The strong link between business profits growth and the use of cloud to develop new solutions and new functionality to rapidly launch offerings to market has been proven over time and backed by research. The cloud, with its potential to generate new value from data and drive the realization of new revenue sources, is a big boon.
However, to unlock these profits, organizations need to have at least 60 percent of their systems in the cloud.
Despite the recent acceleration in cloud adoption, fewer than one in five manufacturers have crossed the 60 percent threshold to reap these potential profits.
The deterrent most often is the manufacturer’s inability to capture and articulate the full extent of the cloud’s promised value that then hampers the flow of sustained additional investments.
The challenge lies in the inherent struggle to evolve cloud investments from being a technology-sponsored, near-term oriented path to becoming fundamental enterprise investment powering the ability to bring capabilities quickly and continuously for the business over the long term.
Without this particular vision and the operating model to drive it, manufacturers will struggle to build their truly cloud-powered enterprise.
Here is a blueprint for a potential solution:
For a manufacturer to transition into cloud mode, a good first step would be to explore how legacy assets (even in part) can be monetized upfront to deliver immediate operational expense savings and underwrite the capital outlay needed to fund advances in infrastructure and technology for the cloud transformation.
The next move would be to take advantage of services, solutions and platforms that can act as force multipliers for the transformation across areas like smart manufacturing, connected services and customer engagement.
In most cases, this includes a hierarchy of cloud assets—think learning assets, engineering assets, platform assets and business assets—that make for a comprehensive solution.
This is also a great time to put together the team with the right skills and experience to work grassroots up to bring business ideas to life.
With this in place, a manufacturer is now ready to build the cloud consumption layer over the foundational resources layers.
The resources layer ensures both efficiencies and governance while allowing for the various units of business to continuously and quickly orchestrate their cloud transformation.
This blueprint was explored and honed when we sought to implement an SAP ERP system for Siemens Gamesa. The implementation involved business units in seven countries, and it needed to be done in a stable, productive environment around Hybrid Azure cloud that replaced two legacy ERP systems.
The solution we co-engineered is designed to enhance business efficiency across the value chain and reduce time to market for new offerings. This transformation will enable real-time reporting and digital enabling of its workforce. It will also power the core of Siemens Gamesa’s next-generation applications landscape.
With this strong resources layer that is already driving business value, Siemens Gamesa is thinking bigger: It is all set for an industrialized rollout of its new ERP on cloud across more than 50 countries, for 22 manufacturing plants and covering all business units.
This is a great example of expanding value from the cloud.