What 2016 has in Store for Quality Management

Posted by Dan Jacob on Wed, Jan 20, 2016 @ 10:00 AM

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quality_cost_to_profit-2.pngIt’s the start of a new year, and its already shaping up to be an interesting one. The US presidential campaign looks to be outrageous and entertaining, stocks started the year with a nasty hangover, and ranchers turned militant in Oregon. While the outlook for Quality Management isn’t quite as exciting, there are a number of interesting – and positive! - new developments we expect in 2016.

Rapid Adoption of Quality-centered IIoT Pilot Projects

LNS Research has been covering the Industrial Internet of Things (IIoT) for over six quarters, and during this time has identified a clear shift in industry’s interest in IIoT. The chart compares recent feedback from 1733 respondents over the last 6 quarters. It depicts a rapid swing from a disinterested majority in Q3 2014 – 58% either didn’t know about IoT or weren’t planning to invest, to a motivated majority in Q4 2015 with 68% planning to invest or considering investment. A separate LNS survey identified Quality Improvement as the 4th most frequently identified top use case for companies looking to adopt IIoT (23% of 252 respondents).dan_jj.png

The industry is excited about the potential for IIoT, and quality and reliability improvements are some of the core exciting use cases. However, while some organizations are making large investments in IIoT, most are deploying IIoT pilots. So, while there is a possibility of an explosion of IIoT investment in quality projects at the start of 2016, the more likely scenario is a large raft of smaller projects over the next 12-18 months as the early majority dips its toe into the IIoT water. Reinvestment in larger IIoT projects upon successful pilots will result in more sizable investments later in the cycle. Looking for more education on the connection between IIoT and Quality? Start with these papers:

 

Risk Management Gets the Spotlight

Formalized Risk Management is another big shift coming center stage to quality management. While Risk Management has been getting much needed incremental attention for years, the arrival of ISO 9001: 2015 really forced planning for enterprise adoption of a formal risk management process. Companies are beginning to take the hard journey from flexible and often ad hoc risk analysis to enterprise-connected risk management.

This particular journey will be likely be faced with user adoption challenges, as users are conditioned to the ease of use and informality of spreadsheets. However, industry is beginning to kick the crutch of spreadsheets to the side as they search for a solution to lifecycle-wide risk based thinking.

Why 2016? LNS Research identified a sharp jump in plans to adopt formal and standards-based risk management processes, as well as a simultaneous shift in the percentage of companies moving risk management from a bucket of “least critical” quality processes to “most critical.” Again, over the next 12-18 months we expect a significant increase in quality-centered enterprise risk management pilots.

Increasing EQMS Adoption, But not On Premise

Enterprise Quality Management System (EQMS) adoption, planning and budgets have steadily increased over the last several years, showing a strong and sustained trend in increased adoption. However, 2016 stands out as the proud recipient for the largest single year increase in EQMS budgeting, with a jump in companies that allocated budgets for EQMS.

While this indicates a banner year for EQMS deployments, another interesting data point is the growing interest in the SaaS models, both single and multi-tenant. In fact, mind share of on premise declined somewhat.

Our discussions with EQMS vendors and quality leaders bear this out. The low effort and low up-front cost SaaS offerings combined with security and growing capabilities are beginning to tip the scales for new buyers of all sizes, as well as some buyers with existing deployments. We expect to see this trend continue to accelerate over the coming years for most industries. Of course, some industries such as government and defense with their strict data security regulations (ITAR) typically find an internal cloud offering a more desirable approach and would likely not move to a public SaaS/cloud offering.

Rosy Outlook for 2016

Quality management as a whole is poised to make some substantial improvements in 2016, both with improved process support as well as laying the groundwork for future broad-based IIoT deployments. Contrary to the news stories of the day, quality management’s outlook looks positively sunny. May the new year bring you success!

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Tags: Risk Management, Quality Management, IIoT