I was reading the MHI’s annual industry report* recently and was not altogether surprised that adoption rates of transformational technologies to achieve NextGen digital supply chains are markedly lower today than predicted four years ago.
The report went on to say that the three main barriers to greater adoption were:-
1) Business case and ROI
2) Skills and workforce
3) Trust and cybersecurity
Just looking at the report’s figures on ‘Wearable and Mobile Technology’, it was predicted in 2014 that within 3-5 years there would be 64% adoption; today’s reality of 23% is significantly less.
Dig beneath those figures and, sticking with Wearable and Mobile Technology, the biggest barrier to adoption in this instance was ‘lack of a clear business case to justify the investment’. This was closely followed respectively by a ‘Lack of understanding of technology landscape and effects on our business’, and a ‘Lack of access to capital to make investments.’
On reading this, I think what resonated most were the wise words preceding the chapter on overcoming barriers to adoption. Scott Sopher of Deloitte Consulting LLP was reported as saying: “The time is now to think big, but start small and act fast. You don’t need to invest a lot to start testing these technologies.”
Building a business case to justify expenditure in proven, established technologies is quite straightforward. Building a business case for new and innovative technology, where costs and benefits are more speculative is trickier. Add into the mix that by the time you’ve made the case and implemented the technological improvements, the goalposts will have moved and you’ll have been left behind.
So what’s the answer?
Again, I refer to the report where it claims that the business cases of successful innovators usually start small but in the context of thinking big. That’s to say they break down the value proposition into bite-sized chunks with the express aim of piloting, learning fast, refining and rolling out more widely. By validating the smaller steps in this way the bigger moves are easier to justify.
In my last blog I touched on the concept of rentals, and how renting hardware like mobile printers and scanners eliminates the capital outlay of replacing/upgrading depreciating equipment. But where I believe rentals score in the context of overcoming barriers to adoption of NextGen technology is that they enable firms to pilot programmes as suggested in the preceding paragraph.
For a set monthly fee, manufacturers or logistics operators could outsource the ownership, deployment, management and support of the hardware they need, thus freeing them up to refine processes and learn from the pilot programme. Once the pilot scheme has finished, they then either have the option to terminate the contract, or extend it for the major roll out and save themselves the capital investment. Or they could upgrade to the latest devices.
One of the seven pieces of advice imparted by the MHI report on what leaders should be doing was ‘Focus on the overall program transformation, not individual investments’. Hardware rentals enable that advice to be played out, so think big but start small.
Renovotec is the UK’s fastest growing provider of rugged mobile hardware; as well as delivering end to end managed & consultancy services, wireless networking, enterprise mobility, mobile data capture, printing and hardware rentals solutions. With over 25 years of industry experience, Renovotec supports customers across multiple industry verticals – including warehousing, transport & logistics, manufacturing and field mobility.
Author:- Richard Gilliard, Managing Director – Renovotec
* The 2018 MHI Annual Industry Report. Overcoming Barriers to NextGen Supply Chain Innovation