How to make the business case for modernization

Technology modernization can be a significant investment, and cost estimates can bring upgrade plans to a screeching halt. However, the rewards can be exponential. Convincing senior management of the value can turn the red light to green for an upgrade of existing automation technology, making it more than worth the initial investment.

“As stewards of deployed capital, we have a responsibility to make sure it’s providing value to the organization,” explained Lachlan Stokes (pictured), secure digital operations sales executive—consumer packaged goods, Rockwell Automation. “Modernization matters,” he emphasized to the audience during the Consumer Packaged Goods Viewpoint presentation, “From legacy to leadership—the business case for advancing food and beverage operations,” which he gave, along with co-workers Lance Fountaine, industry solution consultant, and Jerry Plessing, principal solution architect, during Automation Fair this week in Chicago.

Stokes reminded the audience of Southwest Airlines’ catastrophic service outage in 2022, which began just days before Christmas. Inclement weather put stress on what Stokes identified as the airline’s outdated crew-scheduling software. “Almost a billion dollars’ worth of business was lost,” he said. “Why didn’t they act sooner?”

Stokes advised establishing a roadmap for technology modernization in three steps: assess, plan and execute. “Understand what’s out there, your installed base. Look at the performance risk and prioritize projects. And, when you execute, bring continuous improvement and operations along,” he said.

The roadmap also must be designed to be updated, explained Fountaine. “This is a journey, but a journey that will never be done,” he said. “There are always next steps. I’ve seen too many organizations approach this one project at a time. It’s a program.”

It’s not what it costs, it’s what it pays

“Accumulation of technical debt increases the cost of change,” explained Stokes. “The business case is not tied to value pillars. Investments in upgrades to back-office systems are continually deferred.”

Constant challenges exist for equipment modernization, namely upper-management buy-in and the evolving mindset to secure organizational support, noted Fountaine. “We talk about Industry 4.0 and the Factory of the Future, but what’s it going to take to get there? Why don’t we modernize and make those investments in technology?” he asked.

Fountaine recommended an evolving approach to modernization that addresses risk, priorities and return on investment (ROI). Risk aversion is an obstacle to change in any organization, but even more important is how that risk is perceived. Cybersecurity, equipment supportability and device failure, as well as replacement, comprise risk that can be mitigated with modernization.

Digital priorities are often competing for the same funding. The need for more data and analytics by using tools such as artificial intelligence (AI), often means reducing investments in advanced measurement, control applications or robotics.

Constrained capital budgets mean technology-upgrade approvals require value demonstration. “It’s hard to think of replacing what we have as value,” said Fountaine, who cited Rockwell Automation’s State of Smart Manufacturing Report 2025: CPG Edition, which reported 70% of value driven through business transformation is enabled by technology.

Technology upgrades used to be reactive, the result of ongoing or recent pain due to obsolescence, or perhaps in reaction to a cybersecurity risk. As manufacturers move to a more proactive approach, modernization is identified as part of digital inventory or obsolescence planning. Vulnerabilities are assessed as part of active inventory and cybersecurity scanning. The next step is to become strategic by tying modernization to objectives and supporting a broader transformation roadmap to address labor, for example.

The workforce and skills shortages have been well-documented. “It’s a shortage of competencies, not just people,” stressed Stokes. “They’re working with new technologies, using new tools and data.”

Operational complexity also has increased. “Supply chains are integrated,” said Stokes, who noted U.S. food prices rose 24% from 2020 to 2024 due to inflationary cost pressures. This has translated into higher-than-expected supply-chain losses and private-label store brands outperforming national brands.

“Manufacturing productivity is stagnant,” noted Stokes. “We aren’t producing more with less. We’re producing less with less.” This has sparked the potential of moving from rules-based automation to observation- and learning-based autonomy. “How do we shrink the OODA Loop—observe, orient, decide and act—to support these new requirements? How do we architect continuous learning into the systems we build? How is your program supporting the goal of smart manufacturing?”

From legacy to leadership

“There was nothing wrong with legacy thinking,” stressed Fountaine. “It’s focused on risk. It’s not just cybersecurity and obsolescence risk.” Finding workers familiar with legacy technology becomes more difficult as automation outlasts not only the individuals who created or implemented it, but those who were trained to operate and maintain it. “If I have a VAX minicomputer, can I find someone to support it?” asked Fountaine.

Complexity is the enemy of supportability, said Fountaine. “Complexity is difficult to manage,” he explained. “How do I become more agile with my technology environments? How do I simplify connectivity? How do I leverage data as an asset? Data is a critical component of next-generation capabilities. There’s no going back. It’s changing. There is no Easy button at Staples for AI.”

Cybersecurity risks are real, stressed Fountaine. “It’s becoming a greater risk every day,” he said. “It could be intentional or unintentional. But as technology evolves, it must be supported, and we must maintain cybersecurity.”

Vendor-agnostic connectivity is yet another consideration for technology modernization projects. “We know you have diverse technologies,” noted Fountaine. “We’ve got to be able to connect with other vendors. That is critical to the future. It’s a core part of our strategy. You need to ask all your partners about their ability to be agnostic.”

Modernization is about the balancing act between risk, value and cost, said Fountaine. “A big part is the total cost of ownership,” he explained. “Cost goes well beyond just project cost.” Value should be tallied by including all related impact, such as improved operational efficiency, the ability to attract new talent because of the technological work environment, contributions to sustainability efforts and logistical supply-chain benefits.

Value framework

Pivoting from legacy thinking to what he called “leadership” thinking, explained Stokes, involves a mindset change from risk reduction to value building, which can be pitched to management using Rockwell Automation’s two-part modernization framework.

Identifying and quantifying a value framework is a two-part process, explained Plessing. Organizational impact and technology accelerators comprise that framework. “People say, ‘I’m scared to make that big change. How do I gain operational efficiency? How do we make the changes?’ The key to getting your modernization project approved and off the ground is proving value across both sides of the framework,” said Plessing.

On the organizational side, it focuses on continuous improvement of risk, cost, operational efficiency, workforce enablement, sustainability and supply chain. It could be empowering operators to do more of their own troubleshooting or enhancing visibility of raw materials.

The other side is the technology accelerator, which includes attributes and capabilities that offer long-term value in areas such as integration, analytics, advanced control, scalability and cybersecurity. “Rockwell is doing a lot of things to accelerate the technology integration,” explained Plessing. “Without data, I can’t do anything with AI. I need a data-ready control platform.”

Plessing demonstrated the modernization value framework for drives, motor control centers and disparate technology systems. When drives need replacement, the decision becomes whether to choose a drive-in-kind or to upgrade to a drive that gives the analytics team more information.

Replacement with a modernized drive adds organizational-impact value. The user gains contextualized data that helps to improve line efficiency, simplifies training needs and creates flexibility with staffing and gains easier access to standardized sustainability data.

The technology accelerators are many. Multiple aspects of the line can be controlled with the same controller. Contextualized data makes it easier to share across the organization. Advanced control options are available at the controller, edge, plant and enterprise levels. And the modularity allows scalability up or down, as needed.

A modernized motor control center leverages data to improve production efficiency and reduce downtime, and it leverages data to minimize energy consumption and waste. It can integrate both process control and power to simplify system design, operations and maintenance, provide contextualized data, offer improved control of real-time motor startup to avoid higher electricity rates and optimize for footprint constraints, thanks to modularity.

With disparate technology systems, modernization means gaining contextualized data to improve line efficiency, simplified training needs and staffing flexibility, easier access to standardized sustainability data and simplified system integration with external parties, not to mention the modularity, advanced control, analytics and integration that come on the technology accelerator side.