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January 20, 2020
Industry TrendsTechnology

Around the world and our industry, shipbuilders are starting to feel the pains of the technical decisions they made as a result of their earlier digital evolutions. So many are feeling penned in by the information silos that have appeared as a result of years of making individually good decisions, that don’t work together as a unit.

The traditional view is that it’s costly to change. Both in terms of raw implementation cost, but also the time costs associated with implementation, which depending on the system can take months or years, and the risks that a new system can have on current and future projects. It doesn’t help that shipbuilders are (justifiably) risk averse.

Cost is one difficulty that is often top of mind, but there are also additional unique challenges of adapting, integrating, or upgrading systems in our industry, particularly if they were never developed with shipbuilding in mind.


Reality

When any single bad decision can have a serious impact on the health of the business, shipbuilders are skeptical of technologies that sound ‘too good to be true.’ But it’s also clear that the current ways of working are becoming less applicable to the future of shipbuilding.

So much of the complexity in building ships lies beyond just the engineering of the ship. The activities and people outside of engineering have a huge impact on overall successfulness and profitability of a project. The scale of shipbuilding projects and organizations makes managing all that complexity difficult – making it easy for gaps and silos to form.

Engineering is the engine that drives the ship and that will not change. However, engineering needs to break their silos to be able to share information to the rest of the team in order to make their life easier.

Denis Morais, co-CEO

But breaking silos and creating seamless digital workflows to share information is just the start. These two improvements can now allow engineering to look at their engineering processes and determine what they can do differently, not just to engineer a better product, but instead improve how their company approaches and tackles the business of shipbuilding.


Transformation

One of the first steps is to identify the actual challenge ahead for your organization, find where the silos lie, and determine whether this is fundamentally a business, technology, or cultural problem. Ultimately, what you may find is that not all of your silos are bad. Process and organizational silos can exist without being a negative on the rest of your organization, but once you encounter a data silo, it’s time to break it. Doing so is what will transform your organization to be one that allows design, engineering, planning, and every other department to work from the same BOM. The organization remains structurally the same, but every individual is fundamentally better able to perform the task at hand.

So, CEOs need to help their senior leaders let go of what worked well in the past to shape a new future. One that enables transformation to thrive – which is void of siloed thinking and siloed behaviors.

Rob Llewellyn, CEO, CXO Transform

Handling Legacy Systems and Data

When the appropriate changes to our organization are identified, whether that means changing the way people, processes, or technologies (or any combination of the three) are utilized within the shipyard, we also need to decide how all the current disconnected and siloed information will be leveraged in the future.

Making this decision is difficult because there is a cost to migrating legacy data into any new structured or modern environment. Often, there is not even enough information currently in place to link and create relationships within the new environment. But the cost of maintaining the legacy system is significant and is a huge risk to the organization if it runs on specific hardware (mainframe) or software (Windows XP) which is no longer supported or available.

Management always initially wants to keep and migrate the data because they see the loss of information as a huge waste. Not migrating legacy data into the new system also adds a cost to any contracts which require the use of the old data, as now it would have to be re-created in the new system. Ultimately, that means reduced profits or opportunities.

Deciding on what is the best strategy for the business requires balancing the costs, benefits, and risks in both the short and long run. There will never be a simple answer on what should be done, and it will be different for every shipbuilder. However, as long as the executive team understands the pros and cons, they can reach the right decision for the organization.


Takeaways on how to Break Out

Shipbuilders around the world are now starting to look at their businesses in a more agile way, proactively making improvements before the customer even demands them. They are mitigating the increased risk of doing so by taking precautions so that the business decision makes sense.

Taking that risk allows them to work with information from any source and distribute that information across their departments. The long-term advantages that occur as a result are noticed by customers and the value can be passed on to them early on.

As a takeaway, no matter where you are within your business transformation, it’s crucial to:

  1. Identify how your processes and workflows can be reimagined in a digital context.
  2. Which of your silos center on data and which are process or organization based.
  3. Look at the small incremental ways in which any new technology can be implemented.
  4. Demonstrate the value to the customer early on.

See more thoughts on technology in shipbuilding on SSI co-CEO Denis Morais’ Waveform blog.

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