System of Record vs. System of Engagement – What’s the Difference?

New classes of solutions are emerging all the time in manufacturing.

Recently, systems of engagement have popped up as a method for augmenting traditional systems of record.

In this post, we’ll look at how each of these “systems” interacts, and why it matters for modern operations.

Abandon Rigid, Traditional Manufacturing Systems & Download our Comprehensive Guide to Next-Gen MES →

A system of record is an information system that serves as a shared reference point for a business. They act as an authoritative resource, protecting against the inconsistencies that arise when data is created, handled, and processed by multiple individuals or business units.

In manufacturing, the most common systems of record are enterprise resource planning (ERP) suites, manufacturing execution systems (MES), and customer relationship management (CRM) tools.

Each helps by consolidating information impacted by many users and processes throughout the course of business. They provide a single source of truth for operations.

By definition, all systems of record are:

• Complete (account for all relevant processes and programs)
• Accurate (reflect operations as they are and follow internal or regulatory best practices)
• Timely (represent the most up-to-date snapshot of the business)
• Consistent (enforce a consistent data model)

Systems of record are important for aligning and managing complex businesses. They aren’t designed, however, for the frontline workforce.

This is where systems of engagement come in. Systems of engagement are the programs and applications that workers interact with in their daily work lives.

In manufacturing, these could include a variety of process applications. From digital audits to materials and inventory systems, to digital quality or work instruction applications–all are focused on concrete operational issues and designed for end-users.

Usually, systems of engagement are integrated with systems of record, creating a seamless link between shop floor processes and back-end accounting.

The difference between the two systems ultimately boils down to the following:

• Systems of record are centralized, shared datastores made designed to be managed by IT teams
• Systems of engagement are decentralized, vary based on the needs of a given business unit, and are built for frontline team

Why the distinction matters

The distinction matters because the two types of systems are now intertwined in modern operational environments.

Increasingly, both systems have an important role to play.

For manufacturers, ERPs are an essential tool for managing the business. For many manufacturers, MES are a fact of life. They’re essential for planning, orchestrating, and analyzing production.

Often, leadership doesn’t want these systems accessible to end-users in order to prevent data discrepancies (small mistakes in data could have huge consequences).

Further, these systems can be enormously complicated to work with. In both cases, they consist of many complex, interlocking modules (akin to the “blind men and elephant parable). While they may represent a source of truth for the business, that doesn’t mean that the data they hold is easily accessible. Or that it’s in the right format to be useful to end-users.

So in manufacturing, you often see organizations with a top-end, custom MES still taking data by hand. Or doing process analyses in excel. It’s often easier to fall back on analog tools than to use data stored in a system of record.

Systems of engagement give workers significantly more control over the processes that matter to them. Because they’re connected directly to those processes, they make it significantly easier to collect relevant data and generate insights quickly.

Crucially, they can integrate with a system of record. This way important process data is passed to the system of record while still remaining immediately accessible to those who need it.

Here are some of the reasons manufacturers should consider augmenting their systems of record with a system of engagement

Fewer silos

While systems of record centralize data, that doesn’t mean everyone is using the same data sources. Because systems of record can be hard to work with, departments often develop their own ad hoc means of taking and analyzing data. This can result in data silos, where each department is working from their own “source of truth.”

Fewer discrepancies

One result of silos is discrepancies. If frontline teams are taking data by hand, there are naturally going to be variations between the manual data and the SoR data. This can lead to costly mistakes and corrections down the line.

Better user experience

Systems of engagement are ultimately about engaging workers–about improving their experience. They’re designed for the tasks they tackle.

Less money spent on your SoR

Many organizations wind up spending huge sums of money customizing their systems of record over time. Supplementing your SoR with an SoE can be a cost-effective way to get the data and functionality you need.

The point is drawing the distinction between systems of record and systems of engagement is to help you balance tension. On the one hand, there’s a need for a ground-truth overview of the business. On the other, there’s a need for tools that help frontline workers work better.

In manufacturing, we’ve most recently seen this in the IIoT Platform vs. MES debate (Answer? Probably both!).

With this distinction, you should be better able to assess what will bring the most efficiency to your team.