Article By Terry Smagh, Infor Senior Vice President and General Manager, APJ
Australian manufacturers are facing growing pressures amid new global trade policies and their reliance on US demand. Concerns are rising over increased foreign competition and higher import costs, which could negatively impact overall GDP and industrial activity in Australia and New Zealand.
Even as the agriculture and mining sectors are expected to stay resilient, the strain on Australian manufacturing is evident. It has always been an industry of precision, efficiency, and control. More recently, the industry has been grappling with higher energy and material costs, workforce shortages, and geopolitical uncertainty, all while trying to meet changing customer expectations.
The most obvious solution might be to look to technology to support resilience and agility, but many manufacturers are still slow and stubborn when it comes to adopting cloud technology compared to other sectors. There is a bias toward physical assets rooted in tradition, with organisations still treating IT infrastructure as a back-office function rather than a driver of innovation.
This mindset, combined with the challenge of modernising legacy systems and finding the right cloud solutions, has left many ANZ manufacturers stumbling in the dark, trying to patch together disconnected applications. Despite the potential of digital tools to boost productivity and strengthen resilience, there is a reluctance to take the lead and adopt a strategic, tailored approach to digital transformation.
The only way is up
This is particularly striking because Infor’s latest study, How Possible Happens, which surveyed 3,600 global decision makers to uncover how organisations generate real value from their tech investments, found that a vast majority of organisations (80%) agreed that success depends on the potential adoption of new technologies. Furthermore, 78% expected to increase investments in technology by 20% or more over the coming years.
Even though organisations report an increase in profitability from more investment in technology, including higher profits from upskilling their staff’s technological capabilities, many are left disappointed by the lack of significant improvement in the business. This frustration largely stems from disruptive new solutions that make bold promises of success – but struggle to deliver.
Regrettably, many organisations fail to assess the technology capabilities and outcomes needed to address their pain points, at the very outset. For instance, Infor’s research shows that successful organisations have a deep commitment to customer outcomes. They integrate customer feedback into every aspect of their business, striving to anticipate their customers’ needs and being accountable for them – from using smart technology in their products to leveraging customer insights in product innovation.
This is just one metric for success. Industrial manufacturers will have to navigate many more if they are to enjoy favourable business outcomes.
A change in attitude
The Achilles heel for organisations in their digital transformation journeys is not necessarily around the new technology itself, but the mindset and cultural change required to derive value from it. For example, studies show significant productivity improvements from the use of AI – from enhancing operational efficiencies and effectiveness – to doing things better, faster, and cheaper.
Evidence suggests that AI solutions can boost customer service, shorten sales order processing time and help agents respond quicker to customer enquiries. AI tools can facilitate more complex use cases, such as enabling organisations to build customised outputs; for example, a recommendation engine embedded into the sales order screen.
Embracing the power of advanced technologies like GenAI and Process Intelligence can further help mitigate risks and respond more rapidly to the turbulent and unpredictable nature of the modern world. Maximising these tools distinguishes top-performing organisations apart from the rest.
The writing is on the wall – but are Australian manufacturers open to investing in this technology to improve business productivity?
No one-size-fits all approach
The answer lies at the sweet spot between investing in the right technology, developing efficient processes, and building an agile and proactive company culture. The cloud has a catalyst for competitive advantage. Early adopters are using the cloud to reduce downtime, improve supply chain agility, and unlock new business models. A data model is vital to create a blueprint to guide how data is stored, accessed, and managed.
Any new solution should directly link to value creation opportunities and measurable outcomes – something that is complex to achieve without the right approach in place. This could look like organisations integrating AI solutions with their data platforms, bringing data together for a holistic output to unlock value. The cookie-cutter approach to productivity is a thing of the past. Instead of buying whole software solutions, it is possible to purchase composable business applications that can be reused and recombined to create a tailored, differentiated solution.
By continually optimising processes, embracing the power of advanced technology, pushing data in decision-making and keeping customer requirements front and centre, ANZ manufacturers will find that they can increase overall business productivity and boost competitive advantage. Ultimately, the organisations that succeed will be those ready to evolve their processes and fully embrace data-driven readiness.
