Creating a Strategic IT-OT (Informational Technology - Operational Technology) investment plan is essential for all manufacturing organizations. With all the opportunities to fund projects, which ones are the most important can only be understood, if considered as part of an overall corporate investment strategy. Too often, IT and OT investments are considered separately. While IT investments may have higher visibility across the enterprise, OT investments can also have a significant impact on the business.
IT-OT investment plan challenges
As Mike Williams, ARC Associate indicated in his opening remarks for a session on this topic at the recent ARC Industry Forum in Orlando, owner-operators often find themselves in the challenging position relative to IT and OT created by mergers, acquisitions, and divestitures. These business events create several technical and organizational challenges around IT and OT assets. Mike asked the audience if any of the following issues sound familiar:
- Incompatible IT infrastructures
- Custom applications or configurations not well integrated
- End-of-life issues stress an already challenging budget
- Dwindling skill resources to support and sustain the installed base
Of course, many in the audience could relate to one or more of those issues within their own organizations. So, what to do about it? Mr. Williams’ experience through his prior career with Dow Chemical and assisting many other enterprises show that a strategic, imperative-driven IT-OT investment plan generally is structured for a three to five year period. Formalizing a strategic plan ensures that executive leadership is fully aligned with the investment needed. The strength of the strategic plan is through agreements between the business leadership and the IT-OT organizations.
Through dozens of successful plan and execution, Mike found that “gap analysis” is a key component of the plan, since that will reveal the current state versus the future IT-OT vision. Once the gap analysis reveals the funding requirements and the financial incentives, the plan typically includes:
- What IT/OT functional capabilities will be delivered against which business objectives.
- Identifies the timing of delivery and any dependencies
- Clearly articulates the value proposition of each deliverable
- Defines any organizational change required
Corporate IT executives need to understand OT issues too!
Strategic IT-OT investment plans have the best chance of success, if corporate executives are involved in the early stages of the plan development. IT executives need to know what is happening at the OT level, and OT management need to understand how the business IT structure works and interacts with the OT. Often a simple step of having IT management visit an operating plant to see how OT impacts the ability to keep the plant operating and producing product can have a significant impact on the resulting strategic plan.
Where operating assets are the result of mergers and acquisitions, it is important to make sure you understand how the acquired facility works before implementing change. As part of the analysis, understanding the timing of change, as well as the change itself is important to ensure that the it doesn’t disrupt the plant operation.
ARC consultants can help to facilitate the creation of a Strategic IT-OT Investment Plan. The assistance you need may be as simple as helping you organize your first strategic meetings, or as seemingly complex as assessing your production assets to determine the opportunity value that could be created with the correct changes – both in terms of the “what” to change as well as “when” to change.
About ARC Advisory Group (www.arcweb.com): Founded in 1986, ARC Advisory Group is a Boston based leading technology research and advisory firm for industry and infrastructure.
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About the Author:
VP and GM Manufacturing Advisory Services
Dick's focus areas include Manufacturing Industries Strategies and Best Practices; Supplier Selection Process, Supplier Performance Management, and Operational Excellence Solutions, Oil & Gas, Refining, Chemicals, and other Process Industries; Advanced Software and Systems Technologies such as APC, Optimization, PIMs, and DCS. Dick is responsible for covering advanced software business on a worldwide basis. In addition, he provides leadership for support of ARC's Manufacturing Advisory Service team and clients.