Understand How Technology Can Grow & Protect Your Company Then Take Incremental Steps to Meet Prioritized Objectives.
New technology can benefit companies in all industries. Reading about the possibilities is exciting. Business leaders are eager to get on the bandwagon. Leaders can become impatient when they learn the competition has implemented something like cognitive technologies to solve a problem and gain a significant advantage.
Ultimately, companies recognize that digitizing operations and developing a digital strategy is necessary. The fear is that the longer they wait, the more at risk they put the future of their company. Jumping all in for transformation becomes an irresistible temptation. Too many business leaders want to make fast decisions for fear of missing out. They start the process before they’re ready. Transforming processes before you are ready leads to frustrations and unrealized benefits.
Use Managed Services as an Intermediary Step
Part of the challenge for many companies has legacy systems, and they’re not in a position to retire them overnight. Leaders will realize when the next natural progression is to switch to modern applications. Partnering with a forward-leaning technology company like IronOrbit can enable baby steps towards modernizing your operations. This approach affords the time to determine which tools are critical for sustainable growth and which are not.
You build incremental confidence in the technology, while IronOrbit can make recommendations based on your immediate, mid-range, and long-term strategy. And it’s okay if there is no long-term strategy other than fortifying and growing your business. IronOrbit, as your managed service provider, can help supply the missing pieces of the puzzle. You will begin to approach digital more like the business decision it is. An incremental approach enables digitization and adoption of new technologies when it makes sense. Digital and business strategies must align and integrate throughout the organization.
Corporations have silos of group activity. They’ve been that way for over a century. Anything to do with IT would be the purview of a secluded department or an enclave of tech-focused professionals. When you talk about digital transformation or adopting new technologies, you’re talking about a change of one kind or another. Certain company cultures can adapt more quickly than others. Still, change can be complicated. As your Smart Managed Service Provider, IronOrbit helps to simplify the process and make it substantially more manageable.
Begin with the End in Mind
A digital transformation can mean different things to different people. It might mean software to increase operational efficiencies for one, or develop an omnichannel retail strategy for new product offerings for another. Start by clarifying why undertake the transformation and what business opportunities will arise from the changes. The more you know about what challenges you want technology to solve, the easier it will be to build the proper foundation.
Adopting new technologies should be seen as a marathon and not a sprint. Take the time to understand which technologies perform what kinds of tasks. Identify a prioritized portfolio of projects based on business needs. The close collaboration of in-house technology leaders and C-level executives will become increasingly crucial as acceleration (technology and change) continues. CIOs and CTOs have the expertise to help navigate a straightforward integration of digital and business strategies.
IronOrbit ensures you’ll have a map to successfully evaluate and integrate new technology while balancing the upgrade and management of existing systems.
Learn more about how to adopt new technologies for your company here.
Cyberthreats to your business are at an all-time high. They are, as President Biden states, “the defining threats of our time.” Is your company prepared to withstand such attacks? According to a recent Gartner article, business leaders need to do more to strengthen their cybersecurity.
“There are only two types of companies: Those that have been hacked and those that will be hacked.”
Robert S. Mueller, former Director of the FBI – 2012
“There are only two types of companies: Those that have been hacked and those who don’t know they have been hacked.”
accredited to John Chambers, CEO Cisco – 2019
Days before Russian tanks began rolling into Ukraine; a significant connectivity outage hit Viasat Inc. (VSAT). The Carlsbad, Calif.-based company is a leading provider of high-speed satellite broadband and secure networking for military and commercial customers worldwide. Viasat modems control thousands of wind European wind turbines. Suddenly, they went offline. The outage hobbled the Ukrainian military as generals began preparing for the Russian invasion. Reuters later reported the blackout to be sabotage.
Although most well-organized ransomware gangs are in Eastern European countries, state-sponsored hacking groups are from China and North Korea. They use sophisticated tools to embed malware deep inside the most extensive networks. In many cases, malicious code can go undetected for months, infecting millions of computers.
On January 15, 2022, members of one of the main ransomware gangs, Our Evil Group, were arrested in Russia. The Putin regime has recruited them to become a state-controlled group of hackers. About a month later, we began to see a resurgence of attacks. And that’s only the attacks we read about in the headlines. For every ransomware attack you hear about, there are three others that go unreported.
The Software Supply Chain Attack
SolarWinds is a company that supplies its software to over 14,000 companies. Russian military intelligence inserted a form of malware that served as a sophisticated backdoor to these companies. It’s a certainty that some of these backdoors have been successfully embedded without US companies knowing about it. Corporations probably can’t determine conclusively whether-or-not a backdoor has been installed.
In the case of the SolarWindsCorporation, one of their customers, a cybersecurity company called Fire Eye, discovered the malware by chance. They had received the software and, months later, somebody noticed a questionable anomaly. SolarWinds is not a unique situation. There are sure to be other corporations that have been infiltrated.
Escalation of Ransomware Attacks
Recently, the President sent warnings to the citizens and businesses across the country and urged everyone to take steps immediately. Key targets include private companies and any organizations that could apply pressure to the national economy and the government, including critical infrastructures.
When it comes to ransomware attacks, no sectors are off-limits. Hackers are going to go after everything that they can. Last year, we saw how no company, large or small, was immune to attack. For example, there were ransomware attacks on the following:
Small Family-Run Fishing Business
Ferry company on Martha’s Vineyard
Casino Hacked through a Fish-Tank Thermometer
Large meatpacking company
The Colonial Pipeline
The Colonial pipeline was devastated in May 2021 by cyber terrorists. Attackers distributed malware through email then demanded a ransom to restore services. The 5,500-mile pipeline transports 100 million barrels of gasoline and other fuel products per day to the eastern United States. According to a report from Reuters, gasoline futures spiked 3% and have remained above trend since that time.
Two months later, Jennifer Granholm, the Energy Secretary, saidthat bad actors gained the ability to shut down the U.S. power grid. Hackers embedding themselves in the nation’s electrical grid displayed tremendous sophistication that analysts hadn’t seen before. Whoever was behind the cyber-attacks on our country’s infrastructure was succeeding at an alarming rate. Who did the government call in to investigate? CrowdStrike. Why? Because CrowdStrike has been investigating high-profile cyberattacks since 2011. Investigators at CrowdStrike have even unspooled more recent attacks where the code dates back to 2010. So, CrowdStrike has been on the frontlines of cybersecurity since their beginnings.
What Can Be Done?
There are basic preventative steps that everyone must apply regularly. For example, don’t respond to SMS text messages from unknown origins. Don’t open links from emails of anonymous sources. Make that a personal policy and individuals will effectively eliminate most threats. Companies, on the other hand, are different. They need comprehensive and robust security protocols that are more sophisticated than the attacks.
Companies must realize that antiquated technologies like antivirus and firewalls are weak defenses against modern, sophisticated cyberattacks. Businesses must modernize their cybersecurity by using the new technologies mentioned by President Biden in his message to the nation. Businesses must use security measures like EDR and XDR to protect against modern ransomware groups.
EDR stands for Endpoint Detection and Response. It’s an integrated endpoint security measure that combines real-time continuous monitoring and collection of endpoint data with rules-based automated response and analysis capabilities. In the case of CrowdStrike’s EDR, the security technology combines a high degree of automation with machine learning to enable security teams to identify and respond to threats immediately. The next-generation endpoint protection leverages CrowdStrike’s state-of-the-art file and behavioral-based proprietary machine learning and Indicator-of-attack methodology. This is particularly effective at stopping new, polymorphic or obfuscated malware, which is often missed by legacy antivirus solutions.
An essential ingredient of “next-generation” is reducing overhead, friction, and cost in protecting your environment.
You don’t need a large staff to maintain the CrowdStrike environment. Everything is cloud-based, so there’s no equipment to maintain, manage or update. The Falcon sensor is unobtrusive, and updates are seamless, requiring no re-boots. The web-based management console provides an intuitive and informative view of your company’s complete environment.
XDR is Extended Detection and Response and is the evolution of having EDR as a pre-requisite technology. CrowdStrike’s Falcon XDR uses artificial intelligence to improve threat visibility by making sense of structured and unstructured data at lightning speeds. Falcon XDR rapidly and efficiently hunts and eliminates threats across multiple security domains. What separates Falcon XDR from all others is its ability to isolate and identify relevant telemetry from systems and applications across an organization’s entire IT security ecosystem. Falcon XDR delivers proactive, automated responses to threats across the security stack.
CrowdStrike’s Falcon Complete protects an organization against someone clicking on a link they shouldn’t have. The technology sees the behavior, and as executable files begin unzipping, Falcon Complete begins monitoring for questionable activity. As soon as malicious activity, Falcon Complete isolates it.
CrowdStrike has been leading the charge against cyberthreats since 2011 when it was founded. The security firm uses cloud-based software that collects threat data across all connected devices. Artificial intelligence analyzes the information and seamlessly updates all endpoints.
The fast-growing Austin, Texas-based company provides cybersecurity to 15 of the 20 largest banks and 77 Fortune 100 companies. Private sector clients are apprehensive about the escalation of cyberthreats against Americans amid Putin’s invasion of Ukraine. Severe ransomware attacks are likely to increase as sanctions on Russia become more effective.
CrowdStrike has a long history of working with the federal government state, and national oil and energy firms to investigate cyberattacks and shore up defenses. Much of their innovations in security came from listening and working with clients to help solve the most challenging cybersecurity problems. Years of forensic analysis, fine-tuning, and adjusting to meet threats as they emerge have made CrowdStrike the pioneer of cloud-delivered endpoint protection.
CrowdStrike Falcon has revolutionized endpoint security by being the first and only solution to unify next-generation antivirus, endpoint detection and response (EDR), and a 24/7 threat hunting service. Millions of sensors across 176 countries collect and analyze more than 30 billion endpoint events per day. All of them use some form of machine learning and automation. These powerful capabilities are possible through a unique combination of prevention technologies. They include indicators of Attack (IOA), exploit blocking, real-time visibility, and around-the-clock managed hunting to discover and track the stealthiest attackers before they do damage.
The country cannot defend against cyberattacks alone, nor can your organization. Companies need the vigilance of every employee and every contractor. Business leaders must “accelerate efforts to lock their digital doors.” Using CrowdStrike is an effective way to secure all entries to your company’s infrastructure.
IronOrbit knows the importance of having resilient cybersecurity. That is why we protect our virtual desktops, INFINITY Workspaces, with CrowdStrike’s highest level of AI-enabled security technology augmented by live monitoring by a team of CrowdStrike’s team of security experts. Imagine having multiple full-time expert incident responders conducting day-to-day monitoring of alerts.
CrowdStrike® Falcon® Complete™ is a 100 percent hands-off and worry-free managed detection and response (MDR) solution uniquely provides the people, process, and technology required to handle all aspects of endpoint, cloud workload, and identity security, from onboarding and configuration to maintenance.
Digital Manufacturing Can Be a Game Changer for the Industry
Manufacturing is the lifeblood of American industry and was once the envy of the world. No other industry can mobilize the nation like manufacturing. America’s response to World War II was the most extraordinary mobilization of an idle economy in the history of civilization. During the war, 17 million civilian jobs were created, there was a nationwide productivity increase of nearly one hundred percent. Corporate earnings more than doubled.
Today, the manufacturing industry is a pale remnant of what it was before inflation and companies moving manufacturing offshore to places like China. But American manufacturing is at a crossroads. US Manufacturing could continue its downward spiral or turn things around in a big way. For American manufacturing to reclaim its international glory of years past, it must embrace the willingness to learn, innovate, and adopt new technologies. Collectively, these technologies are a part of digital manufacturing.
Defining Digital Manufacturing
Digital manufacturing is the application of cloud computing systems to manufacturing services, supply chains, products, data collection, warehousing, and processes. Digital manufacturing technologies link systems and processes across the production environment to create an integrated approach to manufacturing. This strategy encompasses everything from design and development to production and servicing the final products. Traditional factories were analog environments where everything was built by hand, have become Smart Factories.
Think of how the basic 1970’s cellphones evolved into the 90’s smartphones—taking a phone that only made phone calls to a mobile computer that can browse the Internet and run software applications. Then in 2007, the hyper-connected iPhone burst onto the scene. From the beginning, the iPhone was like a Swiss Army knife. It included everything you could want to do with a computer-driven gadget. The iPhone is now a professional quality camera and many other things.
Similarly, a Smart Factory is hyper-connected, predictive, and does many things old analog factories can’t do. These next-generation facilities are the core of digital manufacturing. A fully functioning next-generation manufacturing facility is built on cloud computing to optimize operations, store, and process tremendous amounts of data. The rest of the intelligent factory digital platform utilizes AI, big data analytics, automation, and an array of sensors.
In 2017, an article in The Economist stated that “The world’s most valuable resource is no longer oil, but data.” Today, data’s expanding amount and role are the driving force in Klaus Schwab of the World Economic Forum first identified as “the Fourth Industrial Revolution” or Industry 4.0. Manufacturers can break down siloed workflows and blend employees’ digital and physical worlds by utilizing technologies ranging from IoT (Internet of Things) to M2M (Machine to Machine) communications. Digital technology can dramatically improve productivity in planning and streamline production processes. It could also help solve another growing problem.
According to a study by Deloitte last year, as many as 2.1 million manufacturing jobs will be vacant through 2030. The report warns that the worker shortage will hurt revenue and production. Positions left unfulfilled could ultimately cost the US economy one trillion dollars by the end of the decade. Skilled labor hasn’t been the only hurdle. Supply chain disruptions and difficulties sourcing raw materials hobble the industry. Digital manufacturing can help fill industry jobs by attracting talent who want to use new technology. These people want real-world experience on digital tech designed to increase efficiencies because they know how valuable that experience will be long-term.
On August 12, 2021, Forbes article, Willem Sundblad writes that even if manufacturers can find what they need, prices are so high that they threaten margins. High inflation is sure to exacerbate the supply chain problem.
The battle cry from leaders in manufacturing is to seek out
suppliers geographically closer to production centers
more resilient supply chains
technology that can help modernize processes
skilled talent to operate effectively in a next-generation factory setting
Sundblad reminds us that the US is good at innovating but not so good at scaling those innovations compared to other countries. While the manufacturing industry might averse to risk, the American spirit is all about taking a calculated risk, especially when our backs are up against the wall. The window of opportunity is open, but it won’t remain open indefinitely. Remember, things move fast, and the stakes couldn’t be higher for manufacturing to get innovation right. Writing about transforming businesses through technology and innovation, Ethan Karp is the President and CEO of a non-profit manufacturing consulting group called Magnet. In his Forbes article, 4 Reasons 2022 Can Be A Game Changer for American Manufacturing, Karp recognizes the opportunity for American manufacturing.
If American manufacturers can invest in talent, technology, and innovation, they’ll be in a good position to take advantage of available opportunities. Karp identifies five of them. They are:
Take Back the Supply Chain
Use a combination of technology and innovation. Think about the incredible pivots thousands of manufacturers made during the pandemic to meet the demand for Personal Protective Equipment (PPE).
Take Calculated Risk
Karp urges manufacturers to override being conservative and take calculated risks. He suggests ways to mitigate the risk of innovation by asking four questions:
Are you solving a real problem?
2. Does your product solve the problem?
3. Can you deliver this solution?
4. Can you sell it?
Invest in the Smart Factory of the Future
Take whatever capital is available and invest in the technologies used in a Smart Factory. These technologies are the most direct way for manufacturers to excel in a competitive and dynamic marketplace. Over time, Smart Factories lower costs by speeding up processes, reducing downtime, and minimizing waste. These digital innovations will improve supply chain efficiencies.
Automate to Offset Talent Shortages
Karp emphasizes the importance of automation by sharing the story of Gojo, the company that invented the hand sanitizer Purell. The family ran operation successfully tripled its production almost overnight to meet pandemic demand. The company was ready because of its investments in Industry 4.0 technology over the years. Gojo has automation to do repetitive tasks and frees employees to do more value-added technology work, like programming and running the machines. The company hired 500 new people in 2020.
Capture the Infrastructure Boost
Manufacturers like steel and transportation suppliers will be kept busy with the government-sponsored trillion-dollar investments in transportation and public safety. Karp offers two recommendations:
Evaluate margins to provide a buffer against the unknown
Have the technology and talent already in place to manage production surges.
As accurate as the threat of digital disruption is, future success is more about making informed decisions with a view of the long-term consequences. Leadership is about establishing a direction and vision for the future, aligning people around that vision, and motivating and inspiring them to take action. Making better choices is a necessary ingredient.
In the February 2022 Harvard Business Review article, How Incumbents Survive and Thrive, Julian Birkinshaw looks at how Fortune 500 companies remain stable despite disrupters. “When companies face a disrupter, their natural response is to fight fire with fire: to set up a competing digital unit, build an incubator or accelerator, or pursue a transformation.” He cites a McKinsey study that found “companies that adopt bold, offensive strategies in the face of industry digitization improve their odds of coming out winners.”
Companies must embrace digital technology to improve operational effectiveness. The global utility Enel has a division that experiments with new business models (demand management and electric vehicle charging). The unit is called Enel X and has enormous growth potential. However, it currently represents less than two percent of the parent company’s revenues. Everyone else at Enel focuses on optimizing the existing business and providing its nearly seventy-two million customers with high-quality service. But the new technology in its factories and distribution networks, including reengineering its infrastructure and processes, that went into Enel X has bolstered operations throughout the organization. For technology to help manufacturers succeed, leadership should take the time and energy to develop an adaptation strategy that best fits their organization’s unique needs and capabilities.
Considering how Digital Manufacturing and the Smart Factory of Industry 4.0 can help you streamline workflow, be better positioned to seize opportunities, and maintain margins. Don’t start out by going for the big objective. Start with low-hanging fruit. Even still, before beginning any digital manufacturing initiative, understand the technology. Learn what technologies perform what types of tasks and the strengths and weaknesses of each. If you have a chief technical officer or IT director, get them involved in discussions as soon as possible. Suppose people in the IT department have a good understanding of the different Smart Factory technologies. In that case, they’ll save the company wasted time and money pursuing the wrong technology. They’ll also help prevent making technology choices that don’t fit the company objectives. Again, the real tipping point is the willingness to learn.
If you don’t have information technology or data science capabilities on staff, build a team of external service providers. Having the right pool of resources is essential.
The Key Areas of Digital Manufacturing
Utilizing cutting-edge technologies to optimize processes can result in financial efficiencies within a manufacturing operation.
Enhanced Customer Experience
Customer-facing technologies help give the customer transparency into the manufacture of their product and ease of communication and collaboration with the manufacturer.
Provisioning of Resources for Employees
A modern workplace nurtures better employee satisfaction and retention rates. The next generation of employees has grown up with high-impact technologies. They expect the deployment of quality effective technologies within their working environments.
Traditional manufacturing and production methods are undergoing digital transformation. Going beyond production automation, the Information and Communications Technology (ICT) found in Industry 4.0 blurs the boundaries between the physical world and the virtual in cyber-physical production systems (CPPSs). A report from Deloitte describes CPPSs as online networks of social machines organized like social networks. They link IT with mechanical and electronic components that communicate through a network. Smart machines continually share current stock levels, problems, and changes in orders or demand levels.
Improved Operational Efficiency
Although last on our list, operational efficiency is the biggest “selling feature” of the move toward Digital Manufacturing strategies. By digitizing operations, data can be collected, categorized, and analyzed at every stage – from raw materials to finished and delivered products. The utilization of this data then allows your manufacturing firm to use agile cycles to grow and scale.
Digital Manufacturing Isn’t Just for Global Giants
Most manufacturers across the country have engaged in a digitization effort. That digitization allows their CIOs to develop digital transformation strategies to help their manufacturing operations inch closer and closer to Industry 4.0 ideals.
Digital Manufacturing is a genuine game-changer for the industry. To say there are many benefits to digital manufacturing is an understatement. The hyperconnected Smart Factory merges complex manufacturing processes across different departments. Smart Factories eliminate the paper-based process and automate data exchange in fractions of a second. Communication and collaboration going in all directions simultaneously far extend the reach of any manufacturer. What is more, digital manufacturing inspires people to learn and innovate on a much higher level.
Every manufacturer is at a different stage of their Digital Manufacturing journey. The decision to convert traditional factories to smart facilities requires deep engagement with the entire company. Set priorities and create a portfolio of projects. But keep this in mind; the benefits are well within the grasp of even small to mid-size operations. Remember the story of Gojo and how they routinely invested in modernizing their operations. Not all at once but over time. When the time came, regular investments in technology made all the difference. Using smart and autonomous technologies, CIOs are blending the physical and digital worlds while making the most of human resources along the way.
How can organizations unlock the full potential of IT to accelerate?
Can you scale while keeping all the plates spinning? Your current employee base may be doing an excellent job of keeping all their plates from crashing to the floor with the current technology in use, but adding many more employees and ramping up operations with that same technology stack results in pieces and shards of plates smashed all over the floor.
Business scalability is all about efficiency and growth. To be genuinely scalable in the modern sense of the word, an organization must:
accommodate increased demand
stay on top of trends
be agile enough to handle disruption
The punch line is that all this has to be accomplished quickly. The need for speed requires companies to be highly efficient. That’s where the advantages of cloud environments come into play.
Scaling within the cloud helps you avoid the crash-resume-crash-resume cycle that companies are faced with when trying to scale with an on-site IT infrastructure. Modernizing operations is the “end game” of the digitization phase, which is foundational to the digital transformation journey—establishing an operational backbone is the objective many forward-leaning companies have pursued diligently in the past few years.
Operational excellence is now the minimum requirement for being competitive in the digital age. Let’s explore.
The Old Models of Scaling Won’t Work Anymore
For many, digitization has been the goal for years. The pandemic lockdowns were a coercive force pushing companies to send their employees home to work; thus, digitizing many aspects of their operations. Correctly digitizing operations move the organization further to become a digital company. That is being able to offer digital-value propositions to its customers.
Scalability used to be strictly about increasing profitability and improving efficiency when workload increases. It is also about adding new value propositions (digitization) at speeds that can keep up.
Older ways of doing things will work for a short while, but it won’t take long for businesses to fall too far behind.
Companies have used a siloed way of doing business since day one. Managers would create systems, data, and processes within business silos. Leaders often fail to consider how their systems and processes might eventually need to coordinate with other parts of the business. Once they recognized integration requirements, they’d tweak the systems and processes to achieve their objective, again within their given silo. Managers would address the need for linking systems and processes. The operational environment was complex, hierarchical, and too slow to be effective in today’s digital business world.
The New Dynamic in Scaling Operations – Digital Transformation
According to a December 11, 2020 article by McKinsey & Company, companies worldwide are hard at work evolving their operating models at unprecedented speed.
The hurdles go far beyond shifting back and forth between remote, in-office, and hybrid work models or simply adding or subtracting work-from-home talent as needed.
Digitization enhances operational excellence.
We’re talking about creating a coherent set of enterprise systems, data, and processes supporting core operations. Becoming digital enhances the customer value proposition.
Don’t confuse digitization (doing things we’ve always done only better) with digital transformation (doing things differently than we’ve done before). Being digital enhances the customer value proposition.
Business leaders who think they’re leveraging digital transformation strategy when, in fact, they’re just digitizing some aspect of their operations may achieve operational excellence on an outdated value proposition. For example, you are a taxi company that’s just perfected its operations (digitization). Suddenly Uber and Lyft arrive (digital companies). How’s that going to impact your business? Or consider the impact Amazon has on traditional retailers.
The Next Generation Model of Scaling
This operational backbone, or next-generation operating model, is a new way of running an organization. Next-generation operating models replace messy legacy systems, processes, and data generated by siloed business units. The new design is more open and non-linear. Systems, data, and processes become like the building blocks of a lego kit. that can reallocate resources and develop new digital capabilities in a matter of weeks. Now that’s a challenge.
No wonder, despite Herculean efforts and substantial investment, few companies can move to a modern, digitally-enabled way of working across the entirety of their operations.
Einstein is Never Wrong and Why Scaling in the Cloud is the Right Call Now
In their book “Scaling Up: How a Few Companies Make it and Why the Rest Don’t,” Verne Harnish and the team at Gazelles explain scaling all aspects of an organization (including the technology) by quoting Albert Einstein: “Everything should be made as simple as possible, but not simpler.” Harnish goes on to say, “Scaling a business is a complex endeavor and requires robust – yet simple enough – tools and techniques to get the job done.”
That’s why companies worldwide are attracted to cloud-based applications and workflow as they try to scale. It’s robust enough to handle their “complex endeavor” but with tools simple enough to be implemented and utilized by a fast-growing internal team of employees.
Verne Harnish also helps us envision the stages of scaling infrastructure when he writes, “When you go from two employees to 10, you need better phone systems and more structured space. When your company reaches 50 employees, you still need space and phones. You suddenly also require an accounting system that shows precisely which projects, customers, or products make money. Between 50 and 360 employees, your information-technology systems need to be upgraded and integrated. And above that, you must revamp them again….”
The Two Pizza Rule – Everyone Needs Access, but Not Everyone Needs Their Own Pizza
Amazon has the “two pizza rule.” By it, they mean that no team should be any bigger than can be fed with two pizzas. While that works for physical teams, it doesn’t work for your IT. If you’re going to scale your personnel, you have to scale up your IT – applications, cloud assets, infrastructure, etc. You can’t scale with a “two pizza” rule for your IT infrastructure. Sure, everybody needs access to the “pizza,” but not all your employees are going to need the same key or even access to the same kind of “pizza” as other employees. Scaling technology isn’t simple and requires a partner who understands how the organization’s goals, people, and roles all funnel into the need for tech access as the company scales.
Harness Cloud-based Data Power to Inform Your Scaling Strategy
Your data for your KPIs has to scale – and evolve – with you. Big data, IoT, and AI can help your business leverage more granular data than ever before. Today, under the direction of Reed Hastings, Netflix is a prime example of how scaling a company’s IT can result in game-changing data usage. As Netflix tracks every action of its 213 million-plus subscribers, it can accurately predict what shows, and movies from its production wing will be successful. With this visibility into customers comes the ability to be nimble and agile with their service delivery.
Where Did Outdated Scaling Models Originate? – The Industrial Revolution
Alfred Chandler, Jr is one of the most respected figures in business history. His work redefined industrialization’s business and economic history and gave us a fresh perspective on how the modern digital firm differs from the industrial-age model.
Managerial firms, according to Chandler, evolved to take advantage of productive techniques available after the establishment of rail networks. More profits came from higher productivity and lower costs. America’s “managerial class” arose from this operating model where managers coordinate increasingly complex and interdependent systems.
The New Kind of Firm & a New Way to Scale
Marco Iansiti and Karim R. Lakhani’s HBR article of Winter 2021, “Competing in the Age of AI,” describes how Chandler’s model focuses on the benefits for those companies that successfully achieve greater production scope, and/or variety. On-going efforts to improve added learning as a key characteristic of successful scaling.
“Scale, scope, and learning have come to be considered the essential drivers of a firm’s operating performance. And for a long time, they’ve been enabled by carefully defined business processes that rely on labor and management to deliver products and services to customers, and that are reinforced by traditional IT systems. After hundreds of years of incremental improvements to the industrial model, the digital firm is now radically changing the scale, scope, and learning paradigm.
AI-driven processes can be scaled up much more rapidly than traditional processes can, allow for much greater scope because they can easily be connected with other digitalized businesses, and create incredibly powerful opportunities for learning and improvement, like the ability to produce ever more accurate and sophisticated customer-behavior models and then tailor services accordingly.”
The Foundation of Operational Excellence
Becoming digital is an essential watershed for any modern company.. Leveraging SMACIT, digital expands and accelerates innovation. However, companies cannot afford to neglect the pursuit of operational excellence.
Executing a business strategy that is consistent, reliable, and cost-effective is foundational to sustained business health. Operational excellence is also the mindset that embraces constant and never-ending improvement. Continuous attention to pursuing operational excellence means every employee can see, deliver, and enhance the flow of value to customers.
The constant pressure for all companies is a perfect storm of demands that include the speed of delivery, technology, and communication acceleration. Every employee from the top down is busy making decisions and exploring ideas. They don’t have the time to waste on broken operational processes. Information technology that encompasses systems, processes, and data must make things easier for employees and customers alike.
Perfecting the business model via digital transformation has been key to the expansion and domination of household brands today.
Apple began its journey in 1976 and slowly climbed, but its rocket ship of success didn’t go into orbit until 2001 – 25 years later – when the iPod was released. Their launch into this new realm was only made possible with the scalable technologies needed to supply and service the massive demand for the iPod, and its succeeding generations of small devices for the mass market.
Starbucks also had its learning curve. The company took 20 years from 1971 to perfect its business model and underlying corporate technologies to scale from 100 locations in 1991 to 18,000 locations in 62 countries today.
But that was then, back before the availability of cloud resources. Now, the cloud, and cloud-based technologies, can propel companies, big and small, into a new stratosphere of capability within a short amount of time.
Investing in Scaling Tech Capability Pays Off
While you expect a company like JP Morgan Chase to be investing heavily in technology, what may not quickly come to mind is that they have been investing in tech all along the way as they scaled the business. They are investing in IT-based workflow advancements because that investment pays off. JP Morgan Chase has more than 50,000 technology professionals and invests eleven billion per year in its digital development.
But JP Morgan chase isn’t the only big-name company where we see investment in tech as a part of a scaling strategy. In 2018, Walmart chose to bring on an additional 1,700 IT staffers. To quote USA Today, they “beefed up” their “omnichannel presence to better compete with Amazon, Costco, and other peers.”
Walmart’s stock rose by 17% over the next two years.
While neither JP Morgan Chase nor Walmart took on massive “scaling” projects over the past two years (not many did), we can guess that the industry leaders see technology as the business expansion enabler that it is.
Scalability is a necessary ingredient to future-proofing your network. Businesses have survived without a scalable network, but that won’t be true as we move into this decade.
Business leaders must liberate their companies from legacy systems, safeguard their data, and continuously conserve costs by implementing technology that fits where they’re at and where they’re going strategically. Scaling a business with agility and resiliency can only be achieved by embracing new technology, and that begins by designing an IT environment built for the digital age.
Success in 2022 is going to be about flexibility and scalability. If you’re going to compete and win, the cloud environment will be critical to your success.
Choose options that allow enough elasticity for you to reimagine what optimal scalability means to you.
Lay the groundwork so that there’s a solid foundation. That way, your digital journey will move forward with incredible, even inspiring, momentum.
Scalability has always been an essential characteristic for companies to develop. Today, an organization’s capacity to scale quickly, effectively, and economically can mean the difference between winning new business or missing it altogether. At the rate business moves in 2022, the window of opportunity opens and closes quickly. Being prepared is essential.
An increase in scalability enables businesses to grow their capacity and capabilities effectively and with minimal disruption. The benefits of increased scalability extend beyond handling more business. The foundations required for modern scalability also deliver immense value in other areas, including:
· Enhanced & Improved Customer Experience
· Improved Resiliency
· Nimble Operations
· Highly Engaged & Motivated Employees
Scaling is complex and involves many moving parts ranging from building the right corporate culture to hiring high-performing talent, having the proper structure, and the financing to support it. Using the right technology is an essential ingredient, and that’s where this article will focus.
Everyone Benefits When People and Tech Work Together
Any discussion about technology and modern scalability involves leadership because leadership needs to communicate closely with internal IT and external technology partners. A technology engaged leadership is the only way an organization can prepare its people and culture to handle the growth. Improving scalability in the modern sense means a paradigm shift in how the company operates. The intention and drive to become a better company, to escalate its level of service to its customers, has got to be part of the equation, or attempt at scaling to any significant level will fly off the rails.
Complacent leadership or a culture of doing business-as-usual is one of the reasons companies procrastinate investing in upgrading their technology infrastructure. If current equipment is working, why mess with it?
Legacy Systems Are More Susceptible to Cyber Attacks
This kind of reliance on legacy equipment not only hobbles any attempts at scaling, old hardware, and outdated operating systems are a disaster waiting to happen. Legacy systems are a significant cybersecurity risk.
Our articleWHY IS DIGITAL TRANSFORMATION SO IMPORTANT TO SUSTAINED SUCCESS (PART 1)? Explains the importance of having people with good communication skills leading technology, data, and processes. It would be best if you had good communicators knowledgeable about available technologies and how they can help. These consultants can help you rethink your operations from the top down. The right partner can also maintain and refresh technology roadmaps to ensure a consistent unified architecture (referred to as an “operational backbone” in the article mentioned above).
IronOrbit is the kind of partner who has the business operations experience and technical expertise to get your next-generation operating model started on solid footage..
Increasing scalability is a challenge for any company on multiple levels, but significant changes can become seamless with the right technology in place, at least from an IT perspective.
Talk to one of our consultants today. We can help get the conversation started and help you evaluate the best available options that are right for your business.
Scaling up is the ability to take on increased workloads in a cost-effective manner and meet the demands of your business without suffering the negative consequences of overreaching.
Scaling up sounds like a fantastic idea. After all, who wouldn’t want to be able to handle more work, delivering more goods and services while leveraging economies of scale for greater profitability?
But the promise of scaling is often like an iceberg. What you see above the water (the work to be done) is nothing compared to the work lurking under the water. These are the challenges faced in scaling a business. Some companies get to a point where it is painful to add another client or bring on more talent. Scaling up seems like piling on more overhead for less reward. Revenue never has a chance to turn into profits.
Here are some barriers many companies may face as they ramp up their operations.
Scaling Up Too Soon
A good question to ask a good business consultant is, Is it too soon to grow the business? Any time before you have all the pieces in place and a strategy to scale is too soon. Is the market is ready to embrace and demand your products or services? Timing is everything. First, to go big into the market is sometimes a good idea, but sometimes not. Companies get eaten alive and never recover.
No Plan to Scale Up
Often the small to mid-size business fails in the efforts to scale for lack of planning. They have an objective and a vague notion of how to get there. Growth-minded companies might partner with that vendor or hire new employees. But all too often, a structured plan is missing. Having a strategy that guides the requirements, stages, and timeline for scaling is foundational for success. As a result, the timing is off, and the company is missing pieces of the puzzle. Frustration and failure soon follow.
No Understanding of the Difference Between Growth and Scaling
For most successful companies, growth came before scaling up. Taking time to grow allows SOPs to be established and perfected. Taking the time to grow enables hiring key people and building a solid reputation. These things are critical for financial backing to scale. Growth is a time to experiment and approve or discard strategic partners and vendors. Growth helps them understand the management and IT resources required for successful scaling. Multiplying processes and output without a substantial increase in resources is the foundation of scalability. Business leaders need to know if the company is prepared to scale up.
Unnecessary or Untimely Product/Service Additions
As soon as a company begins to have a little bit of success in their efforts to scale, they often become overzealous with their efforts to take over the marketplace.
They may move away from their core business too quickly and begin advertising products and services they are not prepared to deliver. Even if they can make a dollar on those tangential goods and services, they are taking resources away from what is central to their current revenue stream and their ability to scale.
Selecting the Wrong Partners & Vendors
Companies across the planet have learned the wrong partners or vendors can put companies at risk. Long supply chains and unproven vendors can have detrimental consequences on the delivery of goods and services to your customers, as well as injure brand reputations.
Avoid vendors and strategic partners who over promise and under deliver. There is no room for freeloading. Everyone has to do their part.
Lack of Internal Communication
Employees need to know the company culture and what is expected. Companies need complete buy-in from their workforce to scale up successfully. There also must be a strategy communicated internally. Along with the nuts and bolts of your well-laid strategy is a minefield of employee concerns, expectations, and emotions that you must address. If employees feel left out of the loop – or worse, insecure in their jobs – they will not be best positioned to support scaling efforts. Internal communication requires more than just a company-wide meeting or a series of internal memos sent out to senior staff. Instead, the business leaders must keep their finger on the pulse of how the staff is acclimating to the proposed and in-progress changes.
The last decision Steve Jobs made was to build Apple University.
He knew that it would be the one legacy he’d leave behind so that his organization would thrive long after he was gone.
Once you’ve been able to leverage some economies of scale, there is often a temptation to cut prices to undercut the competition and gain more market share. “After all,” you think, “We’re still making the same amount on our goods/services.” While it’s tempting to cut your prices and try to push the competition out of business, the money you will lose is better saved and utilized within your scaling efforts.
Technology That Can’t (or Can’t Easily) Scale-Up
Whether you’re working with legacy systems that keep your productivity limited, or you’re working with on-site workstations and servers that are expensive and cumbersome to scale, your technology is limiting your potential. This roadblock used to be a nearly insurmountable one for businesses trying to scale on a budget. However, with advances in cloud-based IT infrastructure and Desktop as a Service, the financial hurdle considerations are lowered due to the cloud’s ability to scale with your business expansion. Companies across the planet have factored cloud computing ability into their scaling strategy and are successfully leveraging the flexibility, mobility, and cost-effective nature of cloud workflow assets.
As an IBM fellow, Jason McGee puts it, migrating applications to the cloud can deliver significant business benefits for companies of all sizes.
Failing to Create Long-Term Demand
Business leaders that fundamentally misunderstand the role of advertising and marketing often pin their hopes of scaling on the stop-and-go stutter-step of marketing efforts. While marketing strategy should always be a part of your scaling endeavor, it is not sufficient on its own to supply continuous, qualified customers. Instead, part of any scaling strategy should be a plan to grow market demand for your products/services. After all, you want them knocking on your door for what you provide; you don’t want to be chasing work constantly with ad campaigns.
Cash Flow and Credit
There is no way around it, scaling requires sufficient cash flow. Many organizations with a fantastic plan to scale launch that endeavor, only to find that their efforts are stymied by lack of on-hand cash or credit. In a recent episode of “What’s Up AEC?!” the Immediate Past Board Chair of ACEC National, Charles Gozdziewski warns about the cash flow aspect of scaling up too quickly. “I’ve seen small firms suddenly become part of a big project. They go from 10 people to 25 people and then they go bankrupt. They just don’t have the financing or financial knowledge to handle it.”
Each stage of your scaling strategy will require more financial backing, and that backing must be available at that stage or things begin to unravel. Setting yourself up for success requires ensuring that you will have the backing you need well in advance of your step to the next level of operational expansion.
Quality Employees Instead of Quantity
Scaling starts and ends with individuals. Whether you are in a service industry or manufacture goods, your employees can make or break your scaling prospects. As much as anything else, scaling requires the right beliefs and behavior. Growth-oriented companies need people who are comfortable with change, who can move fast, and take ownership of tasks. In the rush to scale, companies often hire too quickly and find that they experience internal roadblocks to productivity because of the unqualified staff they’ve hired. Unfortunately, companies that are quickly ramping up delivery of goods and services often don’t have time for extensive employee training or the flexibility for employees to learn “on the job.” A resourceful HR team should be among your first hires to help ensure that your business sources and hires employees that can step in and do the work without handholding.
Ignoring Growth Pains and Fixating on Growth Pains
Whether leadership is determined not to let that “one issue” hold things back or fixate on that “one issue” to the detriment of other things that require attention, it still lands the administration in a difficult spot. On the one hand, small issues at one stage of scaling can become mountains of pain in the next stage of expansion. On the other, a fixation with a specific issue can lead to an unhealthy overemphasis on one aspect of the business, throwing everything out of kilter.
To scale, you must be aware of growing pains and be able to handle them appropriately without devoting all your attention and resources to those problems.
Organizations with micromanagers at the top very often do not do well when it comes to scaling up operations. Delegating responsibility is an essential component of scaling an enterprise. A business leader must know their self well enough to see this tendency in themselves before it becomes an issue that derails the scaling process. Sometimes, it’s necessary to step into a different leadership role and allow someone that has delegation skills to fill that administrative slot. As you scale, so should your management structure. Finding the right role for you to play and bringing in the people you need to bolster your weaknesses is a sign of a good leader.
Despite significant roadblocks to developing capacities to scale up quickly, there are multiple benefits for an organization to prepare itself for the likelihood of scaling up.
The challenges of scaling up are complex because scalability isn’t just about growth. It also has to do with its ability to be flexible, agile, and versatile. The same things that position the business for expansion are the same things that prepare them for unknown shifts in the market and unforeseen events like a worldwide pandemic. Preparedness is all about becoming proactive and being strategic with digital technology.
In a Forbes article from March 1, 2021, Paolo Gallo and Giuseppe Stigliano write, “Because of the dizzying speed of change today, fueled by this umpteenth acceleration, companies can’t count on their strengths alone to innovate. The CEO of a mobility services company reminded us how crucial it is at this stage to build eco-systems, resisting the temptation to reduce them to ego-systems. We have to collaborate with third parties to build systems in which the individual parts function as a single entity, in a more or less continual way to provide high-value-added services to final customers. Companies have to see themselves as fluid platforms, capable together of providing a value proposition that is exponentially bigger than what they could offer alone.”
In one of our previous blogs, we stressed the importance of componentization as a key ingredient to offering new digital value propositions. Taking the time to componentize offerings and build a solid digital foundation for your company will also position it for agility, flexibility, and growth.
The in-depth Deloitte Insights article, Putting Digital at the Heart of Strategy, goes beyond pointing out that digital transformation enables new growth opportunities. It indicates that those companies that don’t digitize in the next five years will be doomed.
Digitizing operations, a key benefit of cloud computing, improves an organization’s ability to meet sudden increases (or decreases) in demand.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.