There’s an image that industry 4.0 technologies cost a lot of money. This causes a dilemma, because SME manufacturers typically like short term ROI. So, we have a challenge.
The new generation of technophiles preaching the positives of a cyber future face a thankless task. I’ve watched young and incredibly intelligent engineers deliver compelling visions of the future to industry leaders only to be met with indifference and scepticism.
“What is wrong with these people?” the engineers must be thinking to themselves. “I’m painting them a picture of a better future and they’re determined to cling to the past.”
For the engineers and the technophiles, it’s very simple. Businesses that invest in the future will win; those that don’t will lose. I agree with this notion but I also know things are a lot more complicated in the real business world.
Good leaders ask lots of questions. They want to know: ‘How will this technology communicate with our ageing ERP system?’, ‘How does this image of a smart factory-fit with my brownfield site?’ and most importantly, ‘Where will the money come from to pay for it?’
Business leaders are time-poor individuals trying to serve two masters. They have to balance the expectations of their board of directors with the demands and needs of their employees. As a ‘recovering’ engineer and an industry leader, I’ve lived in both worlds.
I know from experience that just as accountants crave facts and figures, and IT experts live in a world of 1’s and 0’s, engineers like shiny new things. In their pursuit of the ‘new thing’ however, they rarely consider the priorities of their CEO. With any new technology, a CEO wants to know two things:
- How will it contribute to the overall productivity strategy?
- How soon will I get a return on my investment?
My secret to getting major Capex decisions over the line is to focus on those two key issues while making myself personally accountable for the outcome.
The stumbling block many organisations face is a board that keeps tight control of the purse strings. Boards have become wary of large investments that fail to materialise on the bottom line. They see it as their duty to protect the shareholders from such exuberant follies. Most would prefer to ‘slash and burn’ rather than ‘speculate to accumulate’. The knock-on effect is the leadership team stop asking for investment beyond the minimum needed to keep the lights on.
So how do we break this cycle and move forward? After all, we all know deep down that technology is vital for our business to survive and thrive. The answer is to start small, get some easy wins on the board and then look to scale up. Convincing a company to invest in a ‘smart factory’ is a daunting task but starting with smaller ‘smart’ goals and taking it step-by-step is the way to go.
LMAC Founder and Director