Digital transformation affects all industries, and manufacturing is no exception. Take Accuride Corporation. CIO Paul Wright says the vehicle components company has moved most of its systems to the cloud, including financials, HR, manufacturing, and productivity. For a mid-market company with limited resources, the cloud makes perfect sense, Wright says.
In a recent conversation, Wright explains how the cloud has allowed his people to focus on the work that really matters. Take a listen:
Listen on SoundCloud: Accuride Shifts Gears to the Cloud
Listen on Apple Podcasts: Accuride Shifts Gears to the Cloud
If you’re more of a reader, below you’ll find the transcript of our conversation, edited for clarity. You can find our other Workday Podcasts here.
Mary Hayes Weier: At the start of this century, inventor and futurist Ray Kurzweil said, “We won’t experience 100 years of progress in the 21st century. It will be more like 20,000 years of progress at today’s rate.” Well here we are, 18 years later, experiencing a breathtaking rate of progress. Within global companies, the person dealing with it most is the chief information officer.
I’m Mary Hayes Weier from Workday. Today on the Workday Podcast, I’m here with Paul Wright, CIO at Accuride Corporation. Headquartered in Evansville, Indiana, Accuride is a leading manufacturer and supplier of wheels and wheel-in components to the commercial vehicle market. Paul is going to talk about a big technology platform decision the company made to move to the cloud and why that move was so important to speed of execution. Welcome, Paul.
Paul Wright: Thanks very much for having me.
Weier: So Accuride decided to move from an on-premise system to the cloud in about 2016. How did you reach that decision?
Wright: Some of it was that our hand was forced. We hadn’t done anything with our HR or payroll systems for about 20 years, and they were coming to end of life. We started looking around for something different. In terms of why we wanted to do cloud versus replacing with another on-premise solution, I guess there are a lot of dimensions that drove us in that direction.
We had been in a mode of digital transformation for a couple of years already. We’d been moving our manufacturing plants to cloud-based systems for a few years. We liked what we got with the software-as-a-service platform. There’s inherent advantages in terms of us not wanting to build out and maintain and constantly recapitalize infrastructure investments.
But probably the bigger element was that with the SaaS solution, we’re always going to get the best new technology. We don’t have to go through horrific upgrade cycles to get there. It also means that as the platform updates, that stuff is just delivered. It’s not necessarily something that we have to buy, and then open a hole in our firewall and let someone come in and reconfigure.
When we first started looking, we had about five or six different vendors come and give us demonstrations. There were some good products there, for sure. While we were doing that, our CFO at the time approached me and said, “Hey, I’d really like us to look at what we can do for our financial systems as well, because we’ve upgraded the tip of the spear with the manufacturing plants. Now we’re going to be upgrading half of our back-office administration functions. What about me?” That narrowed the scope in terms of the vendors that really were going to be capable of delivering something.
Wright: As we went through more demo cycles and spoke to more reference customers, Workday really became the clear choice for us.
Weier: How did your leadership feel about moving financials to the cloud? Was there some trepidation there?
Wright: Well, again, all of the plant financials were already in the cloud. We’d taken that hill before. Security is getting much harder, and people are coming after you in every different direction.
At Accuride, we have a pretty small IT team. For us, it was difficult to keep up with every patch on every system all the time—not just keep up with the patches that are being released, but also get in front of things and understand where a patch is needed. We didn’t have the horsepower to do it.
We didn’t have the experience. We didn’t have the knowledge. We didn’t necessarily think that investing in that was going to be the right thing for us. When you look at a company like Workday, which has a huge team of people all really focused on security—and I’m not speaking out of turn. Workday talks about it as the company should, in that it is one of the first out there getting certified for all of the different data privacy regulations. Workday is getting certified to the international standards associated with how to host a data center. Workday is the one saying, “Hey, this is what we’re doing to keep you safe.”
Because of that, I think it instills a level of confidence that we aren’t just relying on Joe in Evansville to make sure my data is secure. I’ve got a whole team that’s working around the clock to make sure that not only is my data protected, but so is the data of really big companies.
Wright: We’re a mid-market company, and what we’ve found is that as we move forward with the auditors, the Q&A gets much shorter, because they’ll ask me to talk about how I’m doing X or Y in relation to security, and I’ll just pull down those reports from the Workday community and say, “Here. If you’d like anything additional, please contact these people.”
Weier: Yeah. As a medium-enterprise company, I’m sure you’re restricted in resources in information technology. Do you find that it allows you to put those resources toward more strategic work?
Wright: Absolutely. Instead of focusing on patching and updates, now those same people can focus on the deployment of the new technology that just got released to us.
That’s a sea change in difference. Instead of being isolated just to IT, those people now become much more integrated as partners within the business, because the business people have to explain their requirements. Instead of coding that, now it’s a matter of clearly understanding and configuring, which is a different skill set. It’s a lower-code skill set for us. We’ve still got some developers on our team that are doing things, but their focus is not necessarily as much in building new applications anymore. It’s about building integrations and things like that, and saying, “Okay. How do I extend what I’m doing here over to how am I fully integrating with the bank?”
Wright: I was.
Weier: What did you think about all those machine learning capabilities and predictive analytics integrating into products?
Wright: You know, because I’m an old-school manufacturing guy, I thought, “All right, just show me. Show me what you’re going to do.” As a technologist, I think there’s a huge use case for predictive analytics in terms of making the business smarter, because we’re not just doing the foundation, laying the walls, putting the bricks in anymore.
Wright: We don’t want people to have to focus on every transaction—we want people to only focus on the anomalies. And so the biggest thing that I saw—what I got really excited about in the financials part—is about doing away with all of those monotonous point and click activities? We want people to use their brains, right? We hire smart people. The reason we want smart people is because we want them to think. We don’t want them to have to focus on pushing paper. We would much prefer that the system does all of that automatically for us.
Weier: Let’s talk a little bit about that, examples of the cloud as an enabler. It’s been about two years now since you’ve been on the cloud with Workday and some other systems as well.
Wright: With Workday, about six years total in terms of cloud applications.
Weier: What percentage on the cloud would you say that Accuride is at this point for all its systems?
Wright: I’d say about a high 80 percent now. Maybe higher.
Weier: Wow. Very cool.
Wright: What we’ve done is move all of our Microsoft stuff. We’re now in Exchange online. Our Sharepoint’s online. To get to Sharepoint now you have to go through the Workday homepage—and we want people to just go through Workday.
Wright: Yeah, we think it’s a good solution. We moved our help desk system from an on-premise thing to the cloud. All of our manufacturing ERP is in the cloud. Now our HR and financials are in the cloud. Our payroll system is still on-premise, but we’re looking to move it. Our CRM system is in the cloud, as are most of our applications.
Weier: So being an almost 100-percent cloud company, what would you say are some of the biggest surprises, or lessons learned in making that transition that would be helpful to other CIOs?
Wright: When you go to the cloud—and I want to be clear that there’s a difference between going to the cloud versus software-as-a-service–type cloud platforms, right?
Wright: You can take your stuff and just put it somewhere, and it doesn’t fundamentally change how you’re going to work as a business. With a software-as-a-service offering, it does fundamentally change things, because you have to look at your business process. There are things that you’re doing because that’s the way you’ve always done it, but you’re not going to do that anymore. You’re going to look at best-in-class processes that are not just going to be used by you, but are going to be used by—what I believe is—31 million people now on Workday. That’s a ginormous number of people. All of us are contributing to this product through brainstorms and interacting with the product managers about how to make Workday a better system—not just for one company, but for over 2,000 now.
Workday is ahead of us, releasing stuff faster than we can deploy it. I never want that to change, by the way. It’s great, and good for us because we can go to our business users and say, “How about if we do this?” And they can say, “Well, can we do that instead?” And we can say, “Yes, we can start configuring that right now. Are you ready to talk about the process?”
Weier: Yeah. So let’s talk about the pace of change for a moment. In what ways do you find the cloud particularly helpful in keeping up with the pace of change? You talked about going from a public to a private company, and having to adapt to some changes very quickly. Anything to share on that?
Wright: Yes. The big thing for us was going from having a fairly stable organizational structure to one of just a really acquisitive company. Although we’ve only done two acquisitions, we’ve doubled the size of the company in the last 18 months. Instead of operating in four different countries, three of them in North America, I believe we’re now operating in 10. Instead of having 2,000 employees, now we’ve got about 5,000 employees. So how does the cloud help with that?
The answer is, instead of having to go in and build stuff to handle all of those different geographies, we can say, “This is Stefan. Stefan is from Germany.” And when Workday knows Stefan is from Germany, then his card, in terms of the data that’s important for somebody in Germany, is automatically . . . One, you’ve got the fields that you need to understand his national identity the right way. Two, it’s all in German already. How are you doing that by yourself on-premise?
I think that’s huge from a cloud perspective. There are other companies bigger than us that are really pushing for more innovation and we can sort of ride those coattails. It means transformation can happen a lot faster. When we’re looking to have an application start running in a plant in Germany, China, Turkey, or France, I’m not worried about having to build infrastructure in those places.
Weier: Right. That’s a big deal.
Wright: All I’m doing is saying, “Go to this website, please.”
Weier: Yeah, that’s quite a sea change.
Wright: Yeah, the cloud is a huge enabler for acquisitions—for change as a company.
Weier: What about compliance? I don’t know if you have even more compliance and regulation issues as a manufacturer than perhaps in some other industries, but in terms of getting the updates with financial management, has that been helpful at all?
Wright: I think so. We’re not a service industry, where there was a massive, massive change in the accounting rules.
We weren’t affected by that one. Certainly all this change in the landscape around data privacy with the GDPR, and now, for us, the Russian Data Privacy Act, is a really big deal to know that I can go on Workday Community, search GDPR, and get a bunch of presentations on best practices on how to navigate it. I get a link to do a contract directly with Workday to say that for my data, it will be protected according to the GDPR standards. Workday has built-in features that allow you to do all the data purging, where the right to be forgotten can really happen. If you’re storing someone’s data in that nest of your own applications, how do you make sure you follow the rules?
Weier: Right. Yeah. Accuride is based in the Midwest. You’re a manufacturing company. I’m from the Midwest as well. What do you think of the perception of the cloud? Do you feel like the middle of the country is shifting more and understanding the cloud advantages? I don’t mean to be criticizing my own region, but—
Wright: No—I think that’s a good question. Certainly manufacturing companies wouldn’t necessarily want to change the way that you do IT as a core value, right? They’re not looking to do the same kind of things that a financial services company would be doing, per se.
But with that, I don’t know that the “not cloud” argument is even a thing anymore, purely because of how many websites and apps everyone is using every day.
Somebody can’t tell me that they’re not okay with the cloud and then tweet that they’re not okay with the cloud and then tell me on Facebook that they’re not okay in the cloud. That’s just nonsense, right?
Wright: By the way, I’m pretty sure that Amazon’s building a whole bunch of distribution centers all around the Midwest because people are buying things there. They’re going to a website to conduct their personal business.
Why is this different? I’ll be honest—I don’t know.
Weier: It could be more of a change management issue perhaps.
Wright: I think so. I think that when people have a really heavy infrastructure that they’ve built, and they’re really proud of what they’ve built, they see that as a differentiator, right? Those are difficult people to move.
But if you have a little bit of an open mind-set—for example, do I want to try and do it myself, or would I like to use the same stuff they’re using at Target, Walmart, and Amazon. Right?
Weier: I’ll finish up by asking you to share the most important thing you’ve learned about being a CIO during a time of such rapid technological progress. Any advice?
Wright: Roll with the punches. Keep your eyes open. Keep your ears open. Talk to more people. It is absolutely critical that CIOs have a grasp on new technology because the consumers of what companies are currently offering are significantly more educated in technology than they used to be. People use Amazon and Facebook to book their flights. You’re dealing with digital natives.
You cannot be left behind so you’ve got to look at ways to optimize what you’re doing for your business. It’s not about being good at IT.
For example, let’s say you want to be a manufacturing company. Focus on what the core of your organization is and how to add technology to enhance that core. That’s what’s important and what adds value to a company. I think that any CIO should be focused on that.
Weier: Paul, thank you so much for joining us on the Workday Podcast and sharing your ideas and experiences as a CIO in today’s fast-changing world.
Wright: Thanks very much for having me. I hope it was vaguely useful and a little bit helpful.
Weier: It was awesome to hear your views. This is Mary Hayes Weier from Workday. Thanks for listening.