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.
Read this article, The Importance of Technology Investment in Down Markets, to understand the importance of technology investments today.
How Do You Break Free?
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?
Evan Sloss is the Director of EMEA for iBASEt in the United Kingdom. His expertise lies in driving new business opportunities in the Manufacturing Execution System (MES) and Maintenance, Repair, and Overhaul (MRO) markets. He began his career in Product Development within the heavy equipment sector.