Cloud

Plex Smart Manufacturing Platform

                                                                                    May 2020

Headache Relief in Times of Crisis

Manufacturers today face extraordinary challenges as the world is plunged into an unprecedented crisis. Even as we see efforts to recover, everyone was and is affected, though not necessarily in the same way. Some industries were completely shut down while others (think software and professional services) could close offices and still remain at least somewhat productive. Manufacturing lies at both ends of the spectrum. Obviously you can’t make industrial or consumer products from home – at least not at scale. But within the realm of manufacturing, we see a widely diverse impact of the COVID-19 pandemic, depending on what is being manufactured. Cloud computing and advanced technology that supports connectivity, collaboration, automation and agility have eased the burden for some, while others struggle (still) amidst shelter-in-place orders that caught many flat-footed.

Those companies operating on the Plex Smart Manufacturing Platform are among the more fortunate, whether they are manufacturing products deemed “essential” or not. Of course no piece of software can fully address the crisis of needing to completely shut down production. But even those businesses still have cash to collect and customers to support. As administrative and support personnel were locked out of their offices, Plex’s native Software as a Service (SaaS) deployments allowed employees to start working from home immediately. And as many manufacturers have had to pivot their businesses, efforts from Plex over the past several years to provide automation, collaboration capabilities and an added level of agility are all paying off.

For anyone who still questioned the value of cloud, SaaS and digital transformation at the beginning of 2020, the words of Plex Systems CEO, Bill Berutti, should ring true. “This crisis is shining a whole new light on the power of technology and the power of smart manufacturing, to make us more agile in times of crisis, to allow us to adapt.” Let’s take a look at a few of the ways Plex’s solution provides some relief from the headaches that come along with this crisis.

SaaS Proves its Value

Let’s start with the obvious. The capability to access anytime, from anywhere is inherent in software solutions that are accessed via the cloud and delivered as a service. Mint Jutras has been extolling the benefits of cloud computing and software as a service (SaaS) for many years now, but in spite of all the hype associated with cloud and SaaS, we still see evidence that many don’t fully understand the difference between the two or the benefits SaaS can bring. Whether you run a solution on your own premises or in a private or public cloud, the ability to access anytime, from anywhere is a significant advantage and web-enablement opens the door for the kind of connectivity you need as workers work from home. The ability to connect is critical, but how you connect is equally important. This issue surfaces when suddenly office workers became remote, work-from-home workers.

One of Plex’s customers, Accuride, provides the perfect example. Accuride primarily makes steel and aluminum wheels for the heavy trucking industry. As a global company that made a recent acquisition in Europe, Accuride runs the Plex Smart Manufacturing Platform in some of its divisions, but not all. While workers in the locations using Plex were able to start working from home almost immediately, it took several days of frantic work to support remote workers where solutions were still on premise. The recently acquired division in Germany is still running an SAP solution on premise. It needed to upgrade from 100 VPN connections to support 250 newly remote users very quickly – not an easy task. This only served to validate Accuride’s strategy to move to the cloud and SaaS.

Trojan Battery is another example. A longstanding Plex customer, it completed its shift to SaaS at the end of 2018. It not only runs Plex, but also Dropbox, RingCentral, Workday and Salesforce. But the company was subsequently acquired by C&D Technologies, which still uses on-premise solutions. While Trojan Battery employees were able to take their laptops and mobile devices or just sit down at their home computers and have full and immediate access to the same data and systems they had in their offices, those from C&D Technologies that were still using on-premise applications had a much different experience. They needed access through a VPN, which proved to be a significant pain point, especially for those employees who had never before been issued a laptop (having no need for one). As IT Director Matt Irey points out, “We can’t open our corporate network up to unsecured machines, so they’ve got to be using company equipment.”

This also raised the issue of network performance. Mr. Irey goes on to say, “There’s limited bandwidth — guaranteed Plex, Workday, Dropbox, have a heck of a lot more bandwidth than I do going into my location.”

Plex was an early pioneer of SaaS. It has offered its solution exclusively as a multi-tenant SaaS solution since 2001, long before cloud and SaaS were even part of the vocabulary of the typical manufacturer. Back then most manufacturers weren’t even knowingly and willingly considering SaaS. And so, for many years, the company was successful in spite of, rather than because of its pioneering efforts in SaaS. The key to this success lies in offering a more complete solution for manufacturing, stretching beyond the typical boundaries of Enterprise Resource Planning (ERP).

The 4 Pillars of Smart Manufacturing

This has led it to its current offering, the Plex Smart Manufacturing Platform, a rather unique combination of ERP, Manufacturing Execution (MES), Manufacturing Operations Management (MOM), supply chain management, industrial Internet of Things (IIoT) and analytics.

What makes the platform a “Smart” platform is data, often described as the “new oil” or the most valuable resource of today. Plex recognizes that the four pillars of a Smart Manufacturing Platform are:

  • to connect and integrate to data sources (including machine data)
  • to automate (processes and data collection)
  • to track (and trace)
  • and analyze that data

In addition, the system, along with the data, must also be available, reliable, scalable, secure and agile. Over the years Plex has excelled in areas like availability and reliability. Its service level agreement (SLA) promises 99.99% availability and it has delivered 99.996% availability over the last four years, with an average of just 22 minutes of unplanned downtime each year. With those statistics on the books, along with an impressive track record of security, last year it decided to focus more heavily on agility.

The Increased Need for Agility

The need for agility has been on the rise for the past several years. We live in disruptive times.

Figure 1: How much risk do you face in your industry being disrupted?

Source: Mint Jutras 2018 Enterprise Solution Study

Back in 2018, the Mint Jutras Enterprise Solution Study found 89% of manufacturers believed they faced some level of risk in their businesses and/or industries being disrupted by new innovative products, new ways of selling or pricing existing products or services, entirely new business models, or some combination of all of the above. And then of course there were (and still are) the more traditional disruptive factors like expansion and growth, organizational restructuring and regulatory changes, just to name a few. And now… a global pandemic.

While different industries and individual companies face an incredibly diverse range of challenges, there is one constant today, and that is an element of uncertainty. No one really knows what the “new normal” will be. Some Plex customers have already had to pivot their businesses very quickly.

As noted earlier, this global crisis has impacted different industries in very different ways. While some making products that are not deemed “essential” have been forced to close, others are struggling to keep up with higher demand. Select food, beverage and personal care products are experiencing a boost in demand. Manufacturers of medical supplies and equipment (think ventilators and face masks) are facing increased demand that can far exceed capacity. Others making industrial or non-essential consumer products are forced to re-tool and ramp up production for new and different products. We see hair care manufacturers making hand sanitizer and automotive suppliers making ventilators or personal protective equipment (PPE).

Each option brings its own set of challenges, often requiring new supply sources and processes that include shop floor redesign or limiting capacity to create social distancing. Some are responding quickly, but many are not, as evidenced by shortages of staples like toilet paper, disinfectants, flour and other necessities. We’ve seen evidence of brittle supply chains and manufacturers that remain rigid and inflexible. While enterprise software solutions can’t (all by themselves) overcome all these hurdles, they certainly can contribute to the pain or ease the burden as innovative companies undergo a paradigm shift.

One Less thing to Worry About in Shifting Gears

Creative Foam, another Plex customer, is one manufacturer that has quickly pivoted its business. The company turned 50 years old this year and specializes in foams, nonwovens and adhesives in industries that include transportation and healthcare. Creative Foam engineers seek to create products that are quieter, stronger and lighter.

But in the wake of the crisis, the company was able to quickly shift gears. Tareq Falah, Vice President of Information Technology and Information Systems tells us, “Nobody had a crystal ball. No one could have predicted anything that is going on now during this COVID crisis – not when, not who, not how. Before, we had always asked ourselves, ‘What can we do to win business?’ But in response to this crisis, we went through a paradigm shift. Now we ask, ‘What else can we do to help?’”

Essentially Tareq was talking about helping the front-line workers in the field of medicine. They began with PPE, face shields to be more precise. This meant sourcing new materials, coming up with an initial design and then refining that design. And throughout this pivot, office workers went home to work. While there were many issues to resolve like getting people laptops and rerouting phones, according to Tareq, “We didn’t have to worry about Plex. Support of our business has been phenomenal.”

Another success story in responding to this global crisis is Olde Thompson. Founded in 1944, the company started out manufacturing houseware products, including salt and pepper mills. Today 80% of its business is in the powders that might go into the original products, including salt, pepper and a wide array of spices. While other businesses have slowed or stopped production, Olde Thompson has doubled its monthly output in response to increased demand.

Plex’s inventory management capabilities and its supply chain planning tool were key to Olde Thompson’s ability to respond to this spike in demand while its competitors simply could not react as quickly. When India shut down all spice manufacturing, Olde Thompson was able to locate and engage with other suppliers. This opened the door to acquiring three new customers. Being able to quickly bring on new customers using Plex’s new Smart EDI, a more scalable and flexible approach to onboarding new customers, meant this new business was not just a short-term blip, but the beginning of long-term relationships with three new customers.

But the real key to winning this new business was in Olde Thompson’s ability to ramp up production quickly. And the key to that was integration – pulling data out of machinery and automating machine setups using data within Plex. Process improvement is a key focus looking forward and Olde Thompson will be relying on Plex to provide visibility to their yields and support continuous improvement and long-term growth.

Speaking of Supply Chain Planning…

Plex also recently made another announcement that will assist customers in reducing the risk associated with market volatility, a subject that can strike fear in the hearts of many manufacturers today. On May 14,2020 it announced the release of the Plex Market Forecast Manager, now part of the Plex Supply Chain Planning Suite. Creating and maintaining a viable forecast has always been hard, but the uncertainty introduced with the COVID-19 makes it even more difficult.

According to Plex:

“Plex Market Forecast Manager enables manufacturers to integrate internal and external data points alongside demand plans to drive more accurate inventory decisions, gain market share, and evaluate and scale the supply chain. The initial release will provide automated access to IHS Markit’s Light Vehicle Forecast, helping automotive manufacturers form more accurate and timely forecasts. IHS Markit is a world leader in critical information, analytics, and solutions for the major industries and markets that drive economies worldwide.”

While the initial release of this new module specifically targets the automotive industry, perhaps Olde Thompson will not immediately benefit, but we suspect it will be able to at some point down the road. One of the industries IHS Markit follows is agribusiness, which of course supplies the food, beverage… and spice market.

Focus on Automation

Beyond the ability to connect, another of the four pillars on which the Plex Smart Manufacturing Platform is built is automation. Certainly, automation also plays a key role in alleviating some of the pain associated with the COVID-19 crisis. For decades now manufacturing has been investing in automation on the shop floor. Automation can speed production, eliminate variability, improve quality and reduce costs. An unfortunate side effect has been that it has also cost some jobs. But in all fairness, it has also created jobs, although these new jobs require different skills.

Now in the midst of a global pandemic, when the health and safety of workers is top of the list in terms of priorities, there is a silver lining in the reduction in workers required to keep production running. If you simply need a handful of employees to monitor automated production, those employees are more likely to be able to maintain acceptable social distancing and product continues to be produced. And now as this automation (think robots, PLCs, mechanical devices) are increasingly connected to the Internet, taking advantage of the Industrial Internet of Things (IIoT), perhaps production can be monitored remotely. Even remedial work might be done through augmented reality, with limited staff on site.

Plex’s engineering team, led by CTO Jerry Foster, is constantly investigating and experimenting with leading edge technology including augmented reality (think hands free and/or remote monitoring and even remote repair). Those investigative efforts also led to the acquisition of DATTUS in 2018 to accelerate IIoT adoption through connectivity, data management and data analysis.

But there is more to automation than machines and robots on the shop floor. There are many processes that must occur in the back and front offices of manufacturers that can be streamlined and automated, freeing office workers from repetitive tasks. And therefore, on May 14,2020, Plex announced Robotic Process Automation (RPA) can now be added on to the Plex Smart Manufacturing Platform through a new partnership with business technology solution provider Thirdware

An early adopter Plex customer Stant Corporation, a tier-1 automotive supplier of thermal and vapor management parts, worked with Plex and Thirdware to implement RPA to manage its invoice delivery. This was a labor-intensive and error-prone process, spread across multiple technology solutions. With the help of a bot on the Plex Smart Manufacturing Platform, Stant has been able to reduce its invoice backlog from three weeks to four days, with 100% data entry accuracy. Now, 80% of invoices are able to move to processing without intervention, enabling the Stant team to focus on more valuable problem-solving activities. And of course, a bot never has to move to a remote working location during a global pandemic.  After this first (successful) application of the technology, Stant went on to work with Plex and Thirdwave to create more. It now uses multiple bots for accounts payable, accounts receivable, customer service, and supply chain processes.

Summary and Recommendations

Manufacturers across the globe face many different challenges as the world tries to emerge from a global pandemic. Depending on where you live, the worst may be over. Or not. And even as we see signs of recovery, there is a high likelihood that things will never go back to exactly the way they were before. These factors combined reinforce the one common theme that confronts us all: uncertainty.

One thing is certain. As the communication and interaction around the world continues down the path of becoming more digital and more virtual, cloud computing and advanced technology that supports connectivity, collaboration, automation and agility step out of the realm of “nice to have” and become table stakes. Those manufacturers operating on the Plex Smart Manufacturing Platform are fortunate in that the solution that runs their businesses allowed them to immediately support workers remotely.  Plex also continues to innovate to bring more automation, to connect and integrate, to track and analyze.

If you are a Plex customer today, our advice is to hold the fort and continue to consume as much innovation as Plex can throw your way. If you are not a Plex customer and you are still struggling to connect newly remote workers, if you don’t have the agility to support whatever the new normal way of operating becomes, you might be thinking implementing a new ERP, MES, or MOM solution is the last thing you want to tackle right now. You could be dead wrong. If business is slow, take advantage of the down time. It’s okay to be dead wrong. It’s not okay to let your business die.

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The Secret Benefits of ERP You Can’t Afford to Ignore

                                                                                    April 2020

And the Key to Unlocking Them

Is the ERP that is running your business able to help you effectively achieve your goals in the current market? Does it take advantage of the kind of advanced technology that we have all come to rely on in our personal lives? Is it agile and flexible? Does it adapt easily to our rapidly changing world? Does it provide the level of connectivity needed to successfully operate in today’s global, digital economy? Or are you running a solution that may have once been state of the art, the best of the best available at the time, but is now stuck – stuck on an older release because of customizations that built barriers to innovation? Or stuck because you simply can’t justify the cost and effort of upgrading for the limited business benefit, because you’ll still be constrained by older technology?

If you are indeed stuck, your best path forward is most likely replacing it. But for decades ERP replacement was likened to brain surgery. It was reserved for dire cases only. “Rip and replace” was to be avoided at all costs. Today these perceptions are just as outdated as the solutions to which they apply. Yes, early ERP solutions were rigid and inflexible, limited in functionality, hard to install and implement and even harder to use. Innovation was painfully slow due to rigid architectures and older technology.

You can’t really blame those early solutions or the software companies that created them. The kind of technology needed for flexibility, ease of use and agility simply didn’t exist, making those conclusions justified. Why go through all the blood, sweat and tears, not to mention the cost, of implementing a newer solution just to wind up right back where you started?

But the world, and your business continued to change, and so have newer, next generation ERP solutions. Solutions now are far more flexible and technology-enabled, provide many more features and functions, are easier to install, easier to implement and easier to use. They bring far more benefits than ever before, but for those with lingering (mis)perceptions about ERP today, they remain hidden. And in today’s fast-moving, global, digital economy, you simply can’t afford to ignore them. The key to unlocking these secret benefits is in understanding the potential and then mapping out a plan to realize them.

Advanced Technology Holds the Key

What makes today’s next generation ERP so different? A variety of different type of advanced technologies can be embedded in enterprise applications today. It is through these kinds of embedded technologies that new ERP systems provide additional value. Of course, some vendors do a better job than others in leveraging them, and hence provide more value than others. This is why I’ve included a section later that provides some insight on how to best evaluate ERP solutions in order to ensure success. In the meantime, Table 1 presents some results from my 2019 Enterprise Solution Study, on the perceived value of several of these technologies. Note this study collected feedback from 464 survey respondents from companies of all shapes and sizes.

Table 1: Perceived Value of Advanced Technologies

Source: Mint Jutras 2019 Enterprise Solution Study

While a growing percentage of respondents perceive these technologies as providing strong value, on average (across all) 30% are unsure of the value. Essentially, they are saying, “Show me.” More than one in five (22%) see little or no value and another 10% simply don’t know. And therefore, it falls to industry experts and the vendors themselves to educate their audiences in order to prove the value and unlock these secrets. Let’s start that process by exploring a few of these.

Platforms and Architecture

Development platforms and microservices architectures, on which applications are built, provide the perfect example of those secret benefits. For the reader with a technical background, a microservice architecture is defined (by Wikipedia) as an architectural style that structures an application as a collection of loosely coupled services. For those nontechnical readers, think of it as constructing a solution from a set of Lego building blocks.

Think about how you build a structure from Legos. Each Lego block is made of the same kind of material and is attached (connected) to the other Lego blocks the same way. In many ways they are interchangeable. But by choosing different colors and sizes, and connecting them with a different design, you can make a structure that is very unique. And once constructed, if you want to change it, decoupling some of the blocks and replacing them doesn’t destroy the parts that are not affected. There is far less disruption introduced than if you had constructed it with a hammer and nails.

These platforms and technologies provide a level of agility, configurability and extensibility to today’s applications to help us respond to change.

Cloud and SaaS

We see more interest in cloud enablement and Software as a Service (SaaS). Indeed, whether you run a solution on your own premises or in a private or public cloud, the ability to access anytime, from anywhere is a significant advantage and cloud-enablement opens the door for the kind of connectivity you need as a full and active participant in the digital economy. Yet still, last year only half of our survey participants perceive it as bringing strong value. We suspect that if we were to ask this question today, given the current need for distancing and remote work, this might change.

But there are other benefits to moving to the cloud in general and SaaS in particular. We see subscriptions to software rapidly replacing the traditional license. When you license a copy of the software you take on the responsibility for maintenance and upgrades. This is especially important in light of the fact that when asked to select the top three challenges in achieving maximum value from ERP, “cost and disruption of upgrades prevent us from innovating” was at the very top of the list, selected by 40% of our respondents. With a SaaS solution, the solution provider assumes that responsibility and does the heavy lifting for you.

Artificial Intelligence

Technologies like machine learning, natural language processing and other forms of artificial intelligence have become quite prevalent in consumer technology (think Siri and Alexa, or GPS that learns your favorite route). Now is the time to bring them into the enterprise, much like they were insinuated into our personal lives – by adding value and embedding them.

Apple customers didn’t demand the ability to converse with their mobile devices. Apple just delivered it, not as an option and certainly not without adding to the cost. But they didn’t charge extra for it. Other device manufacturers followed suit. Pretty soon virtual assistants became commonplace features. And people got hooked. It was only after this secret was unlocked that people willingly went out and bought stand-alone devices like the Amazon Echo Dot and Google Home.

Make no mistake – the same thing is happening with applications for the enterprise. Modern platforms add a level of configurability and extensibility that adds agility needed to keep pace with the unprecedented pace of change in technology and business. Cloud and SaaS add speed and contribute to affordability. Pretty soon all sorts of artificial intelligence technologies will be generally available for the enterprise, but you won’t be able to take advantage of them if you are still stuck on old legacy solutions.

Automation

Robotic Process Automation (RPA), as the name implies, is all about automating routine tasks in order to free up time available to perform tasks which require more strategic thought and therefore contribute more value to your business. For decades ERP has claimed to streamline and automate these processes, but the term “automate” was used quite loosely, to say the least. Today’s technologies truly enable these tasks to be performed with little or no manual effort. Automating the filing of travel expenses, reconciling data for a month or year-end close, three-way matching and applying cash to outstanding invoices are all examples of routine tasks that can be largely automated, requiring manual intervention only when exceptions are detected.

And of course, the more intelligence you can add to these automated processes, the fewer the number of exceptions that require manual intervention. Embedding artificial intelligence and machine learning enables RPA to better detect anomalies and prevent errors. With these added capabilities, the more they are used and the more data that is collected, the more they continue to learn, adding more intelligence over time. Today’s “intelligent ERP” solutions are nothing like legacy applications of yesteryear.

Advanced Analytics

The addition of advanced analytics, often in the form of predictive or cognitive analytics, is another way to make ERP smarter. Early ERP solutions were notorious for being far easier to get data into than information out of. You had to know exactly where to look and how to get there if you had any hope at all of getting answers to business questions. And you had to ask all the questions because the solutions didn’t offer up much to notify you of issues.

That has all changed with new next generation solutions. Today decision makers are often greeted with role-based, personalized dashboards with data presented in charts, graphs and other visually appealing and meaningful ways. These dashboards become their portal, a gateway so to speak, to all the data previously hidden in applications. They get alerts and notifications on those dashboards and on their mobile devices. Not only have user interfaces become more intuitive, making systems easier to use, some have even learned to “listen” and “speak.”

All next generation solutions today do a better job of presenting data to you. But data driven decision-making requires more than just reporting. Predefined reports help you answer relatively static questions like: How much did I sell by customer type or region? Analytics present the bigger picture and can help you figure out what questions to ask like: Where and how will I have the most success in regaining and /or growing revenue? In your quest to answer that you might ask: Are all sales down, or only by region or customer type or sales rep or product? This might take several iterations and the exact path you will take in your questioning won’t be apparent until you start to drill down.

Smarter analytics (like predictive and cognitive analytics) can spot patterns that produce fewer sales. Smarter analytics can do predictive scoring and modeling to identify those patterns early and exploit them for guided decision- making. The smartest solutions will then continue to learn, getting better at spotting issues earlier, hopefully in time for you to course correct.

Tips For Your Evaluation

Looking for a new ERP solution is not something you do every day. If it has been awhile since you have been through this exercise, take note: A lot has changed.

Whereas fit and functionality once drove most decisions, basic and even not so basic features and functions are table stakes today. While an 80% fit used to be acceptable, today’s flexible and technology-enabled solutions should get you much closer to 100% than ever before, without the need for invasive customization.  Of course, you still need to perform due diligence and confirm robust functionality, including industry-specific features and functions, but if you haven’t looked around for awhile, expect to be pleasantly surprised.

Yet while features and functions are indeed important, there is danger in making a decision solely based on what you need today, because it might not be what or all that you need in the future. Last year my Enterprise Solution Study found 90% of companies believe they face some level of risk in their businesses and/or industries being disrupted by new innovative products, new ways of selling or pricing existing products or services, entirely new business models, or some combination of all of the above. And don’t forget all the traditional forms of disruption like expansion, reorganizations and regulatory issues. All this disruption can have a cascading impact on business application requirements, making agility – the ability to easily innovate, evolve and change – even more important than current functionality. For that you need the right approach to innovation and the right architecture and platform to support it.

Also equally important today is the whole user experience, including easy navigation, visual appearance and personalization. And don’t forget integration capabilities and the quality of built in reporting and analytics. Any evaluation today requires you to raise the bar in terms of your search.

So…Where do you Start?

The answer to that question may be closer to home than you think. Just because you are not running a next generation ERP, enabled with the latest and greatest technology, doesn’t necessarily mean your current ERP solution provider hasn’t stepped out ahead of you.

SAP might be the perfect example of this. A longtime leader in the market, SAP is perhaps one of the very few, if not the only “household name” in ERP. However, many of its customers have yet to move to its latest, most technically advanced product, SAP S/4HANA. While SAP also has products that target the small to midsize market (SAP Business One and SAP Business ByDesign), it is also the incumbent in many very large multi-national enterprises that have invested heavily in predecessors to S/4HANA. And if these solutions date back far enough, chances are they have been heavily customized. Without the advantage of platforms and architectures available today, any kind of modification or invasive customizations created barriers to moving forward. And therefore, the move to S/4HANA is certainly no simple migration.

However, if you are currently running your business on an outdated solution, whether it is an older version of SAP’s ERP or a legacy solution from any vendor, simply migrating to a newer, more technology-enabled system means you will drag along decisions that were made when ERP was far less feature rich, technology enabled and flexible. You shouldn’t be looking to recreate what you are doing today, but instead automating, improving efficiency and productivity, providing added visibility and giving yourself the ability to make more data-driven, strategic decisions. You should also look for a return on your investment (ROI) in terms are real cost savings and/or the generation of increased revenue. For this, you need to treat it like a re-implementation, with all the careful planning and commitment that implies.

Not sure where to look for this kind of ROI? I would strongly encourage you to examine these real-world SAP Success Stories.

Conclusion and Recommendations

If you are currently running an ERP solution that you cannot legitimately call modern, intelligent or next generation, you might still be viewing its replacement like brain surgery. I prefer to treat it more like joint replacement. You suffer with that bum knee or hip until you can’t stand the pain any longer, or you simply can’t function properly. Many ERP implementations today suffer from pain, and prevent you from being flexible and able to do what they need to do.

Whether you view ERP as brain surgery or joint replacement, there is no such thing as non-invasive surgery. It can and should have a serious impact on your business, but hopefully in a positive way.

Here are a few recommendations for a successful ERP journey:

  • Don’t wait until the patient is critical. Making a selection and running an implementation project when the business is under duress does not create an atmosphere of careful consideration, planning and execution. You will be tempted to take shortcuts that you may later regret.
  • Need it but can’t afford it? Consider the potential cost savings. Most ERP solutions pay for themselves in less than two years. If capital funds are not available to support the project, consider SaaS deployment with less up-front cost.
  • Set goals and measure. Before embarking on your ERP project, decide which metrics will measure success. Establish a base line, set goals and measure progress against those goals. When you reach them, set another goal. Continue to measure and continue to reap more benefits.

An ERP implementation is not easy. Just like surgery, there will be some “recovery” time. But that doesn’t mean your business stops during that recovery period. It just means you need to take extra care to insure a full recovery, with the result being a healthy business that is able to function better than ever.

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Innovation Fuels Acumatica’s Accelerated Growth

An Innovative Approach to Business, Coupled with Continual Product Innovation

Acumatica, a prominent provider of cloud Enterprise Resource Planning (ERP) software, has been calling itself “the world’s fastest-growing cloud ERP company” for several years now. But growth can be measured in many different ways – as an absolute or a percentage increase, measured by revenue, number of customers and/or employees, just to name a few. This opens the door to multiple competitors claiming that top spot of “fastest growing.” But as Acumatica shared some statistics at its recent Acumatica Summit 2020, it would appear that it is indeed moving away from the pack.

As a subsidiary of Swedish investment firm EQT Partners, Acumatica does not disclose revenue, but does share some numbers. License revenue from all deployment models grew 72% year over year. Acumatica signed on 1,300 in 2019, bringing the total to over 6,500. A year ago there were no user groups. Today there are nine. In 2019, 1,500 people attended the annual conference.  This year, over 2,500 were in attendance at Acumatica Summit 2020, with thousands more tuning into the live stream.

Given the growing acceptance of cloud and Software as a Service (SaaS) in recent years, Mint Jutras has been expecting (hoping) to see at least one of the native cloud solution providers enter a period of explosive growth. Thus far we have been disappointed, but now Acumatica appears to be doing just that. How has Acumatica been able to achieve what others have strived but failed to do? We see several factors combining synergistically to create a perfect storm to drive growth. The common theme across all these contributing factors is Acumatica’s ability to continually innovate, not just in terms of the product, but in terms of its own business model.

Click here to read the full report where we will look at how innovation fuels growth from both of these perspectives, starting with how Acumatica does business.

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Rootstock Delivers on the Value Proposition of the Salesforce Manufacturing Cloud

                                                                                   

Providing the Much Sought After 360o View

How do you achieve a 360o view of your customer? While this has been a popular catch phrase for solution providers offering Customer Relationship Management (CRM) systems for years now, there have always been missing pieces to this panorama. A good CRM, as the acronym implies, can indeed help you manage the relationship with your customers, often starting at a point when the customer is still a prospect. CRM solutions do a good job of managing a pipeline from initial contact to quote, and perhaps even to the point where the quote is turned into an order. If this is all it does, it might be more appropriately classified as Sales Force Automation (SFA). But of course, some CRM solutions extend beyond this. But no CRM, on its own, really manages an order, creates an invoice or manages accounts receivable and collects cash – all necessary for that 360o view. That is the domain of Enterprise Resource Planning (ERP).

Salesforce CRM is indeed one of the most mature CRM solutions on the market today. While lighter versions exist for even the tiniest companies, those that tap into its full and extended functionality are able to effectively digitize marketing, manage diverse channels, connect sales and service and derive business insights and intelligence about all things customer-related. This may be sufficient for some types of businesses, but manufacturers face some additional challenges. If sales and operations are not properly aligned, if revenue forecasts can’t accurately predict demand at a detailed product level, then manufacturing can’t deliver completely and on time without inflating inventory. And even with padding inventory, can it deliver the kind of customized or personalized product many markets demand today?

In order to address these specific challenges of manufacturing, Salesforce recently introduced its Salesforce Manufacturing Cloud to “deliver transparency and predictability across your ecosystem… Align sales and operations, unify account planning and forecasts, and deliver greater transparency with a tailor-made CRM for manufacturers.” But in order to make good on this promise, Salesforce itself must tap into its own ecosytem. Enter Rootstock, providing Cloud ERP for Manufacturing, Distribution and Supply Chain organizations. As such, Rootstock plays a key role in helping Salesforce deliver on its declared value proposition of delivering the much sought after, but often elusive, 360o view of the manufacturer’s customer.

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Plex Systems: Connect to Transform

Accelerating Out of the Curve of its Own Transformation

Over the last few decades Enterprise Resource Planning (ERP) solutions for manufacturing have evolved from their roots in Material Requirements Planning (MRP), and have become quite mature. Throughout that time we’ve seen solutions and solution providers proliferate and then consolidate, leaving a select few that develop and support a single ERP solution dedicated to filling the needs of manufacturers. Plex Systems is one of those few, but even within this select group, Plex is unique. Not only does its Plex Manufacturing Cloud (PMC) satisfy the back-office needs of manufacturers, it also dives deep into the shop floor, with strength in quality management and manufacturing execution. Born in the cloud, Plex’s ERP has been offered exclusively as Software as a Service (SaaS) since 2001, making the company a true cloud pioneer.

For years following 2001 Plex Systems was in the high-speed lane on the straight-away, rapidly expanding its depth and breadth of functionality. PMC became the performance engine driving growth and profits for a steadily growing customer base. But just as manufacturers today must undergo a transformation in order to compete effectively in the global, digital economy, so must Plex. And in the course of that transformation it must navigate some curves. It must evolve its platform and architecture, embrace new digital technologies, support disruptive business models and adapt to changing expectations of today’s workforce.

Whether driving a muscle car or a business, you know you need to ease up a bit on the accelerator as you enter a curve in the road. But if you have a performance engine under the hood, there is nothing more exhilerating than accelerating out of that curve. Where is Plex Systems today? Is it about to explode out of the final turn?

The Straight-Away: A Bit of History

In its early years Plex offered the only ERP for manufacturing that was available exclusively as Software as a Service (SaaS). In order to fully appreciate why Plex was indeed in the fast lane, on the straight-away, you have to understand why Plex became a “SaaS only” company in 2001. It wasn’t because SaaS and cloud were the hottest topics back then. Back in 2001 “SaaS” and “cloud” were not even part of the vocabulary of the typical manufacturer. It wasn’t because the company wanted to be on the bleeding edge of new deployment options. Most manufacturers weren’t even knowingly and willingly considering SaaS.

The real reason was because the founders had developed technology and processes to rapidly develop applications and SaaS was the only way they could deliver software as fast as they could develop it. They wanted to share new functionality and new technology as it was developed, not 12 to 18 months later, when the next release was scheduled. As a result, early on, customers didn’t buy the Plex Manufacturing Cloud because it was SaaS. They bought it because of the broad and deep functionality and the company’s willingness and ability to respond to their needs… in spite of the fact that it was deployed and delivered through the cloud.

And yet back in the early 2000’s Plex was not only a fledgling company, but also a self-funded SaaS solution provider. Of course, back in 2001, ERP systems in general, especially those offered by small start-ups like Plex, were not as full-featured as today and this naturally led to gaps. However, when you have a development team excited about new rapid application development tools and anxious to please customers, those gaps get filled quickly. During this “straight-away” phase, Mint Jutras once observed that in the time it took a traditional development organization to tell its customers/business users why something couldn’t be done, the Plex development team would have had a proto-type of the solution up and running.

Unlike most providers of multi-tenant SaaS solutions, Plex willingly “customized” the software. But the enhanced software wasn’t custom for long (if at all). Plex always incorporated these enhancements into the product. As a multi-tenant SaaS solution, every single customer runs the exact same software. It just might not look or behave identically from customer to customer because most of these enhancements could be selectively turned on… or not.

Throughout this time, the lion’s share of innovation came from customer-driven enhancements. In the early days, customer-driven also meant customer funded. So, a customer would pay Plex Systems to enhance the product and other customers would benefit. In other user communities this does not happen, at least not consistently. The typical way of thinking is, “I paid for it and it’s mine and only mine.” In the land of Plex, customers simply viewed this as making a contribution to the community. And they expected others to do the same. Each gave a little, and everyone got a lot. When everyone is running the same software, literally, not figuratively, it creates a unique sense of community, one of being “all in” together.

The Turning Point

This strategy worked brilliantly for years, but then Plex reached a point in its own maturing process where it no longer made as much sense. The gaps in functionality had been filled and Plex needed to formulate its own strategy for growth, rather than let itself be led entirely by its customers. Adding functionality that was not mainstream, or features that perhaps led down a path Plex deemed not to be strategic, would only add unwanted complexity to the solution. So, several years ago Plex took charge of the roadmap and began to phase out customer-funded development and increased its R&D investment.

But there were other factors at play here as well. This decision came at a time when disruption had become the norm. We live in disruptive times. Last year, the 2018 Mint Jutras Enterprise Solution Study found 89% of companies believe they face some level of risk in their businesses and/or industries being disrupted by new innovative products, new ways of selling or pricing existing products or services, entirely new business models, or some combination of all of the above. And then of course there are still the more traditional disruptive factors like expansion and growth, organizational restructuring and regulatory changes, just to name a few.

All this disruption can have a cascading impact on business application requirements, making agility – the ability to easily innovate, evolve and change – even more important than current functionality. Software delivered as a service is only one of the ways innovation is delivered and consumed faster and more easily. This speed is largely dependent on the way your ERP solution is constructed and the platform on which it sits. This caused Plex to focus some attention on the underlying architecture and what Mint Jutras calls “foundational” technologies.

Table 1 shows how our survey participants perceive the value of foundational technologies that are embedded in enterprise applications.

Table 1: Perceived Value of Embedded (or Foundational) Technologies

Source: Mint Jutras 2019 Enterprise Solution Study

While a growing percentage of manufacturers perceive these technologies as providing strong value, on average almost one in three (32%) are unsure of the value. Essentially, they are saying, “Show me.” And another 9% (the average across all) simply don’t know. And yet investment in these kinds of technologies is essential to the continued health and well-being of any solution used to run a business today. As Plex turned its attention to these underlying technologies, it very likely appeared as if innovation was slowing down. In fact, investment increased; Plex was (and is) just navigating a curve. To understand what Plex is doing, and why, we need to step back and look at what is going on in the world around us all in terms of how solutions today are built and delivered.

“Suite in a Box” or Best of Breed? Yes

First, we need to re-examine a debate that has been waged throughout the world of enterprise applications for decades: choosing an integrated suite or “Best of Breed” approach. Many ERP vendors have been preaching the benefits of a complete, end-to-end solution and arguing against the proliferation of disparate applications for almost as many decades.

This is exactly what Plex has been delivering and it would certainly appear to be what Plex customers want. Plex customers have participated actively in Mint Jutras surveys for many years now. They tend to have more complete solutions than manufacturers running other solutions, and strongly favor a single vendor, single solution.

We asked the survey participants in our 2019 Enterprise Solution Study to choose between a “Suite in a Box” – a complete end-to-end solution that is pre-integrated and ready right “out of the box,” or a more “Best of Breed” approach with a strong core, coupled with the ability to purchase or develop additional functionality and easily (we use the term loosely) connect it back to the core. We recognize the choice is not always so cut and dried, and therefore added some options that are more of a mix but leaning in one direction or the other. The results (Figure 1) surprised us a little. We expected a higher percentage would prefer the Suite in a Box approach.

Figure 1: Which approach is most appealing to you?

Source: Mint Jutras 2019 Enterprise Solution Study

Since collecting this data, Mint Jutras actively sought out discussions with companies, posing the same question, and got very similar results. But then we asked, “Why?” The short answer: most are interested in a fully integrated, fully functional solution, but they want the freedom and flexibility to implement incrementally, in their own determined sequence. In other words, they want both.

Many are also in the midst of a transition to cloud solutions. This may mean a complete shift, starting with the migration or replacement of an on-premise ERP solution. Or it may mean a more gradual shift, often leaving in place on-premise ERP solutions and surrounding them with cloud-based added apps.

The core points of any debate between suite and Best of Breed center around the trade-offs between ease of integration and depth and breadth of solution. With a suite approach, all modules share a common database and are developed using the same tools and technology. This eliminates data redundancy and any need for separate integration efforts.

In the past specialty functionality built into ERP was lighter and less feature-rich and definitely not “best of breed.” While that may have been the case early on, over the years, ERP solution providers added more robust features and functions through a combination of their own development efforts and sometimes through acquisition. Today they are often (not always) able to compete head to head against stand-alone “best of breed” applications.

With the exception of two acquisitions (DemandCaster for supply chain planning and DATTUS for Industrial Internet of Things connectivity) Plex’s functionality has been internally developed and therefore intrinsically built into the suite. This includes rich functionality connecting the shop floor to the top floor. The Plex Manufacturing Cloud can certainly hold its own against so-called best of breed applications in several categories, including quality management (QMS) and manufacturing execution (MES).

So, if companies can get best of breed functionality in a suite, without the need to manage separate integrations, what drives the desire for the “Best of Breed” approach as we articulated it in our question?

We find many articulate their desire as a “Best of Breed” approach because they equate the suite to a monolithic architecture and an “all or nothing” kind of decision. In some ways that is true, but not entirely so. Most any ERP solution is comprised of modules (e.g. general ledger, accounts payable, inventory management, purchasing, order management, shop floor control, etc.) and certainly some are optional. There is always a preferred logical sequence to implementation because of dependencies in the data. Foundational data like charts of accounts, customers and part or product masters must be established early. But once the foundation is built each company is free to decide what comes next and how far to go. This is certainly the case with Plex customers. Most go live when they have the basics established, but then have further steps planned.

But with a monolithic architecture few, if any of the modules are designed to stand alone. Sure, you can just implement general ledger, or inventory management perhaps, but you can’t just implement the manufacturing execution system (MES) that is built into ERP. Or the Quality Management System (QMS). Which is one of the primary reasons why Plex Systems is actively engaged in decomposing its monolithic solution and reconstructing it as loosely coupled components. This is at least one of the curves Plex is navigating.

What, if any, significance does this have on existing Plex customers and prospects? For those customers looking for a complete end-to-end solution, it allows Plex to once again speed the delivery of added features and aids them in providing last mile functionality without adding complexity. Instead of building customer-driven enhancements into the base, it can assemble a unique set of components to deliver industry-specific functionality for each of the segments of manufacturing on which Plex focuses.

For prospects looking to start their own cloud journey or digital transformation, it provides an option to start small, perhaps with MES instead of a full ERP solution. And of course, that provides Plex with added growth opportunity.

But “decomposing the solution” is not the only way Plex is navigating this curve and transforming the company and its solution. It is actually hitting on all of the different aspects listed back in table one. The most obvious is the transition to cloud and SaaS. While not exactly a “technology,” it is the only entry in the table that is even close to mainstream. But this requires no transition for Plex. PMC was born in the cloud and has always been offered as a multi-tenant SaaS solution. Enough said.

However, let’s hit on a few of the others listed.

Platforms and Architecture

Development platforms and microservices architectures are key to this decomposition. For the reader with a technical background, a microservices architecture is defined as an architectural style that structures an application as a collection of loosely coupled services. This is the process of decomposition to which Plex refers in its roadmap. For those nontechnical readers, think of it as constructing a solution from a set of Lego building blocks. Purists hate this analogy, and yes, it is an over-simplification. But it is an effective analogy that resonates with most business users that don’t have the interest or inclination to dive deep in technical jargon.

Think about how you build a structure from Legos. Each Lego block is made of the same kind of material and is attached (connected) to the other Lego blocks the same way. In many ways they are interchangeable. But by choosing different colors and sizes, and connecting them with a different design, you can make a structure that is very unique. And once constructed, if you want to change it, decoupling some of the blocks and replacing them doesn’t destroy the parts that are not affected. There is far less disruption introduced than if you had constructed it with a hammer, timber and nails.

Plex is actively engaged in developing this type of platform and is probably about a year away from completion. But in the meantime, it is delivering value through other associated technologies, starting with the Industrial Internet of Things (IIoT).

Industrial Internet of Things (IoT)

While sensors, machines and equipment on the shop floor have been collecting vast volumes of operational data for decades now, that data has not always been “connected” or accessible for decision making. Indeed the very fact that this data collection has been happening for decades contributes to the problem. Many of the machines and software put in place decades ago pre-date the Internet and therefore have no ability to connect to a network. Retrofitting equipment, or replacing it, is expensive and most of these machines were designed to last a lifetime. Expensive custom integration projects are beyond the expertise and budgets of all but the largest manufacturers. So what’s the alternative?

This is where Plex’s acquisition of DATTUS comes in. Providing an alternative is what DATTUS is all about. Think of it as the bridge between you and your machines. The platform is a hardware/software combination, which collects data from PLCs, VFDs, industry protocols like MTConnect, and popular enterprise applications including Salesforce, SAP and (of course) Plex. The goal: making this data available for analysis and decision-making.

The majority of the original DATTUS customers are not sophisticated and therefore beyond the physical connection Plex is concentrating on developing applications to be used right out of the box, rather than just providing a tool set and leaving it up to customers to connect manufacturing equipment and sensors to the cloud and to PMC. DATTUS is now Plex Industrial IoT and the first applications are centered around visualization of the sensor data, combining it with data from PMC, adding thresholds for alerting production supervisors when a process is about to go out of spec. But the team is already working on connecting data to MES and QMS to complete the genealogy and traceability and for anomaly detection to prevent machine failure. But this anomaly detection will require some artificial intelligence.

Artificial Intelligence

Technologies like machine learning, natural language processing and other forms of artificial intelligence have become quite prevalent in consumer technology (think Siri and Alexa, or GPS that learns your favorite route). Now is the time to bring them into the enterprise, much like they were insinuated into our personal lives – by adding value and embedding them.

The concept of machine learning in an industrial setting employs computer algorithms that learn and improve over time with use, often drawing on data, not only from enterprise applications, but also from equipment on the shop floor or even from smart products in the field. Between the data already being collected in PMC and the data that can be potentially collected through Plex IIoT, Plex is sitting on a potential gold mine of data to use in machine learning. The team is laying the ground work for future initiatives.

In the meantime, the development team is already experimenting within PMC by analyzing settings to discover combinations that produce great (implementation) results and those that can spell disaster, in order to guide new customers and even warn them of pending disaster. Delivering this kind of artificial intelligence provides value, not only to those looking to connect to the IIoT, but to all Plex customers. And therefore, Plex is following the same path Apple took in delivering a voice-activated virtual assistant (Siri). Nobody asked Apple to deliver this and Apple didn’t make it a separate option (with a separate price tag). Once customers started using it, they saw the value and it became a prerequisite for any smart phone. Will Plex set the standard in terms of performance evaluation of a SaaS solution for manufacturing?

Accelerating Out of the Curve

Like any good business competing effectively in the today’s global, digital economy, Plex Systems has been undergoing a transformation. Unlike other SaaS-only solution providers that operate in the red, Plex is cash flow positive and spending more in R&D than ever before in order to fund and fuel this transformation.

For more than a decade and a half, the development team worked swiftly to build out robust functionality that connected the shop floor to the top floor, through practical (often customer-funded) innovation. But today we live in a different world. Both the pace of business and the pace of change are accelerating. The road to success is not necessarily a straight path. Disruption throws us some curves.

And therefore, Plex must find new ways of listening and new ways of solving problems – problems its customers might not even know they have. Apple (think Siri) and Steve Jobs provides some inspiration.

“Get closer than ever to your customers. So close, in fact, that you tell them what they need well before they realize it themselves.” Steve Jobs

Plex’s customers aren’t asking Plex to “decompose” its full suite, but customers like Accuride that operates Plex in some of its divisions, while also running SAP and Workday, see the benefit of being able to insert (Plex’s) MES in other divisions currently running SAP.

Customers transitioning from legacy, on-premise solutions face new challenges and have all sorts of different priorities. The shortest path to their goals may not be the traditional road, but rather a road less travelled. Customers (and prospects) that think artificial intelligence is still the stuff of science fiction aren’t asking Plex to predict machine failures on the shop floor, but they will most definitely benefit.

All this potential for change and disruption, shifting priorities and technology innovation makes the foundational work Plex is doing invaluable. And so are the new technologies it is introducing to its solution. There is nothing more exhilarating than accelerating out of a curve. If you are a Plex customer or prospect, buckle up… it’s about to get very exciting!

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Epicor: Firing on All Cylinders

More Cloud, More Connected, More Intelligent, More Innovation

Epicor’s mission is to be the cloud vendor of choice in the markets it serves. Those markets are manufacturing, the automotive aftermarket, wholesale distribution, service, lumber, and retail. Its latest user conference, Epicor Insights 2019, served to provide a progress report on that mission, including some exciting new product announcements. Over the past 18 months, the company has invested heavily in its major go-forward product lines. It has published 54 software releases (15 major, 39 minor), and brought a brand new Epicor Retail Cloud to market, completed as planned and on-time. As of three weeks before the event all its strategic product lines had been modernized and Software as a Service (SaaS) enabled. And its SaaS business is growing at an impressive clip, with year over year cloud revenue increasing over 90%. A brand new artificial intelligence (AI) based Epicor Virtual Agent (EVA) was unveiled at the event, along with new industry capabilities, built on cloud technologies, to power digital transformation and enhance the customer experience.

All of this news represents good progress, but Epicor is still fighting the battle of establishing a name for itself as what Mint Jutras last year called “the new Epicor.” As we noted then, “The Enterprise Resource Planning (ERP) market is very mature. Some solution providers have been around a long time, dating back to even before the acronym ERP was coined. Epicor Software Corporation is one of those vendors. With that level of maturity comes both pros and cons. On the plus side, as a mature provider, it brings to the market more than 45 years of experience and a set of robust and feature-rich products. On the down side, prospective buyers of enterprise software who might have encountered Epicor in the past may think they know the company and its solutions. But their knowledge and perceptions may be severely outdated.”  A year later, we (still) suspect many customers and prospects alike don’t really know the new Epicor.

The new Epicor is firing on all cylinders. Unlike the rigid, monolithic solutions of the past, its go-forward products are supported by modernized, component-based architectures that support connectivity, accelerate innovation and support the intelligence needed to compete in today’s global, digital economy. While Epicor still offers a choice of deployment models, it operates under a “cloud first” policy that encourages (but doesn’t force) customers and prospects to harness the power of the Internet. But not everyone seems to have gotten the memo. Perhaps if we review some of the recent steps Epicor has taken, we might be able to enlighten those who have not.

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Aera Technology Turns Data Into Decisions and Actions

Aera Cognitive WorkBench: Your Next Breakthrough?

Technology is changing the world today. On a personal level it changes the way we live, work and play. On an enterprise level, it changes the way we communicate and transact business. The rapid pace of technology innovation and exponentially growing volumes of data can be both exhilarating and also a little frightening. Artificial intelligence (AI) is insinuating itself into our personal and professional lives in many ways. As consumers we are subjected to personalized targeted marketing. We frequently have conversations with our mobile devices (think Siri and Alexa). And self-driving vehicles, while not perfected (yet) are no longer the stuff of science fiction.

And yet, even as we are surrounded by all this technology, even as modern enterprise applications open new doors to us in terms of data accessibility and visibility, most important business decisions are still made in much the same way as they have been for decades. We spend hours pulling reports to gather data and review exceptions. Next we spend days analyzing it to determine what options are available. Then we spend weeks sending emails and making calls to gain a more complete understanding. We run through different scenarios, trying to play the “what if” game and figure out the best decision. Only then do we take action and by that time, guess what? The data and the conditions have already changed. Windows of opportunity may already have closed.

Aera Technology thinks there is a better way. Its data crawlers (patented real-time crawling technology) collect, index and harmonize billions of data points from complex enterprise systems and external data sources. Its processing engine analyzes data continuously (even while you sleep) to detect business risk and opportunities. After utilizing decision trees and algorithms to recommend the best course of action, its new Cognitive Workbench engages the relevant users to collaborate, evaluate and approve a suggested course of action. Based on your response, it learns what works and what doesn’t. And in the future, it will evolve to take action autonomously right in transactional systems like Enterprise Resource Planning (ERP).

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Oracle Enterprise Applications:  Speeding Innovation in the Cloud

With a Heavy Dose of Machine Learning

Oracle OpenWorld is a huge event, covering a plethora of topics. Here at Mint Jutras we focus exclusively on enterprise applications that run businesses. At the very core of those is Enterprise Resource Planning (ERP), but these days it is often difficult to tell where ERP ends and other applications begin. And therefore we often stretch the boundaries of ERP and also write about Enterprise Performance Management (EPM), Human Capital Management (HCM) and also the “Customer Experience (CX).” While we leave coverage of hardware, infrastructure and data base technology to other analyst firms, enterprise applications provided plenty of food for thought at Oracle OpenWorld 2018.

According to Steve Miranda, Executive Vice President, Applications Product Development, the two key themes driving his development organization are movement to the cloud and speed of innovation. These two are closely related. Mint Jutras has long been a strong proponent of software as a service (SaaS) for many reasons, not the least of which is the ability to deliver more innovation – that is also easier to consume – faster. Mint Jutras would agree both of these themes are necessary and commendable. Both address the inertia holding many companies back from being fully active, successful participants in the rapidly changing, global, digital economy.

In the recent Mint Jutras report Digital Transformation: It’s Time to Develop a Sense of Urgency, we discussed digital transformation in the context of enterprise applications. Where are we on this journey? You might be surprised by the data we have collected that indicates enterprises might not be as well prepared for the global, digital economy as they think. What is Oracle doing to remedy that situation?

What Is Digital Transformation?

In our previous report, we began our discussion by posing the question: What is “digital transformation?” In so many ways, in the context of the software that runs your business, it is simply delivering on the original promise of ERP. Mint Jutras defines ERP as an integrated suite of modules that provides the operational and transactional system of record of your business. Even the earliest versions of ERP did indeed provide this system of record. But did they live up to the promise of an end-to-end, integrated solution that could streamline and automate all your business processes? Did they make your life easier? No. The technology necessary to deliver on that promise simply didn’t exist back then.

In the meantime, the pace of change and the pace of technology innovation continue to accelerate. Today that pace is staggering and fortunately, the technology needed to deliver on that promise finally exists, and a lot of it sits in Oracle’s vast portfolio of products. However, not all of Oracle’s customers are able to take full advantage of these technologies simply because they are still running older solutions. We would call them “legacy solutions,” or sometimes “heritage solutions” – legacy solutions you are proud of. Indeed Mr. Miranda is quick to point out, “So we don’t have legacy customers. They may be on older software. But our customers are still always modern and going forward.”

In response, we would argue: All the more reason to get them off that older software and onto something more modern and technology-enabled. They need the ability to transact business digitally in order to actively and fully participate in the global digital economy. This requires a level of connectivity that is simply not possible with older, legacy solutions. Many of these older solutions pre-date the Internet, and let’s face it… the Internet has forever changed our world. It has created the global digital economy and it has leveled the playing field for entry.

In the past, only the largest companies were able to establish a global presence and trade on a world-wide basis. Today any company, large or small, can establish a global presence, creating unprecedented opportunities. We see new markets, new economies, and even whole new middle classes emerging every day. But as you start to expand your global presence, be careful what you wish for. Without digitally transforming the solutions that run your business, windows of opportunity will close as quickly as they open.

The Role Cloud (and SaaS) Plays

The Internet has truly changed our lives both from a business, as well as a personal perspective. As noted earlier, the Internet has leveled the playing field, making it possible for any company, large or small, to create a global presence and be an active participant in the global, digital economy. The Internet enables the cloud as we know it today. The ability to access software any time, from anywhere is inherent in any solution that resides in the cloud, opening doors for improved and increased usage. And let’s face it – solutions only bring value if they are actually used.

So, web-enablement is the first step. You can simply take your software that is licensed and installed either on or off-premise and improve access. Web-enablement is conducive to supporting distributed users. But taking the next step and running software as a service (SaaS) brings additional value: No capital expenditure required; no need to build out a data center or maintain hardware. The elasticity of a solution, including the ability to expand the number of users without over-taxing the supporting hardware and software, is critical during growth spurts. When your plans involve expansion, bringing up remote sites rapidly and easily is an added benefit and requires less information technology (IT) staff on site. This is especially important when you venture into new, emerging economies where local IT talent may be scarce or nonexistent.

While cyber-security is an understandable concern to all today, if you are a small to midsize company, without a dedicated IT security expert on board, chances are you assume more risk than you would in a SaaS environment. Even if you are a large company with IT security experts on staff, there is no way you will be able to match the level of investment Oracle makes in terms of security from infrastructure and software and business practice. Plus Oracle can deliver the peace of mind of business continuity in the event of a disaster, either natural or man-made.

Based on many of the reasons noted above, the majority of companies today see cloud and SaaS in their future. While customers vote with their wallets, each year our Mint Jutras Enterprise Solution Study seeks more clarity on preferences for different deployment options, including preferences of those that might not have (yet) decided to make a move off legacy software.

We have been asking the following question for years now: If you were to consider a new solution today, which deployment options would you consider? Participants are allowed to select as many as they wish. A summary of answers since 2011 is shown in Figure 1. We skip every other year simply to fit the chart on the page. SaaS is currently the option most likely to be considered and the willingness to consider traditional on-premise solutions dropped off dramatically between 2011 and 2013 and has not recovered.

Figure 1: Deployment Options That Would Be Considered Today

Source: Mint Jutras Enterprise Solution Studies

*Option added in 2015

But don’t let these preferences tempt you into thinking SaaS solutions will be prevalent in the very near future. Why not? There are simply too many existing on-premise deployments out there today, including some of the brands in the Oracle product portfolio (JD Edwards, Peoplesoft, Siebel…) Our most recent 2018 Enterprise Solution Study found about 40% of business solutions today are deployed as SaaS (Figure 2).

Figure 2: Percentage of Business Software that is SaaS

Source: 2018 Mint Jutras Enterprise Solution Study

Our survey respondents estimate that percentage will grow steadily, but it will take many years before SaaS solutions dominate. Mint Jutras believes the momentum is building and the transition will happen somewhat faster than Figure 2 would indicate. But the average company running legacy solutions on premise obviously need a gentle push.

Oracle Makes Moving to SaaS Easier

And Oracle is providing that gentle push. Earlier this year it introduced a new program called SOAR, a prepackaged set of utilities and methodology to get customers to the cloud. For customers running solutions like JD Edwards, Peoplesoft, Siebel, and even the E-Business Suite, this means replacing solutions. While some software vendors offer the same solution on premise and as a SaaS solution, allowing customers to simply lift and shift existing deployments, this provides limited value. In doing so you sacrifice some of the benefits of a multi-tenant SaaS solution (see sidebar). With multi-tenant SaaS solutions, vendors maintain a single line of code. As a result, they can deliver more innovation, at a faster pace. – one of Oracle’s stated goals. With single-tenant solutions running in private clouds, vendors and their clients still face the complexity and disruption of traditional upgrades.

Lifting and shifting also means you are dragging along any limitations of prior implementations. Oftentimes customers delay moving off of old systems because of customizations and yet many of those customizations were required, not to provide market differentiation, but to address functional gaps or other limitations of older solutions, or simply because that was the way things were always done. Today’s solutions are far more configurable and extensible, eliminating much of the need for invasive code changes. If an existing or proposed customization doesn’t provide differentiation, Mint Jutras advises against doing it. And if it does provide a level of market differentiation, look for ways to accommodate it without mucking around in the code. Look for component-based architectures that allow you to extend, rather than modify solutions.

Mr. Miranda seems to agree with these recommendations. When asked about existing customer perceptions around customization he said,

“… the more complex you are and the older implementation you have, the more strongly I would advise you, ‘Do not inventory your customizations.’ If you want an interesting archeological expedition, knock yourself out. What happens is they find things that they don’t even know why they did it. They don’t know if it’s relevant anymore. We have customers who customized things 15 years ago. We’ve actually added it to E-Business Suite. But they haven’t had the time to unravel it. I’m not saying this in a critical way; it’s just a reality. What I strongly encourage the customers to do is look at the baseline product. And guess what? There may be things that are missing that we haven’t built. But you won’t need an inventory of your customization to figure that out. You will know what’s relevant.

Through the SOAR program customers can see the depth and breadth of the product, and determine, with a level of certainty, how long it is going to take to get there. How much is it going to cost them? And when they come out the other end, what they will see in terms of improvement in business practice. In Mr. Miranda’s words:

“So, based on our experience of existing customers, we developed a set of utilities with Oracle Consulting that can take what we think is a reasonable scope – a certain number of integrations, certain number of reports, certain number of extensions. We’ve done the work to automate the data migration. We know how much it’s going to cost in terms of each migration or each extension or each report. And so, we can quickly give you an estimate. Here is your size and shape. Here is your cost. Here is your time. And here’s what we believe, based on a typical customer, will be the amount of business process change/improvement.”

Speeding Innovation

So, cloud is the first step towards speeding innovation, but there’s more to it than that. You also need some foundational technologies, which we still find lacking in the majority of businesses today (Table 1).

Development platforms and microservices architectures, on which applications are built, are the perfect example. For the reader with a technical background, a microservice architecture is defined (by Wikipedia) as an architectural style that structures an application as a collection of loosely coupled services. For those nontechnical readers, think of it as constructing a solution from a set of Lego building blocks.

Table 1: Embedded (or foundational) digital technologies

Source: 2018 Mint Jutras Enterprise Solution Study

Think about how you build a structure from Legos. Each Lego block is made of the same kind of material and is attached (connected) to the other Lego blocks the same way. In many ways they are interchangeable. But by choosing different colors and sizes, and connecting them with a different design, you can make a structure that is very unique. And once constructed, if you want to change it, decoupling some of the blocks and replacing them doesn’t destroy the parts that are not affected. There is far less disruption introduced than if you had constructed it with a hammer and nails.

These platforms and technologies provide a level of agility, configurability and extensibility to today’s applications to help us respond to change. Oracle has invested heavily in both its Platform as a Service (PaaS) and its Infrastructure as a Service (IaaS), resulting in its Oracle Cloud Infrastructure (OCI). It is now turning its attention to other foundational technologies like machine learning and natural language processing (NLP). But it is approaching these differently than some of its major competitors. Instead of providing these technologies as tool sets, Oracle is embedding them into applications so that customers of all sizes (not just those with deep pockets and large development staffs) can take advantage of them “right out of the box.”

Throughout the entire suite of application products, the concept is to turn what used to be “input-receiving” apps into “recommendation” apps. Examples include suggesting the next-best offer or the next-best action in CRM. Or they might help prioritize employee recruiting in HCM or make audit suggestions and cash-management recommendations in ERP.

Digital assistants (bots) will be available pervasively throughout the ecosystem, not only from your phone and through SMS, but also through Slack, Siri, Alexa, or Google Home. The way people work is changing, so the applications must change too.

Mint Jutras believes this approach to embedding these technologies is smart. Notice Table 1 captures not only current adoption rates, but also plans for adoption. We also allowed survey respondents to indicate where they expected software vendors to simply provide these technologies with no additional purchase required (the next to the last column). Few are demanding this today, or even expecting them. And yet Oracle is working on delivering them, much like Apple delivered Siri. Apple customers didn’t demand the ability to converse with their mobile devices. Apple just delivered it. Other device manufacturers followed suit. Pretty soon virtual assistants became commonplace features. And people got hooked. It was only after the value was recognized that people willingly went out and bought stand-alone devices like the Amazon Echo Dot and Google Home.

Now is the time to bring them into the enterprise, much like they were insinuated into our personal lives. Pretty soon these types of technologies will be generally available throughout the Oracle Cloud, but you won’t be able to take advantage of them if you are still stuck on old legacy solutions.

Develop a Sense of Urgency

As we noted in our report on Digital Transformation, it is time to develop a sense of urgency – the same kind of urgency Oracle has demonstrated in urging customers to move to the cloud in order to speed innovation. The digital age is upon us. The pace of change and the pace of technology innovation has accelerated beyond anyone’s expectations and it doesn’t show any signs of slowing down. We live in disruptive times.

We asked our 2018 survey participants to assess the level of risk their industries faced in terms of the potential for disruption.

Figure 3: What risk do you face in your industry being disrupted?

Source: 2018 Mint Jutras Enterprise Solution Study

While all but 10% acknowledged some level of risk, the majority (84%) feel the risk is low to medium rather than high or imminent. Yet we feel compelled to ask the question: How do you think the taxi industry would have answered this question on the eve of the launch of Uber? Nobody saw that disruption coming and therefore few (if any) were adequately prepared.

Disruptive change is nothing new, but the speed with which it can impact business models and revenue flows has certainly changed. While it took a decade for the personal computer to disrupt the computer industry, and years for digital photography to disrupt the film industry, it took less time for Netflix to put Blockbuster stores out of business. And how long did it take Airbnb to impact the hospitality industry or Uber to disrupt the taxi industry? These kinds of disruptions can happen virtually overnight, creating new ways of transacting business that can have a cascading impact on both front and back office applications.

This type of disruption might come from a variety of sources. We asked survey participants to select the single most likely cause of potential disruption (Figure 4).

Figure 4: What is most likely to cause this disruption?

Source: Mint Jutras 2016 Enterprise Solution Study

While the threat from new, innovative products may have the lesser disruptive impact on business processes and business models, it does require companies to place more emphasis on innovation. Windows of opportunity can open and close very quickly. Of course an agile ERP solution isn’t all you need to accelerate new product introductions, but you also don’t want it to be the reason you can’t respond to new market demands or take advantage of new and unprecedented opportunities.

New ways of selling/pricing existing products might include subscriptions to services or outcomes that replace outright sale of products. Rather than selling a machine, you might invoice for uptime or hours of production. You might ship a physical product for free and charge for usage and/or consumables. Software companies that used to offer perpetual licenses might now also (or instead) offer subscriptions to software as a service (SaaS). These types of changes can have a major impact on how you invoice, recognize revenue and manage cash. And these changes must be reflected in your ERP solution.

The impact of entirely new business models is even harder to predict because of the inherent “newness.” You don’t want your ERP solution to be the reason you can’t capitalize on that brilliant new idea that can create a new revenue stream. Your ERP must adapt as your business evolves.

And yet many hesitate to replace or upgrade aging solutions that have no hope of ever connecting with or leveraging the emerging digital technologies required to survive in today’s digital economy. Perhaps they are looking for proof they will not be taking a step backwards in moving to a newly developed solution. Indeed, there are some industries that may (still) be better served by some of its older, deeply entrenched products – industries like food and beverage or project-based businesses. These industries are still on the horizon for the Oracle Cloud solutions.

But perhaps the best customer reference for a wide range of industries comes from Oracle itself. The diversity of Oracle’s business is a testament to the breadth of the solution in a world of changing business models.  Oracles runs:

  • an on-premises software business
  • a subscription software business
  • a reasonably large consulting services business
  • a reasonably large, assemble-to-order, hardware business
  • a procure-to-order business for Micros on smaller machines

We wrap up with a quote from Mr. Miranda.

“We spent a ton of time combining feature functions we needed, technical innovations that either we built or the industry built, so now we have what we think is an extremely compelling, deeply functional, and differentiated solutions in just about every area: EPM, ERP certainly, now with Supply Chain Manufacturing as well…. Core HR including global core HR, benefits, payroll; and then CX being sales, service, marketing, both B2B marketing … and B2C marketing…. It is just an incredibly feature-rich area on top of those baseline components.”

The entirety of Oracle’s business runs on the same software in the cloud that all of its customers are running. That spells confidence and commitment.

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Plex Systems Accelerates Push Into IoT With DATTUS Acquisition

Customers: Prepare for a Tsunami of Data

On July 31, 2018 Plex Systems, a cloud ERP and MES solution provider for manufacturing, announced it had completed the acquisition of DATTUS, Inc. a leader in Industrial Internet of Things (IIoT) connectivity technologies. This is an important step in executing on its product strategy, which includes connecting to more IIoT data for more actionable insights, along with enhancing manufacturing and business processes.

As a solution provider of enterprise resource planning (ERP), the Plex Manufacturing Cloud provides the operational and transactional system of record of your business. But looking beyond business transactions, Plex’s goal has always been to connect the shop floor to the top floor. But that is often easier said than done.

While sensors, machines and equipment on the shop floor have been collecting vast volumes of operational data for decades now, that data has not always been “connected” or accessible for decision making. Indeed the very fact that this data collection has been happening for decades contributes to the problem. Many of the machines and software put in place decades ago pre-date the Internet and therefore have no ability to connect to a network. Retrofitting equipment or replacing it is expensive and most of these machines were designed to last a lifetime. Expensive custom integration projects are beyond the expertise and budgets of all but the largest manufacturers. So what’s the alternative?

Providing an alternative is what DATTUS is all about. DATTUS solutions connect manufacturing equipment and sensors to the cloud. Think of it as the bridge between you and your machines. The platform is a hardware/software combination, which collects data from PLCs, VFDs, industry protocols like MTConnect, and popular enterprise applications including Salesforce, SAP and (of course) Plex.

In addition to this plug and play connectivity, DATTUS also brings IIoT data management and industrial analytics. The data management and analytics capabilities previously offered by Plex were sufficient for managing the volumes of data within ERP. But as customers are empowered to bring almost any data stream into the Industrial Internet of Things, they now need to be prepared for a tsunami of data.

Giving Manufacturers a “Leg Up”

The IIoT is just one of several inter-related digital technologies we continue to watch, and what we most often see is limited progress being made in terms of leveraging these technologies. Our 2018 Mint Jutras Enterprise Solution study explored plans and investments in selected digital technologies normally associated with Industry 4.0. We find very low rates of adoption (Table 1) and many have no plans to change that. In spite of all the hype around all these technologies we confirmed many are still sitting on the sidelines of the latest manufacturing revolution.

Table 1: Digital Technologies Plans and Investments in Manufacturing

Source: 2018 Mint Jutras Enterprise Solution Study

*Includes those that expect vendors to deliver at no additional cost

Running legacy solutions based on outdated technology forcibly sidelines some. And others are hamstrung by decades-old equipment on their shop floors. Plex Systems’ acquisition of DATTUS can’t help with the first unless those running legacy solutions are willing to trade up to a more modern, technology-enabled solution. But it can help in connecting those disconnected machines.

While all adoption rates are quite low, we do find IoT has the lowest percentage of manufacturers with no plans and no activity and close to the highest percentage of those that have already made some investment (second only to 3D printing). This tells us manufacturers have at least a grasp of its potential. Indeed manufacturers have been collecting vast volumes of data from sensors on the shop floor for decades. And yet that data has gone largely underutilized because manufacturers fail to connect the data back to the enterprise applications, and the business decisions. And this is where DATTUS can open new doors.

Instead of retrofitting equipment or developing custom connections, the DATTUS platform provides “out-of-the-box” direct connectivity for machines using cellular capabilities. It can capture data from non-networked, discrete industrial assets while remaining agnostic to data type, machine protocol, and infrastructure. It is a hardware-agnostic IIoT solution that can reliably collect and manage data and make it available for further analysis and open doors to several other of the technologies listed in Table 1.

The availability of more data increases the need for analytics in order to make sense of it. The data within an ERP solution lends itself to historical reporting and perhaps even ad hoc queries. Both are designed to answer questions you already have. But where do you turn when it is not intuitively obvious which questions you should be asking in order to optimize production or grow your business?

Therein lies one of the primary differences between reporting and analytics. While reporting answers a series of pre-defined questions, the discovery process and the iterative nature of analytics helps you ask the right questions. Reporting helps you identify a problem. The right kind of analytics helps you avoid it. Reporting seldom helps you recognize an opportunity. Analytics help you seize it.

But as volumes of data start to grow exponentially, you eventually reach a point where the human mind is no longer able to assimilate and cope with that volume. This is where machine learning can add a level of intelligence that is simply not possible without technology. Data sets have grown rapidly in recent years, thanks, at least in part, to information-sensing devices such as those to which the DATTUS solutions connect.

And the shop floor provides us with some of the most often cited use cases for artificial intelligence and machine learning. The ability to constantly scan data collected by machinery and equipment on the shop floor, searching for patterns that have previously led to failures, have saved manufacturers countless hours (and costs) associated with preventive maintenance. By predicting failures, you only need to bring production to a halt to perform maintenance when it is really needed.

Similarly, in environments regulated by strict adherence to specifications, by monitoring sensor data continuously, machine learning can alert operators before out-of-spec product is made. While shop floor supervisors are only able to scan, monitor and cope with a limited amount of data, machine learning knows no such limitations. Machine learning can recognize patterns and correlate data points that a human does not recognize as relevant. And as more data is gathered, it keeps on learning. That is what continuous improvement is all about.

DATTUS adds capabilities for analytics on data-in-motion, quickly providing insights in support of decision making on the shop floor. This includes:

  • Anomaly detection (quality control)
  • Custom event rules
  • Real-time production and efficiency reports
  • Performance forecasting
  • Predictive analytics
  • Machine learning

As part of Plex Systems, we also see the potential of applying these industrial analytics capabilities to the business side of the equation within ERP for supply chain planning, financial planning and budgeting, forecasting and more. The possibilities are endless.

Mint Jutras believes these digital technologies are destined to be absorbed into the enterprise in general, and manufacturing in particular, in much the same way as technologies like artificial intelligence (AI) and natural language processing (NLP) have insinuated themselves into our personal lives.

Think about it. As consumers, we didn’t loudly voice our desire for AI or NLP. But that didn’t stop Apple from delivering Siri on an iPhone. Pretty soon Microsoft delivered Cortana on Windows 10; Google delivered Google Now; Amazon delivered Alexa and now Bixby is on your (newer) Samsung Galaxy. We see these digital technologies being absorbed into the manufacturing landscape in much the same way, as long as solution providers like Plex and DATTUS continue to innovate and push them into the mainstream.

Conclusion

While the technologies in Table 1 are typically outside the scope of ERP, in order for them to be truly transformative, they must interoperate and/or integrate with the enterprise applications like ERP in the front and back office. When purchased separately it is often a daunting task to connect back to ERP and in turn, the business itself. But without this connection, factories don’t get any smarter and neither do the leaders making business decisions. And that’s the real goal of digital transformation in manufacturing: a smart factory and smarter business decisions. And therefore this acquisition makes perfect (and practical) sense.

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Workday Family of Planning Applications Grows

Proposed Acquisition of Adaptive Insights

A couple of years back, in May 2016 Mint Jutras posed the question: Is Planning & Performance Management A Marriage Made In Heaven? We concluded that if you find the two live entirely separate lives, either consciously or unconsciously avoiding each other or (even worse) they are in a contentious relationship, perhaps it’s time for a divorce. Conversely, with the right solutions, you can marry actual performance to the plan, in all the relevant detail. And that plan can evolve over time to lead you down the most effective path to growth and profits. Ahhh… marital bliss!

That same year we reported on how Workday Brings the “Power Of One” To Planning and Analytics, having wedded the two by unifying financial and workforce planning with transactions in one cloud system. Organically built as part of the Workday system, the new (at the time) planning application was designed to simplify setup and support collaborative planning. Since then about 250 Workday customers have subscribed to the solution, but those customers and a maturing market is pushing for more. Workday’s recent announcement of its intent to acquire Adaptive Insights and its cloud-based platform for business planning signals a commitment to accelerate the delivery of exactly that – more and better planning.

From a Marriage, A Family Emerges

Any marriage starts off as a two-some, but marital bliss often results in a growing family. If we start off with the concept of marrying planning and performance management, the natural offspring would be the different components of planning. It all starts with a business plan, followed by financial planning, budgeting and workforce planning. Of course Workday could conceive, give birth to and nurture these different components through its own development efforts. But just as the capacity of two people to go forth and multiply is limited by the human gestation cycle, so is the ability of a software company limited by software development cycles. To grow a human family more quickly, couples might choose to adopt. To grow a software portfolio more quickly, companies might choose to acquire.

But if a company chooses the merger and acquisition (M&A) route, how does it ensure the product acquired doesn’t turn into the redheaded stepchild? This often happens because some companies aren’t very good at integrating acquired products and companies. However, Workday happens to do this very well.

Preserving the “Power of One”

Workday’s strength lies in what it calls the “power of one” – one code line, one security model, one mobile app, one data model, one user experience (UX), one platform, one version. And the “power of one” has already survived several acquisitions.

Workday’s acquisition of Identified in 2014 was an important step in incorporating predictive analytics and machine learning into its repertoire of capabilities. Identified’s patented SYMAN (Systematic Mass Normalization) technology mines Facebook for social data and then uses artificial intelligence to transform that data into professional intelligence. The machine learning comes from continued use, validating predictions with outcomes from Workday employee data on performance and retention.

After acquiring the technology in early 2014, Workday released Workday Talent Insights in 2015, identifying retention risk and delivering a talent scorecard. Workday learned that customers preferred an embedded experience, not a standalone application and that the overall user experience was key, along with access to data for training algorithms.

In 2015 it acquired Gridcraft and in 2016 it acquired Platfora. With both of these acquisitions, it has woven the technology into the fabric of its solution, rather than bolting on components. More recently it announced the acquisition of Rallyteam, for the express purpose of adding more intelligence to optimize talent. In its accompanying blog post Workday said:

“With Rallyteam, we gain incredible team members who created a talent mobility platform that uses machine learning to help companies better understand and optimize their workforces by matching a worker’s interests, skills, and connections with relevant jobs, projects, tasks, and people.”

It would appear that this acquisition was made for the express purpose of acquiring talent to accelerate its machine learning efforts, and therefore poses no threat to diminishing Workday’s power of one.

But the acquisition of Adaptive Insights is a different animal. Adaptive Insights has been a Workday certified partner since 2015 and the two companies have somewhere between 30 and 40 joint customers, so integration already exists. Workday has already stated it will harmonize the data models of the two solutions and Aneel Bhusri, co-founder and CEO of Workday is committed to applying the power of one. However this is a very small slice of the 3,800 Adaptive Insights customers and part of the mutual attraction between the two companies is their shared customer-centricity. The benefit to the Workday installed base is obvious. But it is unclear what impact this will have on and the potential benefit it will bring to the larger population of Adaptive Insights customers.

It is also too early to say exactly how and when Workday will preserve its power of one, although Mint Jutras suspects the two companies will be hard at work figuring that out even prior to the anticipation of closing the deal later this year. Workday has admitted in the past that bringing innovation and acquired technology to the (Workday) market has been slower than some might expect because additional care and effort is taken to embed innovation at the platform level. Again, the benefits to Workday customers is clear, but the impact on Adaptive Insight’s non-Workday customers is unclear.

Also unclear is the impact on any pre-existing partnerships Adaptive Insights has with other ERP players. One in particular, Plex Systems, will likely be preserved because of Workday’s existing partnership with Plex. The two solution providers partner to present a cohesive two-tier solution (Workday as the corporate financial and human capital management solution and Plex Systems at manufacturing subsidiaries), so a shared planning platform between corporate headquarters and subsidiaries could be a huge plus. Plex also runs Workday to manage its own (software) business.

Conclusion

The acquisition of Adaptive Insights appears to be mutually beneficial to both companies. Workday stands to accelerate its financial planning and budgeting roadmap while freeing up some of its current staff to concentrate more fully on the workforce planning aspects of its current planning solution – a particular strength of Workday. Adaptive Insights finds a home that is compatible with its employee and customer-centric values and will likely be able to come up market a bit.

There are still many outstanding questions as to how Workday will preserve its power of one, a key strength and differentiator. But both parties seem committed to the concept and we suspect they will be hard at work figuring it all out even before the ink is dry on the final deal.

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