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February 14, 2018

It seems no matter where you look you will read about how technology will change all aspects of our personal and our business lives. The promise of all the available and new “mature” technology will allow us to do the unimaginable. My most popular blog series is the Future of Shipbuilding (15+ years)

I am definitely one of those people who love technology and know it will transform our lives enough that we will not recognize it even 10 years from now. However, where I differ from most writing about technology is that I understand the difficulty from incorporating what seems to be “magical” technology into business, especially the business of shipbuilding. Instead of writing purely about technology I write from the intersection of my 3 passions Technology, Business, Shipbuilding.

In one of my last blog posts Shipbuilding Tech Predictions for 2018 I received a lot of feedback and comments about how I predicted that the shipbuilding industry will not see very much widespread adoption with many of the technologies in 2018. Some agreed and others wondered how a person who writes about the future of technology can be so pessimistic about our ability to adopt new technology.

First, I do not think I am a pessimist at all. I am an optimist but understand that incorporating any improvement into the shipbuilding industry takes time even if the technology is very mature. I could call myself a “realist” but I think everyone thinks or hopes they are…and I am no different.

I thought I would write a blog post about the main challenges we all need to overcome in our industry which is why I think the “initial” incorporation of technology is taking time and will continue to do so.

The top challenges I see are:

  1. Business Transformation is Required and it is Very Hard
  2. Our Current Culture Eats Our Strategy
  3. Software Platforms are Not Fully Capable for Shipbuilding, Yet
  4. Handling Legacy Data & Systems
  5. Inexperience with Implementation of Modern Technology

1: Business Transformation is Required and it is Very Hard

We all know change is hard and takes a substantial investment of time to do what we do differently. The type and scope of the change will affect how long it takes as well as many other factors (people, $ investment, available time, availability of resources, the right resources, clear vision, regulations, etc.) will determine its success.

For any significant and widespread adoption of any of the “hot” technologies, it will require us to change the way we do business. Most companies should know Why they are in business which is reflected in their vision statement. However, What and How they achieve their vision is being completely rewritten with the abundant amount of mature and available tools.

The business transformation companies are going through is the most important first step that every company needs to go through. The example you hear often is the story of Kodak. When digital cameras became mainstream, Kodak did not effectively change its business. Kodak’s business was not about film or cameras but rather about capturing memories. If they properly understood that and prioritized their business transformation into this new world they most likely have been here today and I would have to use another example such as Compaq, Blockbuster, Polaroid, Myspace, Xerox, Blackberry, Yahoo, etc.

In shipbuilding one of the most common first actions in a business transformation is to try to get rid of the information “silos”. We all know that siloed information and teams are the biggest impediments we have in our information rich environment. However, removing silos in shipbuilding (and other industries) is not easy. The amount of people, teams, stakeholders, departments, systems, etc. are enormous and to be able to create a system where all the information is accessible and available to the right stakeholder at the right time is a huge amount of effort. It is not the amount of data per-se but rather the amount of connections/relationships between the end-points or consumers of the information. The more connections means way more complexity. An example which illustrates complexity of connections vs. endpoints is when you compare a mustard seed to a human. A mustard seed has thousands more genes than humans yet humans are more complex. The reason is that there are way more connections between human genes than mustard seeds. The amount of required tight connections in shipbuilding exceed many other manufacturing industries because we are designing, constructing and procuring at the exact same time for majority of the shipbuilding lifecycle.

Another challenge we are facing is how we need to change some long traditions we have had in shipbuilding. I have blogged about this challenge of changing the way owners of the ship interact with shipbuilders as well as to learn to appreciate the value of the digital ship before: What is the Biggest Challenge in Shipbuilding? In simple terms, shipbuilders live paycheck to paycheck or milestone to milestone. Other industries have a similar scenario. However, many have evolved to the scenario where customers understand the value of digital assets such as the digital twin and will want and value a purely digital asset in the first few milestones.

Shipbuilding customers, for the most part, do not value the digital assets created of the ship. Currently, the digital model is currently only a supporting artifact of the deliverables and that is why shipbuilders are motivated with what will get them the next milestone payment, which is something physical. This means they cut corners on creating any high quality digital assets. It will be a difficult journey if the customers of the ship do not change their mindset and value the digital asset created. The awareness and knowledge of the digital twin is starting to change the perspective of many of these customers, but we still have a long way to go. The forward-looking shipbuilders are already investigating in how they can invest early in creating a better digital asset which can pay dividends in this new digital age without adding risk to the current deliverables and timelines.

The last challenge some companies are having with their business transformation is the illusion that they are going through a transformation which I have also blog about before: Digital Transformation Illusion. The danger of this is no different than when we make a certain decision with incorrect information and with the business transformation being the foundation of what everything is built on, it is imperative that we have no other view than what is real.

One of the biggest problems in a Business Transformation is the illusion it has taken place!

-Denis Morais

2: Our Current Culture Eats Our Strategy

The most common reason why people say a project failed will be because of “people.” There are other reasons but most research and investigations will lead to the conclusion of people.

I agree that “people” are usually the issue but I rarely agree with the specific “people” that are being blamed. I rarely, if at all, think the end-users of any project should be blamed for any shortcomings of the project. If they did not embrace the new “thing” or did not want to change the way they work, I think it is the team that implemented the “thing.”

We all know that people find change hard. We all know that there is one or more people that are very active to resist change. The key is we need to understand this reality and incorporate that in our project which rarely happens. We mostly focus to much on the Tools and Process and intentionally forget about the people because dealing with people is hard.

So, the challenge that we face in shipbuilding is that we need to re-learn to focus on people just as much as we do on the tools and processes. This sounds easy but it is very difficult to navigate through various personalities as well as personal political agendas. Changing your company culture is very difficult but can improve or deteriorate your business more than any new tool or process.

3: Software Platforms Are Not Fully Capable for Shipbuilding, Yet

Having an adaptable, flexible, capable enterprise architecture composed of software “innovation” platform(s) is the foundation of your business and is imperative for success in the digital world. It will weave all the information that is necessary to leverage the technology you want to use as well as provides the foundation/platform to leverage future technology with less effort, risk and cost.

The challenge is that there is no single platform that can be “the” one and only foundation. Despite what any of the vendors of platforms want (to be the one and only vendor), they have at least said they recognized that there will be multiple platforms in all businesses.

Picking the platform can be very challenging:

  1. Very few shipbuilding specific platforms: There are very few shipbuilding specific platforms and therefore we will need to adopt general platforms into shipbuilding. There are various ways we can do that but need to be aware of what might happen if we go down the wrong path again (Highly Customization = Future Obsolescence)
  2. Organization has Multiple Complex Platforms: It can take over a year for a decision to be made on a single platform, never mind a collection of platforms which need to eventually work as one synchronized environment.
  3. Overlap in Capability of Available Platforms: It does not make it easier that each platform is increasing their capabilities and therefore there is a lot of potential overlap of capabilities. Determining “the master” or “source of truth” of “version of truth” can be a difficult internal political battle.
  4. Predicting the future: Each platform has different capabilities and depending on your future business one platform might be better aligned with it. However, this may put you in a position where you are not able to pivot your business as easily.

The other challenge we have with software platforms is that they are not designed for the future yet.

  1. Most Platforms are not Open: Since most platforms arenot really open, itmay put you at risk of vendor Lock-in and proprietary formats. Many are starting to say they are “Open” because it is the thing to say, but most are at most ajar.
  2. Creating a Platform of Platform ecosystem: You can imagine having a platform of platforms within your organization so each platform needs to be able to connect with other platforms. Most current platforms do not provide an intuitive way to connect systems together. Today, many require a lot of custom development which will not be sustainable in the future.
  3. Do not Support all “Hot” technologies: The highly talked about technology today is the digital twin which there is not a single platform which can support what has been marketed. There are portions of the digital twin which can be handled by certain platforms; however, there are still a lot of capabilities and very hard problems that must be overcome before these platforms become capability to handle the full benefit of the digital twin as well as other new technologies.

4: Handling Legacy Data & system

When we plan to make the appropriate changes to our organization we need to also decide how all the current disconnected and siloed information will be leveraged in the future. The decision is difficult because there is a cost of migrating legacy data into the new structured and modern environment you have. In some cases, there is not the information required to link and create the much needed relationships which are a requirement in the new environment. The cost of maintaining the legacy system can be significant as well as be a huge risk to the organization if it runs on specific hardware (mainframe) or software (WinXP) which is no longer supported or available.

Management always initially wants to keep and migrate the data because they see the loss of the information as a huge waste. Also, by not migrating legacy data into the new system that means it is possible contracts which require the use of the old data will take longer in the new environment because it will have to be re-created in the new system. That means reduced profit or opportunities.

Deciding on what is the best strategy for the business requires understanding the short/long term gains vs the short/long term cost. There is no simple answer on what should be done as it will be an overall business value question and there are so many factors in making a sound business decision. However, if the pros and cons are understood a proper decision could be made.

5: Inexperience with Implementation of Modern Technology

Shipbuilding is one of the most complex manufacturing industries without a doubt. The amount of coordination and planning required to build a ship is mind boggling. I have complete respect for all the persons involved in making sure the designs are completed in time, the work breakdown is organized to maximize all the yards many constraints as well as their uncanny ability to deal with issues that arise.

Even though shipbuilders are great at organizing a complex structure in a very complex environment they do not have the skills and experience to implement enterprise systems and technologies in their shipyard. Just to be clear, it is not because it is more complex, it is simply complex in a different way than what they are accustomed to.

This inexperience does lead to some difficulties in implementing these integrated enterprise software solutions. The most common challenge I see is that there is not an appreciation for a short duration milestone strategy with each step providing some value which is often associated to the “Agile Methodology.” Some of the implementation start with the intension of doing Agile but do not.

The majority of the implementations we see are still “Big Bang” implementations. With implementing any aspect of your enterprise architecture there is no need to go down the path which everyone knows they want to avoid.

I am a true Agile believer, advocate, mentor and practitioner of Agile in all aspects of my life. Agile is the fastest and cheapest way (not the only way) to get continuous movement towards your vision with the minimal amount of risk.

Without fulling embracing an agile type of methodology for their implementation of these technologies, the adoption of these technologies will be very slow and we will see “big bang” implementations with only marginal improvement towards what was needed (not wanted).

Closing Remarks

I think the future for shipbuilding is going to be very exciting. There is so much opportunity and technology we will be able to embrace to create some of the worlds most complex structures.

I understand that while the future opportunities are exciting, they are almost certainly further out on the time horizon than we think. Changes are not going to happen overnight and will take a few years until we see some significant changes widely adopted throughout our industry. This is not because the technology is not ready but rather that it takes time for us to incorporate it in a very complex business without significantly effecting our current business.

Forward-looking companies are already well on their journey with the early majority starting their journey as we speak. To get the most efficient results it is important that we understand and do not underestimate our challenges:

  1. Business Transformation is Required and it is Very Hard
  2. Our Current Culture Eats’ Our Strategy
  3. Software Platform are Not Fully Capable, Yet for Shipbuilding
  4. Handling Legacy Data & Systems
  5. Inexperience with Implementation of Modern Technology

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