively in terms of industry trends are the same things that we’ll likely see from customers.”
White, an engineer by training, has 25 years of experience in enterprise software selection and implementation. He deployed cloud product lifecycle management software at Autodesk before serving as vice president of Product Management at Epicor. He now has a similar role at ECI, where he continues to approach his work by looking at things through the customers’ eyes.
Many of the challenges companies face in 2022 are longstanding issues put under a magnifying glass by the pandemic, with supply chain disruptions as bad as White has ever witnessed. Additionally, the impact of the struggles aren’t mere statistics but are on full display in the public sphere, with pressure hitting consumers and small businesses especially hard as they battle inflation and experience product and service shortages.
Amid the upheaval is the sometimes complex intersection between cybersecurity, digital privacy issues and government regulation. This is a critical area for companies looking to adopt or expand their cloud computing.
One regulation White cited as being particularly important is the International Traffic in Arms Regulations (ITAR), or, which is a set of U.S. State Department rules that control the import and export of defense-related products, including technical data. However, many small and midsize companies that are part of the defense supply chain aren’t yet following the rules—which is seen as a national security threat. With greater enforcement on the horizon, it’s a wise move for companies to obtain ITAR certification and comply with the policies.
ITAR isn’t the only regulation companies need to be monitoring. According to White, the Cybersecurity Maturity Model Certification (CMMC) is a growing topic in industry discussions because of its uncertainty. The program is designed to enhance defense-related cybersecurity due to increasing breaches such as the SolarWinds hack in 2020. With a new set of rules being implemented for CMMC, any company doing business with the federal government could be subject to the program within five years under a phased adoption approach.
“Many manufacturers are just now coming to grips with the idea that these things are here to stay and are turning to the cloud to achieve the preparedness and resiliency that’s required to survive in this environment,” said White.
Although many industries are experiencing some strain due to macro-level pressures in the system, cloud adoption doesn’t merely have to be reactive. White noted a glimmer of better days ahead with the recent Institute for Supply Management’s annual forecast indicating pent-up market demand. The idea is that once businesses are freed of pandemic impediments, projections show manufacturing revenues, imports, exports and capital expenditures all on a growth trajectory.
“It’s important to take on the challenges and headwinds, but I think it’s equally important that manufacturers take advantage of this tremendous growth opportunity,” said White. “I think it will lay a foundation for many businesses’ successes for the years ahead.”
However, an integral part of achieving that future success is timing. Despite peer pressure to consider cloud adoption, many companies lag in their transition due to a lack of skills, resources or knowledge about what they need from the cloud. However, White expects to see substantial cloud investment in 2022 and beyond, given the myriad opportunities.
The main opportunities created by using the cloud to improve efficiencies involve streamlining interdepartmental communications and standardizing business processes and best practices. In addition, the cloud can enable manufacturing companies to access business intelligence tools that provide real-time insights and projections about future material shortages, degrading markets or quality issues. So, harnessing the cloud can have far-reaching effects on a manufacturers’ ability to compete in the increasingly digitalized marketplace.
ECI works daily with companies adopting cloud services to assist with successful implementation. White suggests establishing a solid project team and executive sponsorship first when taking initial steps toward a digital transformation. Next is creating big-picture goals that begin with minor changes. Part of this process is identifying current business challenges that the cloud could solve, such as supply chain issues, high cost of labor or access to new markets. Another aspect is understanding key performance indicators, having an implementation time line and emphasizing data migrations. White said that data migrations are especially vital to the success of projects and that the technology to achieve data migrations has evolved considerably over the past 5 to 10 years.
“We deal with a lot of businesses that are struggling to embrace and figure out how to execute, so they need to clearly articulate what their key points are,” White said. “They need to underpin that with a strong project team and commitment from exec sponsorship.”
Technology has already dramatically changed the world of manufacturing, and supply chains are one area that can benefit from cloud adoption in particular. While factories of yesteryear were very manually intensive, tasks like inventory management can be performed using drones that can read QR codes on pallets and transmit the information to mobile apps. Yet, problems can arise even with human hands not doing the heavy lifting, such as with the Suez Canal bottleneck that occurred in March 2021. That’s where cloud adoption can help through a level of planning and forecasting that makes businesses more resilient—even if a critical project component is stuck on a cargo ship at the Port of Los Angeles, for example. Greater foresight about potential issues equals better supply chain management and the ability to weather challenges as they arise.
Enterprise resource planning is another area in which the cloud can help manufacturers handle supplier relationships because it enables constant communication in uncertain and changing environments. For example, White said that being able to quickly and easily identify where a product is at any point during shipment and delivery is a relatively new ability that’s become critical for manufacturers.
Cloud adoption may be the solution to many manufacturers’ challenges; however, working in the cloud for many small and midsize companies also means handling potentially massive quantities of data. ECI frequently works with small manufacturers to help with monitoring data security and getting systems up and running.
What’s promising for small companies is that the innovation that’s taken place over the past few years with the Industrial Internet of Things (IIoT) connecting machinery on the factory floor has made cloud computing much more affordable for smaller industry players. Today, a small company with five employees can afford to adopt several advanced technologies that were previously out of reach, helping to maximize the input and output of factory machines. Still, preparing an entire distributed network with a layered security model takes time, knowledge, skill and financial investment on both an initial and recurring basis.
“There are solutions tied to edge computing, and where we see those specifically in today’s environment is in areas like machine-to-machine communication, IoT and machine intelligence,” explained White. “We have those areas where you’re starting to see edge computing and the benefit of edge computing really leveraged throughout manufacturing and again pushed down to the affordability level of smaller manufacturers.”
The ultimate digital transformation goals will vary by company. Some will fully transition 100 percent of their customer base to the cloud, while others with more physical footprints will aim for 60 to 80 percent cloud adoption. Although there’s no magic number, White expects there to be rapid cloud migrations ahead.
“What’s notable is it has accelerated significantly from where it was two years ago,” White said. “That’s complementary to the folks who will benefit from it—the SMB manufacturers, and also the providers in this space that help serve those needs and step up to provide real solid cloud-based solutions.”
