The disconnection dilemma: The potential pitfalls of rapid digital transformation in manufacturing

manufacturing

As Australian manufacturers make their way out of a challenging couple of years, the sector continues to face challenges due to continuing supply chain issues, high costs and inflation pressures.  

As highlighted in MYOB’s recent mid-market research, technology has a critical role to play in addressing these challenges for the industry. While most businesses have a handle on data and its role in guiding business decisions, major advances in automation, AI and robotics will be key to manufacturers increasing their productivity and efficiency to meet market challenges.  

Manufacturers that are further along their digital transformation journey are well-placed to leverage new technologies – but those businesses are few and far between. As many as seven in 10 Australian business are making decisions without full visibility over their business.  

While the COVID-19 pandemic accelerated digital transformation for many businesses, the unfortunate reality for many organisations is that they find themselves in the position of managing an ecosystem of disconnected business tools.  

In the race to digitise processes across key workflows, businesses look to software solutions to streamline and connect operations. Without integration, these tools and processes won’t provide the productivity gains promised if they remain disconnected. 

Research from Forrester found employees are wasting 12.5 hours each week due to ineffective digital solutions, which equates to an annual cost of over $2.7m for each business employing 100+ people. 

Not only can digital disconnection hamper productivity and lead to higher costs with multiple subscriptions, a lack of connectivity between systems and processes can lead to significant strategic risk. Without integration of data and visibility over business health, it can make it difficult for businesses to add capabilities to their team and services or adapt the business as they need to. For manufacturers experiencing disconnection, it may widen the gap between their business and competitors who are better positioned to take advantage of Industry 4.0 technologies.  

With the majority of manufacturers highlighting digital technology as top of mind for many as they restore their operations, businesses need to consider how best to connect systems through the entire value chain to ensure continued growth and resilience. 

Core technologies, like integrated cloud-based business management platforms, are a foundational investment to respond and adapt to an increasingly uncertain environment. With a solid data infrastructure, companies can begin to ground decision-making in accurate, real-time data from across the business, and identify areas of opportunity for productivity gain or value creation. 

Manufacturers that are proactive in resolving data disconnection before its influence becomes a negative one, will have a better chance of achieving the growth they’ve set their sights on.