How Honeywell Uses Digital Transformation to Manage Inflation

Manufacturers Increase Revenue

It seems everybody is rushing to implement digital transformation programs and corporations are seeing the benefits.

Overview

A recent survey by analysts International Data Corporation (IDC), for example, found that organizations that have undergone digital transformation are twice as likely to report increased market share, and that by 2026, global digital transformation spending is forecast to reach $3.4 trillion.

A change transformation road is not without its bumps and potholes, however. There are several key things to bear in mind as you set off on your journey. We’re also, as a global economy, facing incredibly uncertain times, which makes managing a corporate change program even trickier (but also affords the chance to differentiate and excel).

Big, global challenges

“If you look at the external environment that we are operating in, most leaders would tell you that it’s the most challenging, if not, at least one of the most challenging environments they’ve had to operate in,” explains Jeff Hopkins, Honeywell’s Global Program Management Office leader responsible for their end-to-end project solutions processes.

“Starting with the pandemic, and the impact of the pandemic, flowing right from that crisis into global supply chain shortages, into inflation, the war in Ukraine with Russia, where you’ve got companies that need to get out of their operations in Russia, who need to protect and care for their employees in that area. What’s that going to mean to be able to operate a business? What’s that going to mean for our people? It’s a very, very challenging environment.

“It’s about then recognizing that whenever there’s a big disruption like that, it also creates the opportunity for innovation. When the weather is rough and the water choppy, the best captain and crew tend to prevail in a race. So, to raise the bar on our performance as a business, not just to weather the storm, but then outpace our competition, is a great opportunity. A lot of Honeywell’s efforts are focused there: ‘How do we standardize the way that we’re doing the work?’ By deploying an enterprise ecosystem to manage our projects.”

Selecting the right partner

Honeywell selected Cora as a software partner for their digital transformation program. Cora’s platform acts as the hub for managing projects that can range from a couple of million dollars for upgrades that are done over a weekend to $100 million projects that might last two years. There’s huge complexity involved across their corporate ecosystem.

One of their divisions, for example, Honeywell Building Solutions, does integrated systems for buildings, security and fire etc. In their Utilities, Performance, Technology organization, who operate in the oil and gas industry, they have a very diverse range of projects. Its process solutions businesses also has a broad range of project types, across various continents. They also have a Smart Energy organization. This entails a diverse customer base, a diverse business model, diverse geographies, but all unified around a vision to optimize the performance of those businesses.

Software is key, but it must go hand in hand with people and processes. A platform like Cora cannot function effectively without the right people, buy in from senior management – and in particular an influential project sponsor – and intelligent, flexible business processes. Your implementation has to be thought-through. Critically, you need a solution that is configurable to your business processes, and you must have joined-up thinking.

Single view of the truth

“Many work processes in big companies have this handed-on process: I pass it on from here to here to here to here,” says Hopkins. “I joke that this is the way that you build a World War Two spy network. People know who they got information from and who they pass information to, but it would be far too dangerous for anybody to understand the whole process. That way of working is outdated. We need to work more concurrently. To work more concurrently, you have to have the same picture of what’s going on.

“Getting things out of email and spreadsheet and into an enterprise system like Cora allows people to work more concurrently. In my world, we’ll have a ‘four in the box’: a project engineer; a project controls person; sometimes a dedicated scheduler for big projects; and a program management leader – all working together ‘four in the box’ around the common view of what’s going on in the project, making real-time decisions on how they’re going to optimize that project, making real-time decisions to identify and start to mitigate and retire risk. Moving to an enterprise tool, and getting out of email and spreadsheets, is really the future of work.”

A solution like Cora provides a helicopter view of your organization’s project data. It provides that critical “single version of the truth” – it enables your project managers to drill down on project information at a glance to gain visibility of your projects, your programs and more strategically at a portfolio level. They can then pull together reports in seconds rather than days, allowing them to focus instead on value-added work and insight.

Greater visibility

“One of the things where I’m seeing a lot of value from with Cora is being able to track all of our change orders that we have with our customers in one place,” says Hopkins.

“On a daily basis, I can look at all of our projects and I can roll that up as a portfolio and I can ask: ‘Am I am I seeing more opportunities than risk?’ ‘Can I see my profitability improving?’ ‘Or am I seeing more risk that’s a threat to my profitability?’ ‘Which ones do I need to go mitigate?’ I can sort them. I can look at which are the largest risks. I can look at the ones that have been added in the past week.

“So as we’re doing a weekly touch on the portfolio, I don’t have to go email 100 different people to go get Excel spreadsheets sent to me that I need to aggregate. To do that intelligence, I can just log into Cora and then open up that dashboard and get that intelligence about the portfolio and then go make decisions around: ‘Hey I want to go see this project on Friday in our review meeting’ or ‘I need to go talk to this PM and understand what’s going on about this risk.’ You see the power of that data.”

In the latest episode of @PMPPodcast Honeywell’s Global Program Management Office Leader Jeff Hopkins shares five tips to accelerate #DigitalTransformation. Stream or download at https://t.co/z996V3MykC or via your podcast app of choice pic.twitter.com/BZmjsGNlW8

— Cora Systems – The Power of Perspective (@corasystems) November 14, 2022

From a senior management’s perspective, you’re getting better bang for your buck because now staff is delivering value on data. Also, senior managers are paid to make decisions. They will make decisions in the absence of good data. Those decisions will be either lucky or bad, but if they have good data they can make good decisions, and the organisation will thrive, even in a world that is wrestling with alarming rates of inflation.

“One of the things Honeywell has done very, very well is managing pricing,” adds Hopkins. “Because we invested in a digital tool with Cora to help us manage pricing, we’ve been better than many of our competitors in managing inflation, as we can look at optimizing the performance of projects, through traditional earned value metrics.”

Learn more

Listen to Honeywell’s Jeff Hopkins’ full podcast interview: “5 Tips To Accelerate Digital Transformation

Source

1“IDC Spending Guide Sees Worldwide Digital Transformation Investments Reaching $3.4 Trillion in 2026”International Data Corporation (IDC), October 2022

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