manufacturing

IFS Helps Customers Accelerate Out of The Curve of Digital Transformation

Making Asset Intensive Industries Lighter on their Feet

Asset intensive industries are quite likely to be capital intensive industries. Cost of entry is steep, but once you are an established player, you are tempted to hit cruise control. Living in a world where product lifespans tend to be measured in decades, growth and change come slowly. Or at least that’s the way it used to be. The digital economy has thrown you a curve. And when you are speeding down the business highway, a serious curve causes you to hit the brakes in order to safely negotiate the turn. But if you are riding a performance engine, there is nothing more exhilarating than accelerating out of that curve.

Digital technologies of today, those that serve to connect operations, people and processes through the power of the Internet, fuel that performance engine. Eighty-two percent (82%) of manufacturers participating in the 2016 Mint Jutras Enterprise Solution Study agree and 86% understand that embracing digital technologies is necessary for survival. And yet, we find the vast majority still coasting or riding the brakes when it comes to digital transformation.

IFS, a global enterprise applications company specializing in solutions for asset intensive industries, is setting out to help its customers accelerate out of the curve. Asset intensive businesses are very likely to be sitting on vast amounts of data gathered from products, assets and equipment. Yet few are able to leverage it fully. IFS IoT Business Connector, recently introduced at the IFS World Conference 2016, helps bridge the gap between data collection and analysis and between analysis and action. Through plug and play connectivity with the Microsoft Azure IoT Suite, customers can identify actionable observations that can trigger user-defined, automated or semi-automated actions for predictive maintenance, service management, asset management and manufacturing.

Need a Little Push?

As noted above, the majority of manufacturers today have an appreciation for the significance of digital technologies. In our 2016 Mint Jutras Enterprise Solution Study we asked survey participants how much they agreed with various statements about these new, advanced technologies (Table 1).

Table 1: How strongly do you agree or disagree with the following?

ifs-table1Source: Mint Jutras 2016 Enterprise Solution Study

Only 3% to 6% disagreed at all with any of the statements above and a relatively small percentage was neutral. The majority of manufacturers understand that digital technologies can be truly transformative. This data is consistent with data collected by IFS from its customers on perceptions about the Internet of Things (IoT) in particular. According to IFS, 86% of its installed base realize the importance of IoT, but 40% have no IoT strategy in place.

Mint Jutras actually finds these findings refreshingly candid. When we asked survey respondents how well prepared they were for the digital economy, we found a high level of confidence, with over half (58%) of all respondents indicating they were very well-prepared or at least close. And manufacturers claimed to be even more well prepared (Figure 1).

Figure 1: How well prepared are you for the digital economy?

ifs-fig-1Source: Mint Jutras 2016 Enterprise Solution Study

Yet subsequent questions about digital systems of record, as well as how activities were monitored, managed and performed, proved otherwise. The vast majority were found to still rely, at least partially, on spreadsheets, paper and manual processes. This not only indicates that many, manufacturers in particular, overestimate their level of preparedness and underestimate the impact digital technologies can and should have on the enterprise applications that are used to run the business, as well as the business itself.

Those in asset intensive industries are perhaps even slower to respond. Because their businesses tend to be more capital-intensive, they can’t turn on a dime like those businesses that require less capital for growth and change, thereby making them lighter on their feet.

So what is IFS doing to make them lighter on their feet and more nimble?

Cloud Helps

First of all, we see IFS offering cloud options. Many of these businesses require capital to be invested in assets necessary to run their businesses. By running IFS enterprise resource planning (ERP), field service management (FSM) and enterprise asset management (EAM) solutions in the cloud, they lighten the load of capital required to manage back office and front office processes. Indeed IFS reports that 34% of new business closed is now cloud-based and running on the Microsoft Azure platform.

While preferences and perceptions vary quite significantly across the different regions in which IFS operates, at least within the United States Mint Jutras research finds software as a service (SaaS) is the most preferred option for new deployments. However, we expect the worldwide market will be in transition for the next ten years or more. This is partially because the United States tends to lead the world, and partially because there are simply so many on-premise deployments today. The inertia that keeps manufacturers from actively researching and investigating new technologies is the same inertia that keeps these solutions in place long after their glory years. IFS addresses this by providing multiple deployment options and also by adding other solutions that allow customers to make strides in digital transformation while leaving existing solutions in place.

Cloud-based IFS IoT Business Connector will play an important role, but perhaps equally important is IFS Enterprise Operational Intelligence (EOI), to which it is connected.

IFS IoT Business Connector

According to IFS, “IFS IoT Business Connector turns IoT insights into actions in IFS Applications” (including ERP, FSM and EOI). The goal is to observe the environment and turn perceived challenges into opportunities – a lofty goal. But what is it and how does it do that?

Before we answer that question, it is important to understand the different steps the IFS IoT Business Connector facilitates in order to transform challenges faced into opportunities for growth and improvement.

Data, Devices and Communication

The first step is in collecting the data itself. This might be done through sensors on assets or equipment on the plant floor or in products in the field. This is not especially new in the world of manufacturing and/or field service maintenance. Often data comes through:

  • supervisory control and data acquisition (SCADA) systems used for remote monitoring and control
  • programmable logic controllers (PLCs) for the control of manufacturing processes, or any activity that requires high reliability and process fault diagnosis
  • OLE (object linking and embedding) for Process Control (OPC), which is a series of standards and specifications for industrial communication of real-time plant data between control devices.

The connections might be made through local network protocols or Internet communication. It has never been hard to collect millions or even billions of sensor readings. The IFS IoT Business Connector isn’t about the data collection. It is more about connecting that data to make better use of it, in real-time where appropriate.

Discovery

In order to take full advantage of the data collected, it is necessary to go through a discovery phase. The IFS IoT Discovery Manager (a component of IFS IoT Business Connector) provides additional management and monitoring capabilities when using Microsoft Azure IoT Suite as the discovery platform.  It automates the creation and connection of all IoT Suite components (hubs, streams, buses etc.) in accordance with the IFS IoT Business Connector reference architecture.

However, it is important to note that Microsoft Azure IoT Suite is not a mandated requirement. A customer may use a different solution for discovery, in which case IFS provides an API (application programming interface) to receive observations to be used in subsequent steps of the process.

Operationalizing the Data

IFS IoT Discovery Manager can receive and store thousands, or even hundreds of thousands of “observations.” But how do you interpret what the data is telling you? In order to operationalize the data, you need to be able to take action.

You will want to analyze data streams in real time in order to mine the data to help you discover potential problems and/or opportunities. You will want to apply some sort of decision-making algorithms that work 24/7, even when humans are asleep, sick or busy with other value-add tasks. And finally you will want to visualize the data, presenting it in a way that highlights issues, both good and bad, quickly.

Often the action taken must be recorded or reflected in the enterprise software that is running your business. The IFS IoT Gateway (another component of IFS IoT Business Connector) enables communications between the cloud-based discovery and analytics of IoT data and the on-premise or cloud-based IFS applications.

The failure of a door to open on public transportation can trigger a service call. A pest trap that is full and requires emptying can alert a service engineer in a pest control company. Variations in vibration, temperature or voltage of a piece of equipment can send a warning signal that results in a call to a maintenance company during off hours, preventing a halt to production. These are just three examples of how early adopters of IFS IoT Business Connector are looking to operationalize the data collected, either with the help of human review and augmentation or through (prescriptive) automated actions, or both.

Business Optimization

But the real results will come only when you effectively use the data, discovery and operations to optimize your business. That means monetizing it to develop new sources of revenue. That may require a different way of thinking. Even companies that have exclusively made money from making and moving product in the past, will likely find new revenue streams through services and/or data. IFS likes to call it the “servitization” of business. Whether you replace or supplement your product sales, new revenue opportunities can come from maintenance or consulting services, software (as a service) or even outcomes like hours of successful operation or output.

IFS IoT Controller (the third component of IFS IoT Business Connector) helps you determine what actions to take based on the analysis of observations about your business. It helps you map your operational technology to your business applications like ERP.

Cascading Effect on Business Applications

However, the connection back to ERP (and perhaps other applications like Field Service) might not be so intuitive. New sources of revenue might require new methods of invoicing and revenue recognition. It is one thing to ship and invoice for a physical product, but quite another to create invoices (and recognize revenue) for services and/or subscriptions.

Guessing how new business models will impact invoicing, revenue and cash is just that – a guess. As the digital economy also becomes the subscription economy, companies today need to be able to handle new and different revenue streams, often in conjunction with more traditional ones. And with the upcoming changes to revenue recognition as a result of the merging of accounting standards (ASC and IFRS), this places new functional requirements on ERP.

Changes to existing accounting software are not insignificant. In fact, they can be quite extensive. IFS is still working on these changes, but with an eye towards the 2018 deadline for implementing new rules.

Apart from these (very specific) accounting requirements, the real key to business optimization lies just beyond the scope of the IFS IoT Business Connector. As we mentioned earlier, equally, if not more importantly, is enterprise operational intelligence. Notice the lack of capitalization. In this case we use the phrase as a goal. Hopefully we don’t confuse our audience in saying IFS Enterprise Operational Intelligence or EOI is the means to this end (goal). The level of importance of EOI is further amplified in that it is one of those solutions that helps customers take those transformative first steps without requiring the full-scale replacement of ERP.

IFS Enterprise Operational Intelligence (EOI)

IFS describes EOI as the the key that unlocks intelligent business operations for its customers, “integrating real-time analytics into business processes to empower organizations to make better, faster decisions based on [their] strategic objectives.” Of course analytics are becoming much more mainstream today, but there are two differentiators here – strategy and action.

The first is that last qualifier, linking analytics to strategy. This starts with the first of three core steps: Map, monitor and manage.

  • Map: capturing and visualizing the business model, which of course is subject to change much more frequently than in days gone by, due to the potentially disruptive nature of digital technologies.
  • Monitor: connecting and visualling performance. After mapping the business, you then connect various data sources, including IFS applications, the IoT, other databases and applications and even Excel spreadsheets. These are presented in “cockpits.” These are more than just pretty charts on a dashboard. IFS distinguishes these from your typical (passive) dashboard by allowing you to take action right from the cockpit.
  • Manage: analyzing and improving business operations. IFS has embraced continuous improvement methodologies including PDCA (plan–do–check–act or plan–do–check–adjust) and OODA (the decision cycle of observe-orient-decide-act).

Customers using EOI prefer embedding this type of solution into their IFS enterprise applications rather than purchasing separate business intelligence (BI) and/or business process management (BPM) solutions that either run stand-alone or must be custom-integrated into the solutions that run their businesses. But even more importantly, it allows them to take some incremental steps in digitally transforming their businesses, without the major disruption of a full-scale upgrade or replacement.

Wrap Up

It seems quite appropriate that IFS’s recent marketing efforts have led the company to sponsor a Formula One racing team. Earlier this year IFS announced it had become a Principal Partner of the Sauber F1 Team for the 2016 FIA Formula One Championship. Why is it appropriate? According to Mark Boulton, chief marketing officer of IFS, “This new partnership between IFS and the Sauber F1 Team is based on strong foundations, as both companies are commited to innovation, focused on design, and treasure the power of effective teamwork. It’s these qualities that … are lived by our employees and partners every day as we continue to empower our growing global customer base with IFS’s leading software and solutions.”

Mint Jutras agrees that IFS has built a strong foundation, but more importantly, one which helps customers face those upcoming curves in the road caused by the looming inevitability of digital disruption. Just as you don’t want to be changing the tires (or the engine) while you are speeding down the road, IFS customers won’t want or need to switch out the engine that powers their businesses, nor will they be blindly steering into those turns.

IFS Enterprise Operational Intelligence (EOI) can put them in the cockpit and IFS IoT Business Connector can keep them connected to the data they need to make the decisions required to accelerate out of the curve.

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SYSPRO Delivers on the Practical Side of Digital Technologies

Bringing Technology, People and Processes Together In a Winning Combination

Advanced technologies and automation have been transforming manufacturing and distribution for decades now. Through these advances we have streamlined production and eliminated waste and variability. We make products better and faster. But the digital technologies of today, those that serve to connect operations, people and processes through the power of the Internet, have the potential of fundamentally changing the way we do business. Eighty-two percent (82%) of manufacturers participating in the 2016 Mint Jutras Enterprise Solution Study agree and 86% understand that embracing digital technologies is necessary for survival.

And yet few manufacturers seem to fully grasp the potential digital technologies have to truly change the game. In some ways, this is perfectly understandable. While we are constantly bombarded with examples of how digital technologies can transform our world, most of the examples fall into the category of consumer technology (social, home, shopping, fitness…). The reference to this technology in the context of the enterprise is very often at a level of abstraction that leaves down-to-earth manufacturers either scratching their collective heads or thinking it is way beyond their reach. While we might buy the latest consumer gadget just because we can, manufacturers and distributors make investment decisions with their feet planted firmly on the ground.

This is why SYSPRO is announcing six new capabilities that help manufacturers and distributors take practical advantage of advanced digital technologies. If you are one of these pragmatic individuals, you might be so busy dealing with day-to-day challenges that you let inertia keep you mired in spreadsheets and paper. If so, you’re not alone. But don’t let that stop you. SYSPRO’s new advanced capabilities might be just what you need to justify that leap into digital transformation.

Do Manufacturers and Distributors Care?

As noted above, the majority of manufacturers and distributors today have an appreciation for the significance of digital technologies. In our 2016 Mint Jutras Enterprise Solution Study we asked survey participants how much they agreed with various statements about these new, advanced technologies (Table 1).

Table 1: How strongly do you agree or disagree with the following?

syspro-table-3Source: Mint Jutras 2016 Enterprise Solution Study

Only 3% to 6% disagreed at all with any of the statements above and a relatively small percentage was neutral. The majority of those in manufacturing and distribution companies today understand that digital technologies can not only facilitate the connection between companies, people and processes, but can also automate the connection between different enterprise systems. Whether this is a continuation of your current plans for information technology (IT) and/or automation, or a brand new direction, you need to implement them in order to forge that connection. While 86% agree these technologies are necessary for basic survival, we find evidence they have not been embraced with the level of priority and urgency that will give companies a competitive advantage.

Table 2: To what extent are these activities performed/managed digitally?

syspro-table-2Source: Mint Jutras 2016 Enterprise Solution Study

Table 2 is a sad reminder of the continued prevalence of spreadsheets and paper. Of course some use of spreadsheets is simply the result of familiarity and comfort level. But that doesn’t make it any less troublesome or the data any more real-time.

Come to find out, SYSPRO USA also gathered its own intelligence on this topic through one of its SNAP surveys, sent to its own customers. From this latest poll, SYSPRO concluded, “Companies are confused or have never heard about the newest, high-impact technologies.” This conclusion was based on the question: “Have you read or heard about [insert technology]?” The technologies included were predictive analytics, the Internet of Things (IoT) and bots. In each case, less than half (about 45%) said “Yes.” The remainder said, “No, I don’t know” or, in the case of bots, “Not sure.”

While this actually could help explain this lack of urgency, Mint Jutras interprets the answers a little differently. Individuals may be confused, but more likely these responses indicate they simply are not paying attention and therefore don’t make the connection between problems and challenges faced and digital technologies. For those that follow technology trends closely, the hype over digital technologies is impossible to miss. But your typical manufacturing or distribution professionals are far less likely to follow technology just for the sake of technology. They are far too busy fighting those pesky fires on a day to day basis.

Talking about predictive analytics won’t get their attention. Talking about ways to better forecast demand or predict revenue and profits might. Connecting the dots is not only practical, but also a winning combination.

Discussing the Internet of Things is an intellectual discussion. Suggesting ways to make better use of data captured today on the shop floor (i.e. through the IoT), whether it is for the purpose of increasing throughput or quality or customer service, is not only practical, but also a winning combination.

Bots in general still seem quite futuristic and “pie in the sky” to many, in spite of the fact that all kinds of production and material handling automation is already quite prevalent in many manufacturing and distribution companies. But investment in that kind of automation has traditionally been expressly for the purpose of making and/or moving more product, better and faster, not making the business itself, or the people that run it any more productive or efficient. But think about where supervisors and managers can be the most effective – not sitting at their desks, but out on the floor. The problem in the past arose from the fact that as soon as they leave the comfort of their offices and venture out on the floor, they have been instantly disconnected from enterprise data. Demonstrating how communicating with devices in a hands-free manner can facilitate control and decision-making is not only practical, but also a winning combination.

That’s really what SYSPRO’s new capabilities are all about: practical ways of bringing technology, people and processes together in a winning combination.

SYSPRO’s New Digital Capabilities

So what are these new capabilities? They combine the power of digital technologies with analytics, cloud deployment, big data and some other cool, high-impact technologies like that used for facial recognition. But think beyond faces; think about blemishes on raw ingredients, components or fabricated products. Here’s the rundown:

SYSPRO Azure Cloud Platform

SYSPRO has teamed up with Microsoft to deliver infrastructure as a service (IaaS) now and platform as a service (PaaS) in 2017. SYSPRO’s ERP will be delivered in the Azure cloud in 2016, but will also move beyond this to deliver the SYSPRO Azure Operation Center. This is more than just a data center. It will be staffed with SYSPRO employees that will provide managed services to assist companies looking to move from on-premise to cloud deployments. Early on SYSPRO customers may want to lift and shift from existing on-premise deployment and then move more fully into a SaaS environment in order to take full advantage of software as a service (SaaS). But these SYSPRO employees will also be available for new installations and will be armed with templates and tools for rapid deployment.

Additional services offered will include backups of course, but also system monitoring, incident management, disaster recovery and high availability (think automatic rollover and scaling).

Mint Jutras research finds SaaS deployment is the most preferred option for new deployments, but the market will be in transition for the next ten years or more because there are simply so many on-premise deployments today. The inertia that keeps manufacturers and distributors from actively researching and investigating new technologies is the same inertia that keeps these solutions in place long after their glory years. SYSPRO can help make that transition smoother and more appealing.

SYSPRO Harmony

SYSPRO describes this as a “cloud-based multi-user experience platform that unites social media capabilities, internal/external collaboration, machine learning, cognitive services and data analytics into a single offering for accomplishing targeted or highly complex tasks.” That’s a mouthful. What does it really mean?

To the manufacturing or distribution professional who might think “social” is something employees should do on their own free time, think of it more as an application that lets you keep your finger on the pulse of all the “stuff” going on concerning your production, orders, operations and finances.

Many business leaders in manufacturing and distribution companies downplay the importance of “social” capabilities, equating them to social media. But when we break down the really useful capabilities, and don’t necessarily label them as “social” we get a very different response. Suddenly these concepts become useful or even “must have!”

Table 3: Would these capabilities be useful? Shhh… don’t call them “social”

syspro-table-1Source: Mint Jutras 2016 Enterprise Solution Study

If you aren’t already a fan of “social” the concept of “following” might not seem familiar to you. But chances are, you are already following someone or something either in your professional or personal life. Perhaps you follow the stock price of specific companies, or you watch a stock exchange like NASDAQ or the Nikkei. Or maybe you follow the stats of your favorite sports teams. Maybe you do that through newspapers, online or using an app on your mobile device. Perhaps newsfeeds are delivered to you through email. Regardless of the delivery method, the objective is to stay informed.

What if you could easily apply that same concept to your customers, orders or prospects? Perhaps you need to keep tabs on that big deal you hope to close by the end of the quarter. Wouldn’t it also be helpful to “follow” the trail of activity that has already occurred during the sales cycle? What if you could see the conversations or chatter between sales rep and manager? What documents have been delivered to the prospect? And what if this potential deal is with an existing customer? Wouldn’t you like to be able to scroll through the support activity over the past few months, including the calls, issues, resolutions? Has the customer experienced any quality or delivery issues? Have they been consistently paying their bills on time or is their outstanding balance over 90 days?

And what if all that activity was collected for you and presented in a single stream? The result of monitoring these types of activity streams is fewer surprises and more proactive versus reactive management. And to present this coherently you need a “consumer grade” user interface. This is what SYSPRO Harmony is all about.

SYSPRO Predictive Search

Enterprise search capabilities should be quite self-explanatory, but don’t mistake just any kind of current search capability for a true enterprise search. Of course you can look up a part by its description or a customer number by the customer’s name. ERP solutions have had this kind of search capability since the 1990’s. But can you search across your entire enterprise database for any reference to a particular customer, including contacts, conversations, sales orders, invoices, dunning notices, cash receipts? It’s not entirely clear when “Google” became a verb, but can you “Google” your customer and include the data in your ERP?

SYSPRO’s Predictive Search can be used to search like this within the confines of your ERP. It is predictive just like your consumer device or your productivity tools (think email and messaging) are predictive. You start typing and it anticipates what you are looking for. And best of all, it puts that search into a specific context of a customer or an order or any relevant business object.

SYSPRO BOTS

Sometimes you might think when you are looking for an answer to your question, “Wouldn’t it be nice if I could just ask for something in plain English?” Many smart phones today allow you to do just that, using voice activated commands. You say, “Hey Siri” and an automated bot responds. With SYSPRO Bots, you initiate a similar conversation with, “Hey chatbot.” And guess who and what is at your service? It is actually a self-service agent lurking in the background, one that never needs a coffe break or a day off.

SYSPRO Webviews (User Interface)

SYSPRO has completely rethought dashboards, making them configurable to the extent that a single individual can construct his or her own “single view” of the world. Tailorable by power users (without the assistance of a developer), the traditional “read only” view of the world becomes interactive. For example, an order can be released from a dashboard via a single click – no need to open it up, browse through and then take action.

The Age of Digital Disruption

Eighty-one percent (81%) of manufacturers and distributors agree that embracing digital technologies will give them a competitive advantage. And yet 77% to 91% still rely at least partially on spreadsheets or (even worse) manual efforts to plan and manage activities. This is a far cry from “embracing” digital. So what are they waiting for? What are you waiting for?

The Internet levels the playing field in our global economy, allowing companies of any size to establish a presence and compete on a global basis. That’s the good news. The bad news is that those same windows of opportunity you might encounter, are also open to your competitors. And those competitors come in many different shapes and sizes. So as you take your place on the world stage, be careful what you wish for. The enterprise applications that got you where you are today simply may not be able to take you where you need to go. In order to participate and become a real player, you need to embrace the cloud and take advantage of digital technologies in many different shapes and forms.

The age of digital disruption is upon us. As a result, you better be pretty flexible in terms of where you want – and need – to go. Giving examples like Uber, which disrupted the taxi industry, Airbnb, which disrupted hospitality and Netflix and iTunes, which disrupted entertainment, we asked our 2016 Mint Jutras Enterprise Solution Study participants, “How much risk do you face in your industry being disrupted?” Figure 1 shows the majority (79%) peg the risk as low to medium. But how do you think the taxi industry would have responded shortly before Uber came on the scene? These kinds of game-changing disruptions can occur right out of the blue. Are you ready? Would you survive?

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

syspro-fig-1Source: Mint Jutras 2016 Enterprise Solution Study

What will be the compelling events that drive this disruption? Will it come from the introduction of new products or from new ways of selling/pricing existing products, or entirely new business models? Or might it come from some combination of sources, making it even more unpredictable?

Are You Listening?

Manufacturers and distributors face difficult challenges, not only in the possibility of disruption, but just in dealing with the increasing complexities of an already complex world. You don’t have time to constantly surf the web and other information sources looking for that one new digital technology that just might change the game (and your life). So in keeping abreast of new, potentially high-impact technologies, select your source carefully. SYSPRO has the practical experience, the vision, the expertise and the platform to deliver. If you are looking to better embrace digital technologies for practical use, to connect enterprise systems directly to people and processes, to gain a competitive advantage… SYSPRO speaks your language.

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Plex Systems Hits the Acquisition Trail

Earlier this month Plex Systems announced its first (ever) acquisition. On August 9, 2016, Plex revealed it had acquired DemandCaster, essentially stretching the end points of its end-to-end cloud-based solution for manufacturers. Adding DemandCaster’s Supply Chain Planning (SCP) solutions to its enterprise resource planning (ERP) and manufacturing execution system (MES) means Plex now has the most complete suite of products of any independent cloud-native solution provider targeting manufacturing.

As I noted in a recent post, there are several reasons for one company to acquire another, one of which being to:

Fill a product gap: It can be far easier to acquire functionality than to develop it yourself. This can make the company more competitive, provide cross-sell and up-sell opportunity, or both. But don’t assume there is any M&A pixie dust that will magically integrate products overnight.

This is clearly Plex’s intent here, adding SCP to an already robust ERP and MES offering. But in this case, no M&A pixie dust is required. Plex and DemandCaster have been partnering together for about a year and already 10 out of DemandCaster’s 50 customers are also Plex customers. The integration is complete and bidirectional.

Partnering turned out to be a great way for the two companies to get to know each other and Plex was already positioning (and white labeling) DemandCaster as its answer to supply chain planning, sales and operation planning (S&OP), practical forecasting and demand planning, distribution requirements planning (DRP) and multi-site master production scheduling (MPS).

The solution, which is based on Microsoft technology, is highly graphical and was built from scratch as a multi-tenant SaaS solution. And the functionality is 100% complementary. The company is based in Chicago, but has a team of developers in Bulgaria, which could prove to be an additional plus in being a great entry point for Plex in attacking the eastern European market.

While acquisitions have a tendency to cause disruption, fear, uncertainty and doubt, if there ever was one immune to that disruption, this is the one. The entire staff of DemandCaster, including founder and CEO Ara Surenian, will come on board as Plex employees. Customers should only see a continuation (or perhaps strengthening) of their relationship. There is no sales staff to integrate. Previously DemandCaster was sold online with a “try before you buy” approach, with a little product evangelism thrown in. Plex intends to leave that channel open. Who knows, other (ERP and MES) sales efforts might even benefit.

Plex should also benefit from being able to natively satisfy the needs of larger, multi-national, multi-site manufacturing enterprises. The largest DemandCaster customer already handles over 300,000 individual SKUs. This could help Plex move up market and DemandCaster will also provide an additional entry point into Plex prospects.

Plex will also continue to make DemandCaster available as a “stand-alone” solution. We use the term loosely because DemandCaster alone is pretty useless unless it is tied back to an ERP. DemandCaster handles the integration by placing a very simple piece of software on the customer’s system. No APIs or web services required. Of the 40 nonPlex customers, DemandCaster already successfully interoperates with 18 different ERP solutions. So who knows, this might even be a “land and expand” opportunity for Plex to lead with SCP and eventually replace an incumbent ERP.

As acquisitions go, this one seems to be nice and neat and clean – adjectives rarely used in the same sentence as M&A. Kudos to Plex Systems for starting small but knocking one out of the park!

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QAD Channel Islands: Multiple Stops on the Journey to the Effective Enterprise

QAD defines the Effective Enterprise as one “where business processes are operating at peak efficiency and perfectly aligned with strategic goals.” Yet given the ever-accelerating pace of change in our world today, QAD also recognizes that the Effective Enterprise is more of a journey than a destination. The journey is one of continuous improvement and carefully balanced objectives.

The same could be said for the software that runs the business. Which is why its “Channel Islands” initiative is divided into milestones that have QAD (figuratively) hopping from one island to the next. A year ago it released Anacapa and this year Santa Cruz is ready for early adopters. Next year, it will navigate to Santa Rosa and in 2018, San Miguel. With two releases a year planned, chances are San Miguel will simply be another stop along the never-ending journey, but by then QAD will likely be on to other additional adventures suitable to whatever the future might bring.

Channel Islands: An Appropriate Metaphor

In the meantime, QAD appears to have chosen the name of its latest initiative well. QAD’s Channel Islands initiative has a dual purpose. The metaphor is perfect because the first goal of the initiative is to re-invent the entire user experience of QAD ERP, making it more natural (intuitive), visually appealing and easy to use. The Channel Islands of California are a chain of eight islands located in the Pacific Ocean off the coast of southern California along the Santa Barbara Channel near QAD headquarters. The main attraction of the real Channel Islands is their natural beauty, providing relief from the cluttered, hard-to-navigate urban setting.

But the second goal of the initiative makes it even more appropriate. The islands are divided into two groups—the Northern Channel Islands and the Southern Channel Islands. The four Northern Islands used to be a single landmass, but as water levels rose (thousands of years ago), Anacapa, Santa Cruz, Santa Rosa and San Miguel emerged and evolved as separate islands. While QAD ERP was originally developed as a single, tightly integrated solution that needed to move forward in lock step, the goal now is to support more modular upgrades, allowing different modules and disciplines (think finance versus purchasing or production) to move forward independently at their own pace. Mint Jutras often refers to this approach as “loosely coupled” versus tightly integrated, but it should not be confused with a collection of point solutions with arm’s length interfaces. Just like the Northern Islands, under the surface all these different functional areas are still connected.

In fact that was why QAD named the first phase Anacapa. Of the four Northern Channel Islands, Anacapa appears to be the smallest, but in fact has an enormous land mass hidden under the surface of the water. This is representative of the work done to re-architect the underlying infrastructure, reworking the application programming interface (API) structure and protocols, and future proofing the user interface (UI), including the framework for connecting devices. This supports the theory that sometimes the best UI is no UI at all and paves the way for succeeding phases (Islands).

To better understand how QAD is delivering on this modular upgrade approach as well as a new and improved user experience, read the full report (no registration required):

QAD Channel Islands: Multiple Stops on the Journey to the Effective Enterprise

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Women in Manufacturing & Technology At PowerPlex 2016

I recently had the opportunity to participate in Plex Systems’ second annual Women in Manufacturing and Technology Forum. Held at PowerPlex 2016, Plex’s annual user conference, this year’s forum brought together over 85 women, providing an opportunity for networking and discussion. Plex also put together a moderated panel (on which I was honored to sit) to kick off the discussion. But in spite of the name of the forum, the topic of discussion wasn’t manufacturing or technology, but rather the challenges women face in working in what is still very much a man’s world.

So if the discussion didn’t touch on manufacturing or the Plex Manufacturing Cloud, or any kind of software for that matter, why did Plex do this? I believe it is ultimately because Plex cares deeply about its customers and their success. The depth of interest is evident in the level of customer engagement that strikes me as exceptional every time I meet Plex customers or attend one of its events. And while the software is the focal point of the engagement, customer success is always a combination of people, process and technology.

On the people side, amidst an overall skills shortage in manufacturing, women have so much to offer. Yet while our ranks are growing slowly, we remain a small minority. It is very challenging for a woman to get ahead and make it to the top and we need to support each other along the way. The best way to accelerate gender diversity in the worlds of manufacturing and technology is to create a supportive environment and highlight success. In the famous words of former U.S. Secretary of State Madeline Albright, “There should be a special place in hell for women that don’t help other women.”

Plex happens to have some great role models, with three women among its C-level executives: Heidi Melin, Chief Marketing Officer, Lilian Reaume, Chief Human Resource Officer and Elisa Lee, Chief Legal Counsel. These three women actively sponsored the forum. I applaud them for that. I would also like to share with everyone a couple of the main themes we discussed, as there are some good lessons both men and women can carry away from them.

Don’t Limit Yourself

While some women are indeed shattering the “glass ceiling” today, many (not all) of the limitations that hold others back are self-imposed. While no two women are exactly alike (just as no two men are), when asked to rate themselves on skills and accomplishments, women tend to under-estimate their own effectiveness, while men tend to over-estimate theirs. A woman will say she is good at A, okay at B and has never done C. A man with the same skill set will say he excels at A and B and could very easily learn C. It’s all about the presentation and the self-confidence with which it is presented. I am not advocating for shameless self-promotion, but whether this reticence stems from a lack of confidence or an overactive sense of modesty, it is equally detrimental in seeking advancement as it is in interviewing for a new job.

Believe in Yourself, But Don’t be Afraid to Ask for Help

If you are a woman and have trouble believing in yourself, you’re not alone. Many of the most successful women in the world today grew up believing they could do anything they set out to do. Very often they had the support of family or an early mentor who encouraged them to pursue their dreams.

I had the opportunity to hear Dr. Condoleeza Rice speak recently and walked away with a quote that I think is priceless. She was talking about growing up with the support of her parents. Dr. Rice and I are about the same age. But while I had the advantage in the 1950’s of growing up white in the northeast, she was a little black girl in Birmingham, Alabama where segregation was the norm. And yet she said, “Somehow my father believed that the little black girl that couldn’t order a hamburger at the lunch counter at Woolworth’s, could grow up to be the president of the United States.” That belief system carried Dr. Rice very far.

But just as many women (probably more) didn’t have that level of encouragement growing up and still don’t have it today. But it’s never too late. Seek out that encouragement. It doesn’t have to come from another woman, but it should be someone who is successful in his or her own right, either in business or just in life.

Be Yourself

One of the most common mistakes women make in entering a man’s world is trying to think, behave, act or communicate like a man. A piece of advice from someone who has worked in a man’s world for over 40 years … Don’t. Yes, develop your ability to think, analyze and be decisive. Yes, work on your communication skills, both listening and speaking. Yes, be conscious of how you come across (confidently or defensively). The list of skills you should develop will vary based on your role. Regardless of your role, trust me, it will be long. But as you work on that list, work just as hard to be yourself. Don’t try to be a man. It’s OK – even good – to be a woman in a man’s world as long as you remain you. If you haven’t figured out who that is yet, don’t worry, you will. I may not see it before I retire, but if we all do that, perhaps the man’s world will indeed give way to a world of diversity.

 

 

 

 

 

 

 

 

 

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Epicor Announces It Will Grow Business, Not Software

Epicor has a new tag line: “[We] grow business, not software.” The declaration is not quite as radical as it would first appear. In fact it appears to me to be much more evolutionary than revolutionary.

Epicor’s mantra for years was “Protect, Extend, Converge.” As in:

  • Protect its customers
  • Extend its solutions
  • Converge its product lines

However, in 2014 it appeared Epicor was diverging a bit from the convergence strategy, primarily as a result of the merger of (the original) Epicor and Activant. Both had grown through acquisition, but while Epicor’s ERP solutions were multi-purpose ERP (focused primarily on discrete manufacturing) and therefore ripe for rationalization, each of Activant’s products was purpose-built for distribution, and over time each had become even more focused and fine-tuned to specific segments of wholesale distribution. And then there was the SolarSoft acquisition (2012), which brought along an ERP which focused on more process-oriented industries, and also a “best of breed” manufacturing execution system (MES). And finally there was Epicor’s retail business, which was actually spun off last year.

So while the “Protect” and “Extend” sentiments of the message are still very much alive, convergence gave way to a new message. Last year, Epicor’s (new) CEO, Joe Cowan declared the company would be “totally focused on the customer.” This year’s tag line seems to me to be a simple extension of that customer focus. Software is not the end goal. The goal is to help Epicor customers grow their businesses. It just so happens Epicor will develop software and provide services to make that happen. And a lot of the software will be delivered as a service, as evidenced by the appearance of a fluffy white cloud in the middle of the tag line.

Epicor tag line

Of course in having a tag line like this, Epicor needs to be careful not to make the message itself too fluffy. And in promising to help customers grow, Epicor will have to execute a delicate balancing act, balancing what the customers say they want and what Epicor knows they need. This is particularly true of those customers still running older legacy solutions. Epicor has promised not to sunset those products. And yet if you really understand the demands and opportunities of the new global, digital economy, you know you can’t be competitive without modern, advanced technologies.

Customers running legacy solutions won’t benefit as much from the latest and greatest development, but that’s not to say they won’t benefit at all. Epicor has been a bit quiet on the technology front for the past few years, but that is not the result of lack of attention. In fact it has been doing a lot, sometimes at the expense of new features and functions. Its advanced technology architecture (ICE), visionary at the time of its initial release circa 2009, has undergone a technology refresh of its own, and it also paves the way forward for both strategic products like Epicor 10, Prophet 21 and others, as well as legacy solutions like Vista and Vantage,  etc.

Now that that refresh is complete (for now… after all, technology continues to advance at an ever-accelerating pace), you’ll see more aggressive development of features and functions. Epicor is picking up the cadence of releases, shooting for twice a year (spring and fall) for its strategic products, which of course will garner more of its resources. But even legacy solutions will benefit from the development of external components, which can be used across different product lines. Prime examples include web portals, dashboards, self-service functions, mobile apps and other new features. And developing these components as web-based services (delivered through the cloud) will have the dual purpose of extending solutions and gently pushing those running primarily (or exclusively) on-premise towards the cloud.

I agree with Epicor’s new CTO, Himanshu Palsule, who called the transition to the cloud “inevitable.” But it won’t happen overnight (Figure 1). Part of the reason for this slower, yet steady growth is the fact that there are so many on-premise solutions in production today. And many remain reluctant to simply rip and replace solutions that are essentially getting the job done.

Figure 1: What percentage of your business software is deployed as SaaS?

Fig 1 EpicorSource: Mint Jutras 2016 Enterprise Solution Study

In his main stage keynote, Himanshu also (very astutely) observed that for a topic that is so widely discussed, “cloud” is still misunderstood and means different things to different people. My research supports his observation. While many use the terms cloud and SaaS interchangeably (I find myself guilty of this at times), they are not the same. While all SaaS is cloud, not all cloud is SaaS. While only a small percentage (12%) in 2015 didn’t know how they preferred cloud to be delivered, that percentage didn’t shrink in 2016 (Figure 2). There is still some education to be done. If you count yourself among those that “don’t know,” don’t be afraid to ask. You’re not alone.

Figure 2: How would you prefer cloud to be delivered?

Fig 2 EpicorSource: Mint Jutras 2016 Enterprise Solution Study

I’ve written extensively about the anticipated appeal of SaaS, along with the benefits actually realized. But I wouldn’t disagree with Himanshu’s conclusions about what cloud should stand for:

  • Choice
  • Convenience
  • Cost Control
  • Customization
  • Collaboration

However, I would qualify two of his bullet points. A few years back, my survey participants placed a high value on choice of deployment options. They seemed to like the idea of portability and the ability to move from on-premise to SaaS and from SaaS back to on-premise. Today many are looking for a path that helps them move from on-premise to SaaS, but once they move to SaaS, they almost never go back unless forced to (e.g. they get acquired by a company running a licensed, on-premise solution). So having multiple deployment options available is no longer such a high priority. Prospects simply pre-qualify those solution providers based on the deployment option they prefer.

I agree that choice is important. But it is more important to Epicor as the solution provider than to its customers and prospects. There are still some environments where a real multi-tenant SaaS solution might not be the best choice – at least not right now. These might be heavily regulated industries that require solutions to be certified, and re-certified when they change. Or a heavily customized solution may be required. And customization is the other bullet from Himanshu’s list that needs to be well-qualified.

Not all customizations are created equal. First of all, some simply aren’t needed. They might be left over from an implementation of a solution with far fewer capabilities than available today. Or they might have resulted from a “that’s the way we’ve always done it” mentality. If customization does not differentiate you in your market, I would seriously question whether it is justified.

Furthermore, customizations can be implemented in a variety of ways. Invasive code changes and SaaS don’t make for a good combination. But if customizations can be added as external components and linked back to ERP through Web APIs, or if they can be implemented through configuring the software without mucking around in the code, they may be perfectly compatible.

So Epicor’s announcement this week of its “cloud-first focus to support digital transformation of wholesale distributors is spot on”. The Mint Jutras 2016 Enterprise Solution Study found wholesale distributors lagging behind other industries in preference for and adoption of SaaS solutions. We also found 47% to 73% still relying heavily on paper for their operational and transactional system of record (customer and purchase orders, expense management, payments, etc.). They lag behind other industries in spite of the fact that ecommerce and their proximity to consumers puts them at a higher risk of disruption from the digital economy. Perhaps this “cloud-first” focus will be the gentle push wholesale distributors might need to start down the path of digital transformation.

Indeed, Epicor says it will be “…doubling-down on helping distributors adapt to these shifting dynamics of the marketplace—with an added focus to ushering customers’ journey to leverage the power of cloud-based solutions to drive increased productivity and achieve a differentiated customer experience to grow their business.”

Indeed wholesale distributors aren’t the only Epicor customers that will benefit from this “doubling-down.” I heard similar plans from the Epicor 10 side of the house, including planned features and functionality, along with efforts to improve simplification and usability. Yes, it’s about the overall user experience, but those driving the products seem to understand it’s not just about the “pretty software” you hear so much about today. As business models change, as technology advances and as new innovative products come to market, Epicor’s product must be easy to use, easy to install, easy to manage, and easy to change when the need arises.

Epicor “gets” it. We’ll be watching to see if it delivers.

 

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A Changing of the Guard at IQMS

A new president and CEO took the stage at IQMS Pinnacle this week as customers and long time employees bid a fond farewell to founders and leaders Randy and Nancy Flamm. IQMS has been one of the best kept secrets in the world of ERP for manufacturing, but new investors hope to break out of the stealth marketing mode of the past and really put the company on the path to increased market awareness and a new level of growth. New CEO Gary Nemmers, previously with HighJump, stepped into this new role about six months ago and has been assembling a team that will shift the strategic focus, but also leverage successes of the past.

Under Randy’s leadership the customer base has grown quite steadily to about 500 customers (not too shabby!) and those customers have been instrumental in developing manufacturing functionality that is both broad and deep. Indeed product development has been almost exclusively driven by Software Enhancement Requests (SERs) submitted by customers. While that approach was smart in the early stages of the company’s growth, building “real world” functionality that expressly meets the needs of its users, at some point it also has some drawbacks.

The breadth of functionality that IQMS can deliver is impressive, particularly for a relatively small ERP player. Scratch the surface of other solutions from vendors comparable in size and you get more surface. Scratch the surface of EnterpriseIQ (IQMS’ ERP) and you find remarkable depth. And you also have a very engaged user community. But having been driven by existing customers, the development process has not been entirely well organized. One customer noted, “It’s like a house that started out small and then additions were added on piecemeal. In the end you might have everything you need, but not necessarily where you need it. You might find the oven in the living room.”

Development of some of IQMS’ mobile apps provides us a good example. The development team has produced some pretty cool features like its Android Bulletin Board, described as “Twitter for your shop floor” or “Messenger-like instant communication to workers on the shop floor.” This includes the ability to attach the equivalent of sticky notes to business objects (e.g. orders, work centers, etc.). As the status of these business objects changes, an update is automatically sent. But while most of this development work is now transitioning to HTML5, making it compatible with a range of devices including Android, iOS and Windows devices, many of the existing apps run only on Android – not very useful if your company has standardized on iOS or Windows.

This example is symptomatic of a larger limitation inherent in being completely customer-driven. Customers will never push a vendor to do a major revamp of the underlying technology – particularly small to midsize manufacturers They already have too much to worry about without asking their software provider to fix something that isn’t broken. And yet today that underlying technology is critical in building and/or maintaining a competitive advantage in our digital economy.

Questions inserted (new this year) in our 2016 Enterprise Solution Study lead me to believe many companies over-estimate their “digital preparedness.” A two thirds majority (67%) of manufacturers feel they are close to or very well prepared for the digital economy, yet Table 1 tells us a very different story.

Table 1: To what extent is your operational and transactional system of record digital?

IQMS Table 1Source: 2016 Mint Jutras Enterprise Solution Study

*B2C Commerce is Not Applicable to 18% of our respondents

Generally over half still rely heavily on paper for their transactional system of record – more proof no solution provider can rely on existing customers to push for a major technological shift (e.g. to full web-enablement, support of HTML5, social, mobile and cloud capabilities).

For this kind of progress, as well as growth and expansion into new markets, you need a strategic plan and a well-defined product road map. That is exactly what new VP of Product Management, Rob Wiersma, is setting out to do. This shift in overall product and corporate strategy will take some time to put in place, but this is not Rob’s first rodeo. He is only in his second month on the job, so right now customers and prospects will need to wait and watch for this. But I would expect to see some major progress within months, not years.

Another area that bears watching is IQMS’ cloud strategy. The catch phrase at IQMS Pinnacle was “Cloud is the new choice.” The choices from IQMS today include a traditional on-premise license, a hosted model or cloud managed services. Notice there was no mention of Software as a Service (SaaS). And just to be clear, we know that while all SaaS is cloud, not all cloud is SaaS.

While the two terms are often used interchangeably (I admit to falling into that trap as well), they are not the same thing. So let’s distinguish between the two:

  • Cloud refers to access to computing, software and storage of data over a network (generally the Internet.) You may have purchased a license for the software and installed it on your own computers or those owned and managed by another company, but your access is through the Internet and therefore through the “cloud,” whether private or public.
  • SaaS is exactly what is implied by the acronym. Software is delivered only as a service. It is not delivered on a CD or other media to be loaded on your own (or another’s) computer. It is generally paid for on a subscription basis and does not reside on your computers at all.

Again – all SaaS is cloud, not all cloud is SaaS. While the IQMS customers I spoke with are not expressing a strong desire for SaaS (in fact some are still trying to understand the difference between client/server and SaaS and cloud), many are also faced with the challenge of aging servers that ultimately will need to be replaced… or not. Moving to a hosted model may eliminate the need for upgrading this hardware, but it also might not, depending on who and how it is hosted. Moving to SaaS eliminates this problem by eliminating the need to invest in hardware and its ongoing maintenance, among all the other potential benefits of SaaS. And I am now seeing a shift in preference away from hosting and to a real SaaS solution (Figure 1).

Figure 1: How do you prefer your “cloud”?

IQMS fig 1Source: 2016 Mint Jutras Enterprise Solution Study

So far IQMS “cloud” options provide reasonable choices to customers not demanding SaaS, but this could limit growth in the future. IQMS added about 100 new customers in 2015 and is expecting to increase that number to 140 in 2016. So it will be interesting to watch as IQMS continues to further define its overall strategy, including cloud and SaaS.

Mr. Nemmers has also made some other changes in his (so far) short tenure with the company. On the advice of his head of customer support (a 20 year veteran of IQMS) he deployed new call center software (Five9 Call Center), which went live about a month ago and is now operating 24X7 and providing faster response time and quicker resolution of customer issues. The software features skill-based browsing to connect the customer to the right support technician, and a nifty feature that facilitates an automatic call back (without losing your place in line) when high call volume precipitates a longer than usual wait time.

In order to emerge from its stealth marketing mode, IQMS also has a new CMO, Steve Biesczcat, on board now for almost a year. I think we will see some significant changes in the near future, since Mr. Nemmers has doubled the SEO and brand recognition budget from a year ago.

There have been some changes on the sales side as well with a new VP of Sales Operations (long time industry veteran Gary Gross) and the formation of a new Customer Success Team (think account management), leaded by Ken Kratz, providing a better front line link from the customer to IQMS. Also expect growth in EMEA (Europe, Middle East and Africa) through value added resellers (VARs) using the same model that has been successful in covering the Asia Pacific area.

In summary, I think 2016 will prove to be a year of transition for IQMS. I think fewer and fewer industry observers and potential prospects will be saying, “IQMS? Who’s that?” I look forward to seeing an aggressive and progressive road map and certainly more splash on the marketing side. I expect to see growth in North America and internationally. And through this transition I would expect customers to remain engaged and productive.

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Post-Modern ERP Meets #CommerceCloud: Infor to Acquire GT Nexus

Earlier today Infor announced it would acquire GT Nexus and its cloud-based, global commerce platform for $675 million. Pending regulatory approval, expect the deal to close within 45 days.

While at first glance this might seem to be a “me too” move following in the footsteps of SAP’s acquisition of Ariba, this is actually different in that it is all about direct (versus indirect) procurement, which is inherently more complicated because it must tie back to the sale of goods and the production process.

This is something Infor CEO Charles Phillips says he and Infor President Duncan Angove have been looking to do since coming on board in late 2010, pointing to the continued shift to contract manufacturing that moves much of the production process outside the four walls of the traditional factory. “Continued” is indeed the right adjective to use here.

This shift started decades ago when low-cost country sources made “outsourcing” very appealing. As companies have tended to become less vertically integrated, reducing costs and focusing instead on their core competencies, this necessitates new ways of doing business with each other. Through the purchase of subassemblies or finished products, the contracting of manufacturing or distribution services or the outsourcing of customer service or information technology, the value chain has lengthened and become more complicated. Yet expectations of response time and delivery performance have risen dramatically.

This is actually a topic that is near and dear to my heart. I went back and dug up something I wrote previously back in the day, before the digital age, when we talked about “E-business.” Here is what I wrote:

These new business models involve multiple companies working cooperatively and collaboratively together, in a seemingly seamless manner, as if they were a single virtually vertical enterprise. A company that can successfully interoperate in this way can claim to have reached the goal of full E-business integration.

As a result of this push toward full E-business integration, businesses face challenges that force them to push the envelope of business information systems. ERP grew from its predecessors of MRP and MRP II, constantly expanding its solution footprint to address more and more needs of the enterprise. Yet ERP was not conceived to look beyond the “four walls” of the enterprise, regardless of how expansive those walls would become, simply because the concepts of MRP and ERP were born in a time when companies were run as independent enterprises with arm’s length relationships with customers and suppliers.”

Mr. Phillips and Mr. Angove both acknowledged this situation today in announcing the proposed acquisition. They talked about “post-modern ERP” that (with the addition of GT Nexus) would push beyond those “four walls” and “provide customers with unprecedented visibility into their supply chains to manage production and monitor goods in transit and at rest.”

But none of this is really new news. That excerpt above is from my book, ERP Optimization, which was released in December 2002. Has it really taken more than a decade to deliver on this promise? Yes and no. First of all, when I look back on where we were when I wrote ERP Optimization, I realize just how far we have come. Back then “trading exchanges” weren’t much more than online dating sites for buyers and sellers, and very few offered value-added services like trade financing, logistics, electronic payment and settlement. Connecting these functions back to your ERP was difficult at best. Internet procurement was in its infancy. Most companies were still struggling with all the non-standard versions of “standardized” EDI. And the smart phone and other mobile devices (apart from the cell phone) had yet to be invented, so most of us couldn’t even dream of being as “connected” as we are today.

So yes, we have come a very long way. But through that progression, our expectations have also risen. We no longer simply “outsource.” We participate in a networked economy and we look to the cloud to keep us all connected. We also deal in a much more global economy, including emerging economies in countries that were hardly industrialized a short decade ago. The speed of business, as well as the speed of change has accelerated beyond anyone’s expectations.

So it is no wonder that the executives of Infor have wanted to fill this need since coming on board. They actually thought about building their own network. But I think they were smart in acquiring one. After all, the value of the network is largely measured by its size, scope and strength. And let’s face it, you don’t build one that is 25,000 businesses strong (like GT Nexus) overnight. And once networks like these are established and mature, it becomes harder and harder to build a brand new one. Once companies like adidas Group, Caterpillar, Columbia Sportswear, DHL, Home Depot, Levi Strauss & Co., Maersk, Pfizer, Procter & Gamble and UPS have joined, that network becomes that much more attractive with each new major brand added – hence the attraction to Infor.

GT Nexus is also a good choice because it is unique in that it includes supply chain financing partners that add even more value. Buyers and financial institutions offer pre and post export financing and payment protection. Infor admits that many of its own customers in manufacturing and retail aren’t even aware of financing options available, even though they might be struggling to finance procurement of materials and services in advance of collection of revenue. And who doesn’t want to get paid faster? Infor therefore sees a lot of opportunity to expand these offering even further. And the fact that Infor, GT Nexus and many top banks are all in Manhattan doesn’t hurt either.

The integration of GT Nexus and the Infor CloudSuites (there are several for different industries, including retail and fashion, which represents about 60% of current GT Nexus business) should be quite straightforward because both use standardized object models (Infor uses OAGIS). This is in fact one of GT Nexus’ strengths in being able to easily connect to back office solutions. Unlike traditional EDI where each connection is unique, this data model mapping allows suppliers to join the network once and talk to all buyers, avoiding custom maps and portals and invasive code development. So this leaves open the question of how the combined company will continue to work with other solution providers, including existing partners like Kinaxis.

Infor will continue to run the GT Nexus operation as a dedicated business unit. The entire management team is joining the larger corporation, a further testament to the cooperative and friendly nature of the acquisition.

All told this appears to be a win-win-win for Infor, GT Nexus and its customers. If not a match made in heaven, at least it is in the cloud.

 

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Enterprise Odd Couple: Plex Systems Partners with Workday

Pre-Packaging 2-Tier ERP for Manufacturers

Last week at its annual PowerPlex user conference, Plex Systems announced Plex Connect, along with several new partnerships and packaged connections. The goal of this new open integration framework is to “make it easier for manufacturers to connect people, things and applications to the Plex Manufacturing Cloud.” One of these partnerships stands out as being somewhat unique in that it is forged with another Enterprise Resource Planning (ERP) solution provider… Workday.

At first glance these two might seem like the proverbial odd couple. As another ERP vendor, Workday would appear to be a competitor. But it is not, because Workday is not a solution that is focused on the needs of manufacturers. And companies that “make things” are the only targets for Plex Systems. So if Workday isn’t for manufacturers, why would any Plex customer be interested in connecting to it? Because typically corporate headquarters doesn’t make anything, but might have sophisticated accounting requirements to support global operations. This partnership is all about delivering a pre-packaged 2-tier ERP.

Making the Case for 2-Tier ERP

Operating across a distributed environment has become a way of life for a large percentage of manufacturers today, even smaller ones. In fact 77% of all manufacturers that participated in the 2015 Mint Jutras Enterprise Solution Study had more than one operating location served by ERP (Figure 1). And 67% operate as a multi-national company. Even those with annual revenues under $25 million average just over 2 operating locations and that average grows steadily as revenues grow. This means very few companies today are able to conduct business as a single monolithic corporation.

Each operating division will have operational needs and must then feed to corporate financials for consolidation and reporting.

Figure 1: Environments Are More Distributed and Remote

Plex WDAY Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

Note In Figure 1 company size is determined by annual revenue.

  • Small: annual revenues under $25 million
  • Lower-Mid: $25 million to $250 million
  • Upper-Mid: $250 million to $1 billion
  • Large: revenues over $1 billion

In years gone by all the different operating locations depicted in Figure 1 were likely to be left on their own to evaluate, select and implement a solution to run their operations. However, that scenario is quite rare today. The vast majority (90%) has established corporate standards for enterprise applications (Figure 2).

Figure 2: Have you established corporate standards for enterprise solutions?

Plex WDAY Fig 2Source: Mint Jutras 2015 Enterprise Solution Study

But this doesn’t necessarily mean a single solution runs the whole enterprise. Very often the ERP solution installed at corporate was selected for its ability to report and consolidate across multiple divisions. Very often these corporate accounting solutions (like Workday) don’t have the necessary functionality to run the operations of its divisions, especially if those divisions are manufacturing sites. In these cases, the standard solution for these manufacturing operations is a different solution – one like the Plex Manufacturing Cloud. Hence…

The Emergence of 2-tier ERP

In fact this 2-tier standard has become quite commonplace. Of those that have established corporate standards, less than half (47%) uses a single standard where all units, including corporate headquarters, use the same solution (Figure 3). At the same time, 31% have established a 2-tier standard and another 22% have a multi-tier standard. This latter category is most typical in a diversified corporation where you might see different types of businesses at the divisional level – you might have distribution warehouses or sales and service locations in addition to manufacturing sites.

Figure 3: Is this a single, two or multi-tier standard?

Plex WDAY Fig 3Source: Mint Jutras 2015 Enterprise Solution Study

It is this middle 31% that is targeted by the Plex Systems/Workday alliance, although it might work equally well in the multi-tier scenario. In fact if the non-manufacturing sites are sales and service operations, Workday itself might be the chosen standard for those divisions, eliminating the need for more than two different ERP solutions.

Plex Systems acknowledges that its solution is not the best for non-manufacturers. In fact Plex makes that point in its bold move to implement Workday for its own operations. The initial knee-jerk reaction might be, “What? They don’t sip their own champagne?” (An analogy I much prefer to eating one’s own dog food!) But while Plex knows and serves manufacturing very well, it isn’t a manufacturer. It makes software. While software companies that deliver on-premise solutions might burn CD’s, package them with documentation and ship a physical product to a customer, as a pure cloud provider, Plex sells software only as a service. The accounting for software, services and subscriptions is very different than accounting for shipping and delivering a physical product. But at the same time, this decision also underscores the fact that Plex is not afraid to make the right business decision in managing its own business.

But getting back to the 2-tier scenario, in the past we have seen solutions from SAP and Oracle dominate the corporate scene. Yet solutions like Workday, born in the cloud, are starting to chip away at the dominance of these two major players. And an alliance like this will only serve to accelerate this erosion. Very often a decision for SAP and Oracle might have been influenced by the efforts involved in integrating and rolling up financials from the distributed sites. While these have typically not been “out of the box” in the past, popular sentiment is that if you go with one of these “giants,” you will likely find systems integrators and other service partners who have done it before. That means they have a lot of experience with SAP and Oracle. You still pay for the connection, but you are at least dealing with a higher level of expertise.

With pre-packaged connectors, the need for this prior experience goes away and the expense of forging the connection drops dramatically.

Impact on Roadmap

So after hearing about this and other partnerships (with Salesforce and DemandCaster) the first question I posed to Plex was regarding the impact these might have on their own road maps. In terms of Workday, my specific concern was over enhancements planned to make its ERP more “global.”

Plex already has customers running the Plex Manufacturing Cloud from more than 20 countries, but it has let its customers essentially “pull” them into those countries and doesn’t necessarily support all the localizations and legislative regulations required in each… or all the complexities of growing multi-national companies. About a year ago Plex Enterprise Edition made its debut at PowerPlex 2014 along with an aggressive roadmap to support complex, global, multi-plant manufacturing organizations with multi-entity financial and supply chain management requirements.

In answer to my question, Plex has assured me none of these partnerships will result in taking planned innovation off the table. It will continue to invest in these globalization efforts. Similarly, other solutions such as DemandCaster will not prevent Plex from developing its own forecasting / demand and supply planning software. The alliance with Adaptive Insights will not prevent Plex from developing more robust financial planning and budgeting offerings. But I am thinking Plex doesn’t really need to compete against Salesforce for CRM.

 Conclusion

In the meantime and well into the future, Plex Connect should indeed make it easier for manufacturers to connect people, things and applications to the Plex Manufacturing Cloud. And in today’s connected, digital economy, isn’t that what it’s all about?

A Side Note: Is Workday ERP?

In the past I have posed the question about Workday: Is it ERP? Does it Matter? Many refer to Workday as ERP, but by my definition (an integrated suite of modules that provides the operational and transactional system of record of a business) an integrated finance and accounting solution that does not manage the “order” falls a bit short, But it does manage a contract, which for “talent intensive organizations” including software and Internet service companies like Plex) is equally, if not more important. Feel free to read my full analysis in the highlighted link above but for purposes of our discussion here in terms of 2-tier ERP, I am comfortable in referring to Workday as ERP.

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Plex Systems Takes a Page From Manufacturer’s Play Book

CONTINUOUS INNOVATION DRIVES ERP DEEP ON SHOP FLOOR

Continuous improvement has long been the mantra for many manufacturers. Kaizen and other formal programs like Lean, Six Sigma, and Total Quality Management (TQM) have dominated the manufacturing scene for years. But what about the world of enterprise software for manufacturing? Not so much. Many of the solution providers that serve the manufacturing sector understand the concepts, but don’t apply them to software development. Sure, these software vendors innovate, but not in a continuum, especially when it comes to broad applications like Enterprise Resource Planning (ERP). Except for one: Plex Systems. Believe it or not, Plex can and often does deliver enhancements to its Plex Manufacturing Cloud on a daily basis. Too much, you think? Not at all; its customers love it!

Why Do Consumers of ERP Expect Less?

Many consumers of ERP are conflicted over innovation and upgrades. On the one hand, when functional gaps or missing features or cumbersome processes are detected, customers demand enhancements. On the other hand, we find manufacturers unwilling and unable to actually go through the upgrade process. So the whole process becomes a Catch 22.

If these enhancements are delivered through the normal upgrade cycle, customers can find themselves waiting a long time. Major upgrades to ERP are typically delivered once every 12 to 18 months, or sometimes over a longer cycle, partly by customer request. They simply can’t accept and consume upgrades any faster. But that doesn’t mean the typical ERP client waits “just” 12 to 18 months for a requested enhancement. If your enhancement request just misses the planning phase of the cycle, you might have to wait for another cycle before it is even considered, which means you might wait two to three years for it to be delivered. And even then, it might not make the cut.

But let’s say it does and your enhancement is delivered with a major upgrade within a year (or maybe two or three). Do you jump right on the release? If you are like most of the manufacturers participating in our annual Mint Jutras Enterprise Solution Study, the answer is, “probably not.” Only 14% of manufacturers tend to be early adopters of releases (Figure 1). About a third (34%) upgrade on a regular basis but not as early adopters. This means they will likely wait for those early adopters to shake out all the bugs and for the solution provider to smooth out all the rough edges. This might take three months? Six months? Another year?

Or you might be like the 31% that are likely to skip releases. You might not get too far behind, but if you skip a release, and upgrades happen every 12 to 18 months, you won’t experience any real innovation for at least two to three years.

Figure 1: Approach to Upgrades

Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

Why? Largely because upgrades can be disruptive and costly. We asked our survey respondents to stack rank five individual factors in terms of the likelihood each will keep them from upgrading when a new release is available. We used a scale of 1 (least likely) to 5 (most likely). The results are shown in Table 1. As you can see, potential disruption to the business is at the top of the list, but the rankings are very close. Your typical manufacturer understands the cost and effort of a traditional upgrade and will be reluctant to spend the time and money without expecting a significant payback.

Table 1: Ranking of factors preventing upgrades

Table 1Source: Mint Jutras 2015 Enterprise Solution Study

 As a result, although software development is typically a continuous process, the results are not delivered continuously. Most solution providers create enhancements, bundle them up, test them out and issue major upgrades periodically, hence the traditional 12 to 18 month cycle, with just some bug fixes and/or minor releases in the interim.

Plex Customers Have Come to Expect More

While this type of upgrade cycle has been generally accepted and expected by those running traditional, on-premise solutions, Plex customers have come to expect more. Perhaps they were frustrated by delays, got impatient and dissatisfied and were seeking more from their software vendor. Or perhaps they chose Plex for other reasons. Either way, they soon became spoiled by the “Plex way” of innovating.

Of course any solution provider that offers its software exclusively as a multi-tenant SaaS solution has a distinct advantage of only having to maintain a single line of code. Solution providers that deliver on-premise solutions are forced to maintain multiple versions of the software. Very often the software is offered on a choice of platforms and databases, and the vendor must support multiple release levels determined by their customers’ ability to keep pace with upgrades. For every person-day they spend on innovation, they spend another multiple of that day making sure it works across various environments. The more choice they offer, the more permutations and the higher that multiple.

More and more we find vendors riding the cloud wave. They are taking on-premise solutions and moving them to the cloud and offering alternatives for deployment. Some of these moving to the cloud will be multi-tenant; others are single-tenant, delivering more of a hosting option. But even those that offer multi-tenancy will still be forced to maintain multiple versions and will be limited by their on-premise customers’ ability to keep pace with innovation. Only those that offer a multi-tenant SaaS solution exclusively can devote their entire development budget to innovation. That’s the real beauty of having (and maintaining) a single instance of the software, and nobody takes better advantage of that than Plex Systems.

The Plex Manufacturing Cloud is not the only ERP solution that is offered exclusively as multi-tenant SaaS, but it is one of a very few designed exclusively for manufacturers. And of these SaaS-only manufacturing ERP solutions, Plex’s is (by far) the most mature. But not all SaaS vendors take full advantage of the opportunity for continuous innovation. Some do offer more frequent updates and all relieve the customer of much of the burden of the upgrade process. But nobody else (that I know of) does it like Plex.

 Daily Updates – Responsibly

Plex can and often does update the solution every day. You heard (or read) that correctly: every day.

Of course Plex doesn’t pull the rug out from under its customers every day. The development team adds all new features in such a way that a customer must “opt in” to use them. Many of its customers evaluate these innovations on a periodic basis, much like a release cycle. But they are never faced with the “all or nothing” kind of scenario so common in upgrading on-premise software. If they know a valuable new feature is coming, they might jump right on it and not wait for that periodic review.

User Interface Refresh

Plex’s new, redesigned user interface (UI) is the perfect example of this. Plex is methodically updating every screen used by its users, including the navigation screens used to perform back office functions, as well as the control panels used on the shop floor. As each of these are completed, they are introduced into the live product, but the old screens and the old navigation methods are still there.

Of course Plex is only converting those functions its customers are actually using. Over time, newer and better features and functions may have replaced some of the screens, inquiries and transactions. Eventually people stop using the old functions and Plex can then get rid of them. In an on-premise environment, solution vendors have no visibility into what is actually being used and what is not used. So, once code is delivered, it tends to live on forever.

But because all customers are using a single instance of the software running in the Plex Manufacturing Cloud, Plex has full visibility into not only what is being used, but also how often it is used. While this might seem to be a bit big brother-ish to some, customers don’t seem to mind. And it puts Plex in the unique position of being able to eliminate code. In fact the development team recently deleted 30% of its existing source code. And as Jim Shepherd, Plex’s Vice President of Corporate Strategy noted, “If we couldn’t get rid of code, ours would get as big and unwieldy and ugly as everyone else’s.”

You know how good it feels when you finally clean off your desk at work, or clean out your closets at home. Think how good the software developers felt when they could clean out 30% of the code, making that much more room (figuratively) for all the new features, functions and innovation they continue to work on. And indeed the development team has been busy. Combine that with the fact that Plex perfected rapid application development processes more than a decade ago and you get a regular cadence of new features and new offerings.

Here’s an example of some of the areas they have been working on:

Investment in process manufacturing

In order to address the market sitting right outside its doors in nearby Detroit, Michigan, Plex got very good at addressing traceability. The strength of the traceability functions built for automotive discrete manufacturers have led Plex into a fair number of food and beverage and similar process-related industries. Further investment in lot management, lot attributes, lot tracing and unit of measure management will be made in 2015. That investment will also continue into the future with even more sophisticated unit of measure management, costing, yield management, recipes and pricing/promotion management, as well as further work on compliance and FDA validation.

Finite Scheduling

Plex has already released its Advanced Production (Finite) Scheduling modules, but work continues to bring attribute-based grouping (e.g. watch out for allergens!) and sequencing and sequence-dependent changeover time determination (better go from light to dark when applying coatings), and labor-driven capacity determination (knowing how many machines is not enough).

Plex Enterprise Edition

Plex Enterprise Edition is a suite of applications built to support complex, global, multi-plant manufacturing organizations with multi-entity financial and supply chain management requirements. It was first introduced at PowerPlex 2014, with finance and accounting capabilities (accounts receivable, accounts payable, general ledger and cash management). But work continues throughout 2015 on centralized sales and purchasing functionality, along with inventory work in progress. The team will then move on to enterprise manufacturing (engineering, scheduling, production) and enterprise asset management (fixed assets, treasury management and human resources).

Tech Gadgets and Automation

These are just a few examples of the types of feature/function development that has been underway at Plex. In addition, the team has also been busy experimenting with new technology. This team is led by the ultimate “gadget guys.” But this is not frivolous work. The team also “knows” manufacturing and is always in search of new ways to make manufacturers more efficient and productive. This means new ways of capturing data, automating processes and engaging with ERP both in the back office and on the shop floor. The shop floor was the prime focus of a very interesting demo the Plex team put together about a year ago, but has recently updated.

The demo a year ago was an interactive demonstration of a manufacturing process that took you from the receipt of material through to shipping of a finished product. It was, and still is, a good example of new and different ways of engaging with ERP. You see, we didn’t use a keyboard. But we did use scanners and sensors, a light curtain and yes, there was even a blue button that you might call the “easy button” that signaled an operation was complete. Never once did we go through a traditional menu structure. Each work center looked and felt a little different, and even the devices used for data capture varied, because the work being completed was different. This was a far cry from early days of ERP and confirmed my belief that the best user interface (UI) is really no UI at all.

And this year there were some new “wearables” on the (simulated) shoGoogle glassp floor, some of which were just being prototyped. Plex is participating in the new Google Glass @Work program including Google Glasses built into safety goggles. It is experimenting with smart watch and blue tooth technology and beacons that recognize when someone wearing these devices comes within range of a work center. The goal is to make smart watchdata capture as easy, automated and hands-free as possible.

Manufacturers are widely known for their pragmatism. Unlike some consumers today, they will not go out and buy the latest new gadgets just to look cool or simply because they can. These devices need to add real value Beaconand that is exactly what the Plex team is searching for in this experimental phase.

Not Slowing Down Anytime Soon

With a history that spans almost 20 years, and a product that has matured significantly, you might think innovation might be slowing down at Plex. Quite the contrary. The Plex development team has nearly doubled over the past couple of years. Even though it is already a complete manufacturing ERP solution, with particular depth in functionality in manufacturing execution (MES), there is still lots to do. Along with the wearable technology and the refreshed user experience, it is also working on a universal search capability, master production scheduling, advanced manufacturing intelligence, along with the additional process manufacturing, finite scheduling and multi-national, multi-location capabilities mentioned earlier. And much more.

As an industry analyst, it is my job to stay objective. But every once in awhile a company comes along that does something very unique. Plex’s combination of rapid application development, cloud delivery and commitment to customer satisfaction is the prefect trifecta for this uniqueness. And on top of that, Plex does it very well. Kudos to the Plex team for taking a page from the manufacturers they serve so well and delivering continuous innovation.

 

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