Award designation earned by quality management software vendors with significant market presence and customer success documentation to validate their vision
FOOTHILL RANCH, Calif. – May 28, 2020 – iBase-t, a leading provider of manufacturing, quality and MRO solutions that enable digital continuity, today announced it has been named a Top Performer in the Quality Management Software category for the Spring 2020 Customer Success Report published by FeaturedCustomers. The award is the second from FeaturedCustomers this year, with iBase-t being named a Market Leader in MES Software in January.
FeaturedCustomers, a leading customer success content marketing platform for B2B business software & services, evaluated all the potential Quality Management Software companies on its platform for possible inclusion in the report. iBase-t was recognized as a Top Performer in the Quality Management Software category, one of only 23 companies that met the criteria to be included in the FeaturedCustomers Spring 2020 Customer Success Report.
The Customer Success Report is based on the curation of authenticated case studies, testimonials, and videos from across the web, telling a complete story of vendors in the Quality Management Software space through real customer experiences. Rankings are determined by multiple factors including the total number of referenceable customers via success story content, social media and market presence, vendor momentum based on web traffic and search trends, and additional data aggregated from online sources and media properties.
“The team at iBase-t is honored to be recognized again as a Top Performer. This confirms the success of our mission to exceed customer expectations by providing them with a quality solution that is an integrated component of how manufacturing operations are managed,” said Naveen Poonian, CEO at iBase-t. “We’d also like to thank FeaturedCustomers for giving us the opportunity to tell our story through the success of our customers.”
About iBase-t
iBase-t is a leading provider of manufacturing, quality and MRO solutions that enable digital continuity across the enterprise. With 30+ years of experience in highly engineered, regulated industries, iBase-t simplifies the complex by empowering customers to gain real-time visibility, take control, and drive velocity across their operations and extended value chain. iBase-t works closely with industry leaders, including Lockheed Martin, Northrop Grumman, Rolls Royce, Pratt & Whitney, and Patria Belgium Engine Center. Learn more at ibaset.com
This is a continued discussion on the topic of Agile Manufacturing Execution System (MES) and how it is different than an Agile deployment strategy. In this article I’ll talk about how it is now possible to do both. This combined strategy is a powerful model to overcome what has traditionally been very difficult to achieve – install a Manufacturing Execution System quickly. To some this might seem like a holy grail – something akin to an urban legend. I am here to challenge that thought – now you can truly have your cake and eat it too!
End of Life for Monolithic Applications & Development
One thing should now be clear. In an environment where speed, operational flexibility, and a fast response is the norm, it is hard to justify a Waterfall strategy. This applies to application development, implementation strategy, or application architecture. Similarly, the case to build or install a monolithic software application is becoming harder to justify as well.
A monolithic strategy results in complex, difficult to manage installation projects that can sometimes drag on for years, and applications that are difficult to maintain, complex to upgrade, and inevitably will become out-of-date.
An agile MES and deployment strategy introduces a radical innovation shift with how an MES can be installed and maintained. By using a microservice architecture, an MES can now be designed around a set of loosely coupled services. A single application might have up to 5,000 separate microservices, each one easy to maintain, test, and independently deploy – or not.
Over time, small or large changes can then be introduced easily without a need for major code reworks or upgrades. Each service can be adjusted on its own without a need for reintegration. A common set of APIs is maintained allowing new services to be added or removed as often as needed. Further, the ability to accelerate innovation by adopting open-source standards increases, given the fact that APIs are now all consistent.
One + One = Three
What should now be apparent is the powerful combination of implementing an agile MES with an agile deployment strategy. An agile product architecture is modular, easy to modify, and can accommodate future changes in a deployment strategy. And, with the ability to very easily add new features, the pressure is substantially reduced on trying to get all right at the start of the planning stage for deployment. Stakeholder requirements can adjust during the implementation and thereafter without impacting the overall timeframe to go live.
This combined capability can save hundreds of hours and substantial costs by not taking months fixing middleware or software code to keep everything working smoothly. It opens the door to frequent, reliable, and fast delivery of new MES services, updates, and improvements.
The iBase-t Manufacturing Execution System, part of the company’s digital operations suite, is unique in that it can be deployed as an agile MES application. Reflecting an aggregation of over 5,000 microservices, it can be implemented and maintained one service at a time. This is a game-changer – one that delivers benefits well after the original set of code has been prepared.
Agile in a Time of Change
We now live in a period of extreme change. Right now, the future is quite unpredictable. Why should we think our manufacturing systems should now remain static? Agile product development and deployment strategies have completely transformed how software applications are written and installed.
Agile MES applications are the next step and will change how manufacturers plan and execute operations processes. Those vendors clinging to traditional ways are likely to struggle in the years to come. Those introducing an agile approach to MES are likely to emerge as tomorrow’s leaders.
Interested to learn more? Then you should watch this webinar recording to learn more about the importance of retiring aging legacy MES applications today and the steps required to get this process started. Those stuck using a home-grown system should also take note to seriously consider the costs involved to maintain such a system compared to the new features, adaptability, and new advanced technologies that can be unlocked with a modern MES that is professionally maintained and operated.
It recently came to my attention that confusion exists over the term “Agile” and how it relates to a Manufacturing Execution System or MES. I thought it would be helpful to provide some background on how this term can apply to either the deployment methodology or how the application is designed. I’ll then continue this discussion in a follow-up article on why you really need both. First, let’s talk about agile MES and how that is different than an agile deployment.
At first blush, these two concepts might appear to be quite similar. They really are quite different. Some software vendors appear to be (deliberately?) blurring the lines to overcome their own application’s shortcomings. Most would argue that an Agile deployment methodology is an accepted best practice. An agile Manufacturing Execution System (MES), however, is a big deal – it could be one of the most important breakthroughs of the decade for this category of software applications.
Waterfall versus Agile Product Development
If you go back 20 years, nearly all software was written using a waterfall strategy – a concept first introduced in 1970 by Dr. Winston W. Royce. This traditional, monolithic approach consisted of a sequential, non-iterative methodology. Essentially, it’s a framework in which software development proceeds sequentially through a series of phases. A good analogy is that the development process flows downwards like a waterfall through various stages.
The main benefit of a waterfall framework is that the staged development cycle enforces discipline: every phase has a defined start and endpoint, and progress can be conclusively identified (with milestones) by both vendor and client. The emphasis on requirements and design before writing a single line of code ensures minimal wastage of time and effort and reduces the risk of schedule slippage, or customer expectations not being met. The most prominent criticism revolves around the fact that very often, customers don’t really know what they want up-front. What they want emerges out of repeated two-way interactions over the course of the project.
The Waterfall development model traces its roots to the manufacturing and construction industries – highly structured physical environments where design changes became prohibitively expensive as you moved through the development process. Hence, there is a built-in “lockdown code and design” mentality that is baked into the model.
Agile takes a completely different approach. With this model, it is recognized that the world operates much more dynamically. Instead, it is based on an iterative development approach. Requirements and solutions evolve with greater collaboration under a much looser structure.
With this model, the biggest benefit is that the resulting application will be more closely aligned with what end-users want – an often-changing target. Applications can be developed faster, with an offset of fewer features to start. New capabilities, however, can be quickly added once a confirmed need is identified. As a result, user feedback is more relevant knowing change can occur quickly. This helps projects move through each stage at a faster pace. Done right, an agile product development team can operate with greater efficiency and less waste, translating into lower cost.
The shortcomings of an Agile deployment model are primarily centered around scope creep. Given the iterative nature of an Agile model, it can be difficult to know when an Agile project is complete. Companies looking to take advantage of the Agile framework need to understand that a project with a fixed time and or cost does not mean it has a fixed scope. As a result, you may not get everything that you set out to do in the time you were expecting.
Agile MES Implementation
In the same way an application can be developed with either a waterfall or an agile approach, so too can these concepts be applied to the installation process of an application, once it has been written. The two concepts are virtually the same. An MES implementation project will typically start with gathering a comprehensive list of requirements and objectives, followed by identifying all impacted stakeholders and then assessing the impact of the changes that will occur once the new MES system has been installed.
Regardless of your deployment model, the initial program design, scope of work, and architecture elements will likely change. The farther along you are in the process that these changes are identified, the greater the length of a delay that will result. The common culprit: things change. Requirements are modified. New stakeholders get involved, and complexity continues to grow. Here is where the benefits of an Agile approach become quite pronounced and significant.
Monolithic versus Agile MES Applications
Similarly, Manufacturing Execution Systems can be viewed as having either a Monolithic or Agile software architecture.
Typical “big vendor” MES applications can be difficult to add new features or to expand capabilities. These new features must often have to wait until doing a new service pack or major product version upgrade. In some ways, this sounds a lot like a Waterfall development or implementation model, right?
An Agile MES application has an architecture that allows an implementation team (or those tasked with performing updates or future maintenance) to dynamically perform updates to capabilities quickly to the actual software itself – in addition to how it is deployed.
One example might be to modify a user interface and its connected functions within a live environment. This update could take place between user logins. Here, an agile architecture lets you manage, maintain, and upgrade an MES application to keep it current and relevant. The key benefit is considerably higher flexibility on what features are initially deployed, and what can be easily added over time.
In my next post, I’ll talk about how an Agile MES can exist, and the powerful combination that is possible when combining an Agile MES with an Agile deployment strategy.
For the past 15 years I have had the privilege to work with some of the biggest manufacturing companies in the world from Aerospace to Automotive, motorsport, marine, and defense. Nearly everyone has one thing in common – vast amounts of Technical Debt.
Often these companies are literally buried under a mountain of this liability. While this approach is often justified as a quick way to fix a problem, in the end, it can lead to paying a much higher cost and should be avoided whenever possible.
Today, as we work to overcome the challenges associated with COVID-19, organizations that have accumulated this burden will be most impacted when struggling to navigate with the “new” normal. Now is the time to address this issue by taking a longer-term perspective on how “quick fixes” are applied across manufacturing operations. There is a much higher cost to pay today.
Where Does Technical Debt Come From?
Technical Debt is created anytime heavy customization is done to an enterprise solution to make it work. These types of solutions take a long time to deploy, always go over budget, and usually result in some form of de-scoping to meet resource and time constraints.
In the end, the business does not get what it needs or what it was sold. Instead, what is left are unnecessary, complex integration issues, difficult and expensive future upgrades, and future training issues. Worse, as future upgrades are needed, technical debt can get in the way with routine process improvement, blocking you from easily performing a future upgrade or changing to a better solution when the need arises.
Definition of Technical Debt: Technical debt (a.k.a design debt or code debt) is a concept in software development that reflects the implied cost of additional rework caused by choosing an easy, limited, or ad hoc solution now instead of using a better approach that would take longer (source.)
Along Came the Coronavirus
In the world of manufacturing, just like so many other industries, the coronavirus has put new stress on systems, people, and processes. COVID-19 has shown a light on how many companies are unable to adapt or change quickly in order to promote social distancing or offer remote working. Even what intuitively appears to be a simple procedure to reconfigure a line to produce a new product such as a ventilator has only been achieved by a handful of firms.
Those that rely on a Manufacturing Execution System (MES) to manage and optimize their manufacturing procedures expect that investment to yield better operational agility. That was part of what was “sold” at the time of purchase. Sadly, what often results instead is an annuity of Technical Debt payments. And the compounding of interest on this debt continues to grow, often exponentially.
The deeper that a company falls into a Technical Debt “hole,” the harder it is to climb out. This is especially true for those that rely on large, enterprise solutions from the “big vendors.” It becomes almost impossible for manufacturers to make a change, ultimately providing a long term impact on that company’s customers, employees, and shareholders.
Companies stuck in this condition can be referred to as “Digitally Distraught,” as opposed to “Digitally Determined.” Digitally Distraught companies are followers. They upgrade their systems because their enterprise solution provider tells them that now is the time to upgrade. In the end, these companies will struggle with the upgrade. Because of all the considerable customization, the Digitally Distraught spend an increasingly higher percentage of their budget maintaining systems instead of investing in the future.
Digitally Determined companies, however, become leaders. They use digital solutions to improve their business, have access to a greater budget to stay current (lower allocation to maintenance), and, most importantly, they select enterprise solutions that require less customization. Over time, consistent utilization of Out-of-The-Box (OOTB) or pre-configured solutions have been documented to have a much lower Total Cost of Ownership (TCO). And far less overhead and associated Technical Debt burden.
The way to break free of this cycle is to start now. As you evaluate the next enterprise operations system, you have to make a choice. Will you own your enterprise solution, or will it own you?
Patria / Belgium Engine Center to Present Webinar on Journey to Digital MRO Operations
WHAT: This iBase-t sponsored webcast will share how Patria / Belgium Engine Center (PBEC) has embraced a digital transformation strategy of their Maintenance, Repair and Overhaul (MRO) operations. The goal was to remove manual, paper-based processes. The challenge was to do so while both implementing a new ERP and navigating through business acquisitions. Attendees will gain insight into how an iBase-t MRO solution can improve operational agility, reduce errors, and accelerate Turn-Around-Time (TAT).
WHO: Sophie Nissenbaum, Improvement Project Manager at PBEC, will present “Patria / Belgium Engine Center’s Journey to Digital MRO Operations.” She brings 18 years of operations and quality management experience to her presentation. Prior to her involvement in this project, she held roles as a Production Management Analyst, Master Scheduler, and Project Lead for Production.
WHEN: Live broadcast will occur on Wednesday, May 27 from 10:00 a.m. – 10:30 a.m. EDT / 16:00 – 16:30 CET.
About iBase-t
iBase-t is a leading provider of manufacturing, quality and MRO solutions that enable digital continuity across the enterprise. With 30+ years of experience in highly engineered, regulated industries, iBase-t simplifies the complex by empowering customers to gain real-time visibility, take control, and drive velocity across their operations and extended value chain. iBase-t works closely with industry leaders, including Lockheed Martin, Northrop Grumman, Rolls Royce, Pratt & Whitney, and Patria Belgium Engine Center. Learn more at ibaset.com
A new Global Aerospace Maintenance, Repair & Overhaul (MRO) study by HTF Market Intelligence was just published that is forecasting “huge” growth by 2025 of the MRO market. This conclusion did not surprise me. I have seen previous economic downturns. While there are certainly unique aspects of how the coronavirus has changed our world, common wisdom can be extracted from what history has shown us. I too expect the MRO market will emerge first. It would be a good idea to plan accordingly.
Hamburgers and Steaks
In lean times appetites change. Hamburgers start to look like a better choice than a steak (at least for those not vegetarians). Companies behave the same way. Most will be hesitant to lay out large sums of capital investment on new equipment today, given the uncertainty now present in the market. For the Aerospace and Defense industry, add the fact that many of the aircraft have literally been parked, given the dramatic drop in airline travel. With such a shift, leadership teams are now strategizing how to best weather this storm. Greater focus will be placed on maintaining existing assets for longer time periods, as opposed to replacing them with newer aircraft.
This type of thinking will manifest itself both internally within the organization, and externally on how new purchases and alliances are determined. Internally, hardware, systems, and processes are likely to need attention. This is even more the case if they have been sitting idle for many weeks with maintenance actions reduced, dependent on the particular maintenance plan. When operations resume, there will an increase in maintenance activity depending on the length of time the aircraft has been in storage.
In tough times, management will be hesitant to invest in a new aircraft (e.g. steaks) but would consider upgrading existing systems and putting more time into extending the life of their aging fleet and components.
Operator Activity
On the external front, operators may not be quite ready to open their checkbooks for new orders. But they would be more willing to invest in aftermarket services and maintenance of their existing assets. The last thing that is needed is unscheduled maintenance or the loss of a vital asset due to a sudden breakdown. This challenge is especially acute when operating with inventory levels that are running at 10 percent capacity.
MRO Boost
The MRO market, therefore, is set to see better days – and soon. Companies across the aerospace supply chain will engage in maintenance, repairs, and urgent overhauls to better utilize what is already in place. Many are likely to conduct a thorough review of maintenance programs. Therefore, a review of internal maintenance practices is likely to be high on the agenda. Especially in the execution of MRO activities, with an emphasis on decreasing hangar and shop Turn-Around -Time (TAT) to get a longer life out of existing assets.
The Risk vs. Reward of Critical System Failure
Here is where critical decisions will be made by those engaged in the maintenance of long-term assets, such as aircraft, components, engines, and other notable assets. There will be a need to maintain repairs and overhauls. Even when things are operating smoothly, there is still a risk of a critical system failure. Your strategy must remain the same. Investing in systems that can accelerate or minimize downtime will pay big rewards by contributing to a productive TAT, getting aircraft back in service as quickly as possible. A low-risk decision for MRO operations and execution is to extend the lifespan of existing aircraft, engines, components, and machinery with appropriate investment.
Now is a great time to invest more heavily in items such as MRO execution systems, digital migration, paper removal, advanced analytics, or Industrial Internet of Things programs. Each of these investments will reduce future expenditures, increase productivity, and extend the asset’s life.
Internal resources might not be operating at full capacity, so “special” or exploratory projects could be started, such as investigating the full benefits of launching a new or upgraded digitalization initiative. The full strategic value of transitioning to becoming a digital enterprise might be easier to see today, which would help in responding faster to change, easing future process improvement, and unifying the entire supply chain on one integrated digital thread.
How well did you adapt to this recent change of events? If there was room for improvement, then you might be interested to attend an upcoming webinar, presented by Patria / BEC, that details their ongoing journey to upgrade both their MRO and ERP systems simultaneously – and the success that has already been achieved.
Today might be an excellent time to take a close review and assessment of your MRO. Given the high likelihood that part of the business will recover first, taking full advantage of this expected outcome could be quite beneficial to your bottom line as our economy begins its journey back to full performance.
Manufacturing Intelligence application provides real-time analytics enables faster decision making and operational responsiveness
FOOTHILL RANCH, Calif. – May 18, 2020– iBase-t, a leading provider of manufacturing, quality and MRO solutions that enable digital continuity, today announced the general availability of an improved Manufacturing Intelligence application. iBase-t customers upgrading to this enhanced product can increase process efficiency, drive intelligent decision support, and achieve higher quality standards.
In today’s digital environments where data is collected at an accelerating pace, manufacturers are challenged with how to best analyze and act upon this wealth of knowledge. As part of iBase-t’s continued focus on simplifying the complex, the company’s Manufacturing Intelligence application now provides a faster comparison of real-time and historical activity to unlock future performance gains.
As a value-added application in iBase-t’s Digital Operations Suite, Manufacturing Intelligence provides out-of-the-box analytical capabilities with comprehensive reporting, a data warehouse, Extract, Transfer and Load (ETL) scripts, and pre-configured dashboards for manufacturers using iBase-t’s Solumina. Manufacturing Intelligence now provides greater contextual visibility into operations processes to help drive decisions and streamline production, quality, and MRO workflows, improving overall efficiency and quality performance.
“We continue to invest in adding functionality across our product suite. Manufacturing Intelligence now provides more value to our customers with real-time, contextual measurement capabilities and more useful dashboards, ideal for frontline workers, supervisors, and managers,” said John Fishell, Vice President, Product Development at iBase-t. “Manufacturing Intelligence is an ideal complement for customers leveraging the iBase-t Digital Operations Suite and can be provided at a fraction of the cost of an internally built solution.”
Learn more about iBase-t’s Manufacturing Intelligence.
About iBase-t
iBase-t is a leading provider of manufacturing, quality and MRO solutions that enable digital continuity across the enterprise. With 30+ years of experience in highly engineered, regulated industries, iBase-t simplifies the complex by empowering customers to gain real-time visibility, take control, and drive velocity across their operations and extended value chain. iBase-t works closely with industry leaders, including Lockheed Martin, Northrop Grumman, Rolls Royce, Pratt & Whitney, and Patria Belgium Engine Center. Learn more at ibaset.com
On Wednesday, April 29th, 2020, iBase-t hosted a webcast that presented a compelling case to evaluate if you are still running a legacy Manufacturing Execution System (MES). Now might be an ideal time to start the replacement process. Given the recent changes that COVID-19 has had on global demand, operations, and business models, the importance of having clear visibility and strong control over how operations are managed or changed is now a hot issue.
Legacy, monolithic MES applications are dinosaurs. Take a moment today to position your MES for the next decade, to avoid having to do this again. New agile MES strategies now exist whereby new features, upgrades, and improved performance power can be added as needed, when needed, without a full rip-and-replace. And, even more importantly, a modern MES is capable of being managed and supported remotely (by reduced staff) while being capable of rolling out new capabilities and deploying advanced technologies (AI, mobile, cloud, advanced analytics, IIoT).
During and after the original presentation of this webcast, several questions were raised by those in attendance. We thought it would be helpful and worthwhile to share that feedback as additional information that can be used as part of your assessment to embark on this type of project today.
Question #1: This is a topic we face with not only our MES but also other enterprise solutions (PLM, ERP, CRM, QMS, etc.) – what do you think is specific to MES in the approach described in this presentation to identify/replace the MES dinosaur?
With a Manufacturing Execution System, the user base is quite specific. An MES will likely be the only enterprise system used by most individuals on the shop floor. In addition, companies do not have the luxury for multi-year rollouts on the shop floor where they may have that opportunity more so in the PLM and ERP selections. Of course, many of these principles are applicable to other enterprise choices, however, only the MES system has the same level of impact on the most users, has the most risk, and has the largest need to be innovative. The effectiveness of an MES has a very direct impact on product and company innovation will hit on the shop floor. While sometimes manufacturing companies consider themselves to be more of an engineering firm, they still make their profit by manufacturing and selling their products for the price that will give them the highest profit margins. Investing in modernizing an MES will have a far greater impact on future profitability than any other enterprise system.
Question #2: How do you take into consideration data feeds and integration points with other enterprise platforms which feed MES during this type of migration?
When starting an evaluation to replace a legacy MES, everything starts with mapping and understanding not only the data that needs to be shared by each system, but also how each system uses the information. A great example of this is a Bill of Material (BOM). Your Product Lifecycle Management (PLM) solution needs a BOM to support product configuration (engineering BOM), while your Enterprise Resource Planning (ERP) system needs a BOM for financial and scheduling reasons (planning BOM). Your MES needs the BOM to understand what parts will be validated during a build (operations BOM). All systems leverage the same type of information, but they digest and use it differently. That said, data feeds and integration points must be flexible and interchangeable – a key performance improvement enabler of implementing a modern MES system, readily enabled with an open structure using a standard Application Programming Interface (API) that facilitates the transference of this information to and from each enterprise system. Open architecture and an open standards architecture with platform-agnostic capabilities lead to the ability to quickly integrate, update, and maintain on a go-forward basis.
Question #3: Are more MES deployments going to the cloud?
The use of cloud technologies in manufacturing operations is a trend that has been in play for the past decade. While it is unlikely all operations will ever go to the public cloud, private and hybrid cloud offerings have become increasingly popular over the past few years. Gartner’s research confirms, as referenced in a recent report, that there is movement, albeit at a glacial pace. The emergence of COVID-19, however, will likely have an impact on future plans. The value of supporting remote work, implementations, and performance modifications will likely speed up any cloud migration strategies. The benefits are obvious. Regardless of where you are in your cloud migration journey, picking an MES that has the ability to run in any environment has quickly become a “must-have” technical requirement, part of what can be accomplished with modern, agile applications.
Regulatory compliance programs such as Sarbanes Oxley (SOX) and others have been with us for nearly 20 years. When these were first implemented, Chief Financial Officers began to quickly invest in Enterprise Resource Planning (ERP) systems to automate data collection and provide a more robust audit trail. Despite all this investment, the process has not yet been completely automated. Today, the coronavirus has disrupted nearly every facet of our world. Will this be the final straw that ushers in a world of digital regulatory compliance as the industry standard?
Those who work in regulated industries understand the potential shortcomings and challenges of enforcing compliance and reporting requirements when operating in a paper-based environment. While most organizations now have some sort of ERP in place, there are still plenty of issues in effectively maintaining compliance. To start, how well do you effectively orchestrate multiple instances of ERP? Those that have been through a merger and acquisition know exactly what I am talking about.
More importantly, how accurate are your production records, including As-Planned and As-Built specifications? How do you know if every manual or paper-based process has been executed right? If an out-of-compliance event occurs, how quickly could your team respond, even if they were working remotely?
Spreadsheets and desktop applications used to track compliance reporting are growing “long in the tooth.” Now COVID-19 is challenging everyone to think differently and consider new ways to work (e.g. remote working), Those without a plan to remove manual or paper-based processes from their regulatory compliance process face an increased risk of a future non-compliance event.
How it all Started: Two Huge Corporate Scandals
If you look back to how SOX came about two decades ago, it was a direct result of two financial scandals: Enron and WorldCom. Deliberate, fraudulent actions were done to mislead investors. It took a widespread public outcry for the industry to take notice. New legislation was then written that required public companies to strengthen audit committees, test internal controls, and improve disclosures.
There are many similarities to what the world faced 20 years ago with these corporate scandals and what we all face today with COVID-19. In both instances, a sudden “shock” to the status quo occurred, it was quick and widespread, once recognized and acknowledged, and the resulting future will forever be changed.
In the United States, the new legislation that passed was the Sarbanes–Oxley Act of 2002, where top management must individually certify the accuracy of financial information or face prison terms. Other acts were implemented around the world, including (source):
C-SOX – the Canadian equivalent of Sarbanes–Oxley Act
German Corporate Governance Code – 2002 German corporate governance code
Loi sur la Sécurité Financière – 2003 French equivalent of Sarbanes–Oxley Act
Clause 49 – 2005 Indian corporate governance clause
Disposizioni per la tutela del risparmio e la disciplina dei mercati finanziari – Italian Law 262/2005
Déjà vu, All Over Again …
Today, the world is facing a massive public health crisis whereby new drugs, vaccines, and medical devices are required in large quantities. Prices are spiking driving new providers to enter the market. With big pressure to get product out, people are taking shortcuts while executives look the other way. Processes might not all get followed as they should. It would appear we have a big potential for an out-of-compliance event to occur. The only question is who will be the poster child we will all learn to hate?
What happens next? A government inquiry would be a good guess, followed by a revamp of how processes are recorded and an industry-wide review of who else has been cutting corners.
If I was a betting guy, my guess is that the risk of the above scenario happening is pretty good. Of course, I certainly hope it never does happen. But, if you are a CEO for a company that is involved in trying to provide or support the recovery effort around today’s global pandemic, what level of risk are you willing to take?
Next Steps
Fortunately, many new enterprise software tools have emerged to better manage regulatory compliance reporting. They can enable greater auditor scrutiny of financial records, faster administration of compliance, and better validation that reports are accurate. At the same time, personnel is freed up from repetitive verification and data gathering tasks. As a result, some companies have experienced a drop in the time spent on these compliance activities of around 20 percent.
The move from spreadsheets to compliance applications is part of a greater movement – the emergence of the digital enterprise. All systems and processes (including those related to regulatory compliance) are now being joined to ensure digital continuity spans the entire enterprise, including all parts of operations, the supply chain, financial controls, and then out to end-users and customers.
This change allows management to transition from monthly or quarterly reporting to operating in near real-time. Artificial Intelligence (AI), machine learning, and analytics can provide the digital enterprise with a whole new level of adaptive capabilities in terms of being able to spot trends, out-of-compliance events, or other business issues much faster than before. And, this technology can then provide options or choices of what the right next step might be to keep you one step ahead of the competition.
Given that an organization is only as strong as its weakest link, the same is true of the digital enterprise. As you venture down your digital transformation program, don’t neglect the importance of incorporating regulatory compliance as part of your digital journey.
