Using IT to drive innovations and revenues

The ability of information technology to improve efficiency and raise productivity is expanding to the next level of digital transformation: the top line of the profit-and-loss statement.

Manufacturing companies are discovering, developing and tapping new markets created by technology. Customer-focused innovation is a primary strategy for 78 percent of manufacturing executives, according a report from, “How Advanced Manufacturing Is Helping U.S. Companies Compete Globally.”

Using mobile technologies to engage customers is a key area driving innovation and revenues. With the boom in connected devices – predicted to rise to 25 billion by 2025 – manufacturing companies are finding innovation opportunities based on data sharing.

Today, instead of functioning as a mere operations tool, technology is an integral part of company products and services, literally built in.

For example, Michelin is creating a new service, Michelin Tire Care, that increases fleet performance through communication devices embedded in tires. Tires can be monitored for air pressure, tread depth and irregular wear, thus preventing on-road problems. Since down-time and accidents cut into trucking revenues and profits, this new service provides a key customer benefit.

GE Aviation is using big data to enhance the performance of commercial airlines and cargo carriers. In a joint venture with technology company Accenture, GE created Taleris, which provides software that can monitor fuel efficiency, airplane performance and maintenance faults. The benefit to customers is better fleet utilization and prevention of service disruptions and delays.

These new services also create an ongoing link between the product and the manufacturer. Instead of the products being released into the wild, as it were, the company of origin continues to be engaged in how well they perform. In addition to enhancing customer satisfaction, this data can be fed back into the design process to address problems, create innovation and improve performance.

The move toward collaboration is also a hallmark of digital technology innovation and integration. Manufacturers are finding that creating platforms and software systems requires the in-depth expertise of a technology partner.

Another emerging area is dynamic content communication that has revolutionized online commerce through tailoring messages and information to customers’ interests.

An example is the recommendations feature offered by Amazon, where other items are offered based on past purchases or searches. The logic of dynamic content is based on the most basic marketing axiom – know your customer. In addition to presenting purchase options, sites can be customized to skip redundant steps, provide information and services based on purchases and product life cycle, and present tailored graphics.

Some manufacturing companies are offering blogs to address related concerns of customer groups, such as business ownership or management. For such a resource to be successful, careful thought needs to go into content libraries and copywriting. Understanding the key issues and needs faced by customers are essential to creating value and enhancing company image.

Search engine optimization (SEO) needs to take into account actual search paths practiced by customers, not just follow momentary blips on the search engine radar.

The sophistication and transformative nature of digital business is also changing the role of the chief information officer (CIO). No longer can IT be regarding as a back-office function, it is key to creating new business and fulfilling customer service requirements.

The CIO must be involved in business planning at the highest strategic level to fully function as an integral part of product delivery and service. All too often, technology resources are a patchwork of hardware and software added on as they were developed. Now, technology is built in as the products are developed.

At the same time, board directors and the rest of the executive suite must understand the core role of technology.

Gartner Research found that 54 percent of board directors plan to take an active role in their company’s digital transformation. It’s key for those driving strategy to understand the possibilities of digital technologies hold in creating new opportunities and partnerships.