Last year I got on a Star Trek kick, writing a lot about next generation ERP. In case by some small chance you missed it, you can catch up on the 4-part series here. But if you didn’t (miss it) you might recall one of the four ways to distinguish an ERP as “next generation” was to provide new ways of engaging with ERP. The consumerization of IT and the introduction into the workforce of a new generation that never knew life before the Internet have combined to make stumbling through hierarchical menus unacceptable as the sole means of engaging with ERP.
Plex Systems has really taken this element of next generation ERP to heart, blending a deep understanding of manufacturing with an intimate relationship with its customers to deliver new ways of engaging with the Plex Manufacturing Cloud (ERP). While Plex doesn’t have the largest installed base (it has about 400 customers), I have never encountered a more engaged community. This level of engagement is a direct result of its unique approach to product development, which delivers more of what customers want, exactly the way they want it. So is it any surprise more employees are directly engaged with the product when running Plex?
Our 2014 ERP Solution Study found on average 52% of employees in manufacturing companies use ERP, not including those that only have occasional access through self service functions like paid time off requests, benefit administration, purchase requisition, etc. Overall this percentage isn’t bad, and represents significant progress over the past few years. Yet the average percentage of employees using ERP increases to 63% at companies running any ERP solution deployed as software as a service (SaaS). I believe this is directly linked to the access any time, anywhere nature of SaaS. But this percentage jumps to a whopping 76% at companies running the Plex Manufacturing Cloud. Very impressive and a clear indication that Plex has cracked the code, so to speak, in terms of providing new ways to engage with ERP.
This week I had the opportunity to experience this first hand. Along with Frank Scavo (@fscavo), Dennis Howlett (@dahowlett) and Vinnie Mirchandani (@dealarchitect), I spent a day with the Plex executives in their offices in Troy, MI. We were privileged to get a preview of some of the projects they are working on to be showcased in June at PowerPlex, and I think customers will be pleased. But a highlight of the day was an interactive demo of a manufacturing process that took us from the receipt of material through to shipping of a finished product. This was particularly interesting to me for a number of reasons:
- I “grew up” (professionally) in manufacturing, so for me, it was like going home.
- I used to do demos for a living. I spent about 10 years in pre-sales from the mid 80’s to the mid 90’s. Although it was quite a long time ago, I still remember what is involved. Back in the day, before the Internet, before web-based access, before solutions were as robust and flexible as they are today, my best demos were the ones where my hands hardly touched the keyboard. I got very, very good at talking a prospect through a process. This was nothing like that. Although there wasn’t even a keyboard in sight.
- I got to actually participate … And yet, while I never touched a keyboard, that doesn’t mean I didn’t touch, feel or see the software in action.
No, we didn’t use a keyboard. But we did use scanners and sensors, and yes, there was even a blue button that you might call the “easy button.” Plex had a badge for each of us as employees of a fictitious company called Edge. We scanned our badges to “clock in” and were assigned to work centers and tasked to go make key fobs like the ones we all carry to open our car doors.
We received material (resin) by scanning the label attached by the vendor and we produced a label to attach to the bin where we were directed to put it. We then scanned it again to send it to be injection molded. OK, this part wasn’t really “real.” But when Dennis arrived at the work center the system told him he wasn’t qualified to work there. And the light curtain seemed real enough when it dinged Vinnie for scooping out several molded parts instead of one at a time. Those molded parts were then delivered to the next work center where Frank struggled with some decidedly low-tech assembly and I excelled. (What does that say about me?) And when we had collectively assembled all the parts, the Plex supervisor (aka demo guy) pressed a blue button to signal all were complete and a shipping label was automatically printed. Someone from the group then hit the button again but that just printed a label telling us we couldn’t possibly have made more because no more components had arrived to be assembled.
The demo concluded with the shipment of product and some back office investigation of potentially contaminated material. This involved some backward and forward lot traceability, which the Plex Manufacturing Cloud handles quite well in terms of requirements of the automotive industry and some other sectors. But look for this aspect of the product to be significantly enhanced in the future.
Also look for Plex’s approach to corporate and product strategy to evolve. Some of the changes will be subtle, some not so much. Plex has been quite well known among its close followers as a company that has uniquely leveraged customer-driven development. This has been unique in two ways. First, the lion’s share of innovation came from customer-driven enhancements and customer-driven also means customer funded. So a customer would pay Plex Systems to enhance the product and other customers would benefit. This was a smart move for an early-stage ERP company in “boot strap” mode.
The second point of differentiation comes from the speed of development. Plex first started delivering ERP in a SaaS model in 2001, not because the company wanted to be a pioneer in SaaS, but because it was already a pioneer in rapid application development (RAD). A SaaS model was simply the only way it could deliver product as quickly as it could develop it. Back a few years ago, as the development team was demonstrating a new feature they were developing for a large customer, I was struck with a rather unique thought. In the time it would have taken your typical development team to tell you why they couldn’t do this, the Plex team had delivered the proto-type.
While this approach has served the company well, it does limit growth potential outside of the markets in which it is already successful. Letting customers guide product direction has many benefits, including an engaged installed base, and a more robust solution to meet the needs of its target market. But significant growth will likely require Plex to expand its target markets. To really grow significantly, Plex will have to take the reins and determine for itself where it needs to take the product. That means less customer-directed enhancements and more Plex-directed (and funded) innovation.
Now is definitely the time for Plex to make this next step. The product has reached a level of maturity that makes it very competitive in manufacturing, which is where Plex intends to stay. So for the markets where it already plays, there are fewer, if any gaps to fill. And with its acquisition by global private equity firm Francisco Partners in June 2012, followed by a $30 million strategic investment by global venture capital and growth equity firm Accel Partners, there is certainly less need to boot strap. But the expectations for growth have also been amplified and accelerated, and there has been a changing of the guard to reflect this. CEO Jason Blessing has spent the past year assembling a strong management team.
But in a category where the market leaders have tens of thousands of customers, Plex has a long way to go before it can claim the mind share it needs to be recognized as a leader. It has taken its first steps in that journey with a well-defined corporate strategy, supported by a strong technology and product road maps. But it also needs to increase its brand awareness and its marketing presence. If you have been following me over the past several years you have probably already heard of Plex. But obviously, a lot of folks haven’t and many of its competitors underestimate the company and the solution, assuming it can’t compete.
Well, you know what they say about people that assume.