2019 is likely to present a host of challenges as global political strife increases, coupled with slowing economic growth. The result is likely to lead to an
era of cost-cutting in many industries. Should this occur, products and their related quality and innovation will determine which organizations continue to be relevant.
CIOs and business leaders are facing a double whammy as this economic uncertainty is occurring at a time when there is a technology tipping point. They find themselves needing to justify the large technical debt they have occurred over the past decade. Those willing to address the gaps in process and technology and double down on dismantling silos—through product lifecycle management (PLM) tools—will be the ones who emerge victorious in their product-complexity endeavors.
As we did last year, we have conferred with our customers and internal teams to bring forth our predictions that, we believe, will significantly shape manufacturing businesses in 2019.
Prediction #1: Economic slowdown roots out the weak
Whether or not you believe that this will be the year for a global economic slowdown, there are certain truths for those that deny or do not prepare for its inevitability. We continue to see China’s growth receding, interest rates across the globe are increasing, and close to home, continued political strife has culminated in a government shutdown that is affecting the economy.
We expect this volatility to root out some weaker manufacturers, resulting in bankruptcies, mergers and large restructuring announcements. These will be the attempts to push a reset button for those who have not anticipated market changes and have high costs associated with missing the market on customer demands for products, or an inability to innovate and manufacture complex products cost-effectively.
At Aras, we anticipate increases in rip-and-replace strategies, as CIOs with their backs against the wall will be empowered to act decisively. They may believe that this strategy will put their organizations on a competitive footing and address their long-term fight with technical debt (all the work that still needs to be done to existing systems), but the cost is just too high due to poor architecture decisions.
Prediction #2: Embedded software becomes strategic
Software has been eating the world for a few years now, particularly in the consumer-market space. Through innovative applications, companies like Amazon, Uber and SpaceX have been able to systematically disrupt markets by bucking convention and solving issues previously thought unsolvable.
We believe 2019 is the year for most manufacturers to realize it’s time to elevate a precious resource of their own—embedded software. This specialized software is written to control machines and devices for a specific operating function—navigation, collision-sensing, fly-by-wire, and missile-guidance to name a few. This software is at the heart of how their products work and how they feature unique differentiators to compete for market share.
As opposed to a separate development process in the product-creation/development cycle, we predict embedded software (and the groups that manage it) will be take a central role determining the future of products, even going beyond traditional products to those that are autonomous and can diagnose and repair themselves. Those who manage embedded software in concert with the entire development of a product will gain competitive edge in the market
Prediction #3: Industry platforms assert more relevance
Over the past two years, we have seen a gradual increase in the availability of industry platforms that group critical processes and technologies, which can support specific business requirements for specific industries. For example, aeronautic and defense giant Airbus is partnering with the software community in order to create their Skywise open-data platform for aviation. This platform is designed to meet specific requirements within their industry and ultimately serve as a single point of reference for major airline operators engaged in digital transformation.
Another example is Bosch’s Connected Industry that combines people, data and machines in a customer’s value chain (think customers, suppliers, plants, office, etc.) in order to create full connectivity and transparency, which reduces complexity
We expect industry platforms to gain momentum in 2019, in terms of both use and the number of platforms that become available. Why? As technology accelerates at a furious pace, many organizations will continue to have a skills gap when it comes to incorporating this technology individually into their business. Similar to incorporating complex products into their environment, organizations will rely on industry platforms to pull value from the products they purchased.
Users signing up for industrial platforms should look for offerings that have traceability of information, aka the digital thread, in order to access information across the product lifecycle. Users should also consider industrial platforms as tools with which to learn new approaches (IIoT, predictive analytics) to fold into existing business processes and increase operational efficiencies.
Looking forward to what 2019 will bring…
This will be a challenging year for manufacturers, as one of the longest runs of economic growth begins to teeter and stagnate. Those accepting a new reality and willing to anticipate the next phase of the economy will come out on top.
Now is not the time to pull back on investment in people, products and technology. The winners will be those manufacturers that continue to adapt and create complex, high-quality products that cost-effectively meet customer demand, all while creating innovations that enable them to do more with less.
Jason Kasper is a product marketing manager with Aras.
