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ERP 2013

What’s in this report?

P4 A new dawn Malcolm Wheatley explores the convergence of technology trends shaping the future of ERP technology

P5 Connect with the experts

INTRODUCTION Worst case scenario; it’ll make your business go under

Explaining the value proposition of ERP Connect

P8 Clouded vision Cloud-based ERP solutions are becoming more common, but not all solutions – or providers are equal. Insite explains the benefits of quality Cloud platform management.

P10 Fast and Focussed If you decide you need a Business Intelligence solution to support better reporting from ERP data, what’s the best approach to take to implementation? Microsoft Dynamics AX partner eBECS shares its methodology

P12 Shopping list Dan Roberts, at analyst firm Cambashi, points out the developing capabilities in ERP systems which will make the biggest competitive difference to manufacturers in ten years’ time

P14 So we need ERP – what next?

Wayne Palmer, MD of SME manufacturer Thinking Space shares his experience of identifying a need for ERP and building a plan for implementation

Editorial

This report was compiled for The Manufacturer magazine by: Jane Gray, Editor j.gray@sayonemedia.com Malcolm Wheatley, Contributing IT Editor editor@malcolmwheatley.co.uk

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hese were the reassuring words shared by one member of The Manufacturer magazine’s Directors’ Forum to another as the peer group considered the challenges of implementing ERP systems in their businesses.* It’s widely accepted that a good Enterprise Resource Planning system will form the back-bone of any successful manufacturing firm and that implementing the technology is an inevitable step for any company aiming to grow, mature and compete.

But knowing when to take that step, selecting the right system for your business – and its future strategic needs – and completing an implementation which displays measurable returns on investment is very hard.

And the challenge isn’t about to get any easier for new or existing ERP users.

The global market for ERP investment has slowed down – reporting just 2.2% growth in 2012 – but burgeoning complementary technology fields for Cloud platforms, Software-as-a-Service, and financial and human capital management, to name a few, are showing breakthrough growth according to reports from Gartner and other technology analysts.

What this means, is that ERP is a mature technology, but far from static.

Furthermore, with the top 10 ERP vendors owning more than 64% of the global market share and experts predicting further markets consolidation, ERP investors need to consider carefully, not just what technology will bring the best results in the long term, but who is best placed to deliver and support it reliably in the future.

The various articles in this supplement are designed to help manufacturers through the mire.

If you’re not sure whether you need an ERP system yet, Wayne Palmer’s insight on p12 might prove useful.

If you know you need ERP, or have already invested and are looking to upgrade or add supplementary technologies like Business Intelligence (p8), then the articles on p2 and p10 should help you make sense of vendor marketing and focus on the capabilities which will make a difference to your firm, now and in the longer term.

And finally, if you’ve got a grounding in your needs and are wondering how you can quickly and effectively get a feel for which vendor and implementation partner will work best with your team and company culture, you might find ERP Connect – explained on p3 – a tempting option. *To read a summary of conversation at this Manufacturer Directors’ Forum dinner debate, go to: bit.ly/SaladandSatellites

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ERP 2013 Technology trends

A new ERP is at an inflection point, with an exciting future ahead.

Malcolm Wheatley explores the convergence of ERP advances.

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or anyone evaluating or investing in a new ERP system, these are exciting times.

Why? Because ERP is at one of its periodic inflection points, where rapid developments in technology and functionality take place in a very short time.

And according to some observers, the present inflection point is as significant as the giant leap that took place when ERP went from dedicated ‘green screen’ terminals to today’s client-server technology, accessed via users’ desktop computers.

Three separate things seem to be going on, each impacting both user experience of ERP, and the costs and complexity of an as-delivered ERP system.

Of course not every ERP vendor is moving at the same pace – but they’re all moving in the same general direction. In short, what’s happening is truly industrywide – providing assurance that you’re buying into a genuine change, not a transient twitch.

2. Ease of implementation

A combination of pre-packaged implementation methodologies and bundled best practices has sliced through ERP implementation timescales.

Stick to the ‘out of the box’ system. Configure it to meet your needs by selecting the appropriate options. Match your organisation to the system’s predefined ‘key users’ and their reporting 3. Mobile and administration needs In an era when we all have smartphones and you’re up and running and tablets, why confine ERP to the office faster, with far less risk and, desktop? Just as we routinely check furthermore, you’ll end up e-mail on the move, why not carry out ERP with a better solution transactions as well? to boot.

It’s a transition which is well underway.

As Stephen Clarke, Neil Ferguson-Lee, lead solution architect responsible for Sage ERP X3 at award-winning Microsoft implementation sales at Sage implementation partner eBECS observes, “Tablet devices are partner K3 FDS puts it, “We’re a game-changer. You can access ERP from seeing a big push away from wherever you are, resolving problems there complicated implementations and then.” with a lot of third-party Simon Charlton, sales director at Microsoft solutions. Companies want implementation partner Columbus, makes low-risk solutions from a a similar point. The traditional desktop ERP single vendor.”

1. The Cloud experience, he says, “is very much becoming It’s happening, and it’s happening now. a thing of the past. Now, the push is towards What does this mean for businesses? Generally, it’s good news. a screen in the palm of your hand.”

Faster implementations with less need for large, expensive pieces of Put it all together, and what have hardware and server installations and – in many cases – a boost to you got? An exciting vision of real-time, cashflow via ‘pay as you go’ licensing. accessible information and transaction The theoretical attraction is undeniable and it’s proving powerful in management which can be quickly and practice. QAD’s chief marketing officer Gordon Fleming, for instance, reliably deployed for a cost of ownership that reports that half of his firm’s new accounts are signing up for the cloud is lower than ever. END version of its specialist manufacturing ERP solution, QAD on Demand.

4

ERP 2013 Events

experts Connect with the

Gathered in one place, for one day: just about every ERP vendor and implementation specialist worth talking to – plus fellow manufacturers just like you. That’s what makes ERP Connect a ‘must-attend’ event. Malcolm Wheatley reviews.

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s the glue that ties together disparate parts of the manufacturing business, ERP clearly has a lot to offer.

It’s how manufacturers do things – and also where they store information about what they’ve done. Information that can be accessed by smartphones, desktop computer screens, reports, dashboards, SQL queries – or even a separate, standalone Business Intelligence system.

But equally clearly, a new ERP system is not an undertaking to be treated lightly.

There are costs, and there are risks.

There’s a confusing variety of vendors to choose from, plus a choice of competing implementation partners and consultants.

So, not only is a decision to implement an ERP system not to be taken lightly, it’s also not to be taken easily. What’s more, get the decision wrong, and you’re either stuck with a system that isn’t a ‘fit’ for your business, or an expensive re-implementation beckons.

Thankfully, help is at hand. ERP Connect is a well-established, biannual event run by The Manufacturer magazine which has several years of experience under the belt.

The event brings together, in a single venue, a compelling selection of ERP vendors, implementation partners and manufacturing businesses. It provides scheduled one-to-one meeting time for manufacturers with pre-classified potential suppliers so that direct comparisons can be made between systems and partners which best match a specific business’s needs.

The event also includes an industry-led conference programme, providing insight from manufacturers who have ‘got the T-shirt’ for ERP implementation.

At ERP Connect 2013 on December 4, there’s the opportunity to listen to ‘hands on’ ERP experiences from half a dozen manufacturing companies, which together have implemented and worked with a wide variety of ERP systems. END

ERP Connect 2013 Held on December 4 alongside TM’s Manufacturing Directors’ Conference in Birmingham, ERP Connect 2013 already promises a full complement of leading ERP vendors and a strong line-up of industry speakers including: Peter Ogden, business and information system manager at specialist defence and security electronics manufacturer Ultra Electronics Philip Hawthorne, business process manager at surface preparation equipment manufacturer Norican Group David Mooney, managing director, at monitoring systems manufacturer Drallim Industries Keith Nicholl, business improvement manager at bespoke sheet metal fabricator KMF “Sixteen pages of notes is testament to the volume and quality of guidance and support generously offered by all of the speakers at ERP Connect 2012,” commented Steve Roper of Ultra Electronics who attended as a delegate last year. “Upgrades, downgrades, new build, plans, success, failure, tears and laughter - there was so much variety in the day that it is hard to pick out highpoints.”

Visit www.themanufacturer.com/erpconnect or call 0207 401 6033 for more information and booking.

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You’ve been waiting for this and here it is...

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ERP 2013 Cloud computing

Clouded

vision

Running mission-critical IT systems in the cloud involves much more than merely renting processing power and bandwidth.

Fit-for-purpose infrastructure, application monitoring and strong support skills are vitally important too, discovers Malcolm Wheatley.

I

t’s no longer considered remarkable for businesses to run mission-critical systems, such as ERP, from the cloud. But that doesn’t mean that it’s always sensible – or safe – to do so.

That’s the uncompromising message from James Barden, managing director of managed private cloud provider Insite, the UK’s foremost provider of hosted and managed services for Microsoft Dynamics ERP solutions.

If you’re surprised to hear such words from someone who is an unabashed seller of cloud-based solutions, you shouldn’t be. For Barden’s message is central to the whole debate about the cloud. Simply put, his point is that clouds – and cloud providers – aren’t equal.

Cheap isn’t necessarily cheerful A sizable industry has grown up of companies offering cloud-based server farms, keen to undertake just that outsourcing. Their battle cry is: “rent the space and processing capability that you need, and say goodbye to onpremise headaches”.

But frequently, adds Barden, you’re then saying ‘hello’ to a whole new set

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of headaches – headaches that are distinctly unwelcome in the context of mission-critical ERP applications.

And that, he explains, is because there’s a world of difference between renting space and processing power and having a professionally managed, fit-for purpose infrastructure, which just happens to be externally-hosted in a private cloud.

Our goal is to ensure our clients’ applications are always available. If the provider you’re talking to can’t demonstrate that, you should think twice about putting your missioncritical applications in their hands

A common misconception is that today’s feature rich ERP applications will run on an ‘all virtual’ infrastructure.

“Our experience is that both physical SQL database and Citrix servers are required to deliver satisfactory performance. Insite has always implemented the optimum combination of physical and virtual servers, dedicated to each client,” confirms Barden.

“The infrastructure that supports many cloud propositions has been built to a price point using entry level technologies,” Barden continues.

“It has not been built with mission critical applications in mind. For ERP applications, this typically results in varying degrees of poor performance, reliability issues and unhappy users.”

Managed vs. Hosted “Companies come to us to host mission-critical ERP systems such as Microsoft Dynamics AX, because we enable them to focus on their core business by taking total responsibility for their applications.” he explains.

“We underwrite the application performance and are accountable for its availability. Compared to infrastructure rental propositions, Insite provides significant value-add.

It’s much more than guaranteeing Windows server availability. That’s why we describe the service as managed private cloud.”

Indeed, he adds, we would be concerned if clients did not benefit from reliability and performance better than that of an in-house managed system.

This is because Insite employs highlyqualified people that are often too expensive and difficult to retain in house.

Security is also of paramount importance, stresses Barden, Insite is ISO 27001 accredited – a surprisingly rare qualification in the world of Cloud providers.

“Our goal is to ensure our clients’ applications are always available,” Barden sums up. “And if the provider you’re talking to can’t demonstrate that, you should think twice about putting your mission-critical applications in their hands.” END

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ERP 2013 Business Intelligence

How come? The answer lies in eBECS’ ‘Rapid Return’ approach, he explains.

Rapid Return aims to deliver quick time to benefit as well as more assured benefit.

Its approach to identifying the information and BI needs of the organisation is key here, eliminating the risks and complications that dog many BI projects. hen wind farm and solar power specialist “Traditionally, there’s a consultant-led approach to Business Intelligence Mainstream Renewable Power discovered which involves identifying user needs at the enterprise level, and then that it needed Business Intelligence (BI), it delivering an enterprise-wide solution to meet those needs, starting with recognised that it needed it fast. the construction of a data warehouse,” Mr Chudasama says.

For reasons of taxation and corporate law, every “Rapid Return, on the other hand, identifies the critical sources of one of the company’s renewable power projects – in information and provides immediate answers via visualisation and countries including as Chile, Australia, Germany, Eire, reporting, thus gaining user buy-in and delivering a virtually immediate ROI.” the United States, and the UK – has to be constituted In other words, Rapid Return starts small, and then scales up: as a separate legal entity. answering immediate needs through scorecards, dashboards, And as the number of the Mainstream projects reports, performance charts and metrics; before moving on to the next rose from a dozen towards the present level of 140 requirement, adding value and ROI as the project progresses. or so, the complications of financial reporting quickly “We aim to empower business users as early as possible. The end mounted, explains Mainstream enterprise architect point might well be a data warehouse and Mark Kane. a full Business Intelligence solution, but the “We realised we were outstripping the customer and their users have had return reporting capabilities of our ERP system, from the analysis phase, without waiting and that the challenges of reporting from months or years for their needs to be met.” so many ‘data cubes’ was starting to Which was exactly the experience at impact our business,” says Kane. “We Mainstream, relates Kane. needed Microsoft Business Intelligence, “eBECS came in, and in a matter of days alongside our Microsoft Dynamics AX we went from getting individual reports enterprise ERP system.” from Dynamics AX to running reports But Mainstream’s first attempt to straight from the data cubes,” he says. “It implement BI ended in failure in 2011. The was an efficiency improvement of at least implementation partner couldn’t deliver. tenfold on the general ledger side – a huge From the jaws of failure win for us.”

Further projects have followed. “It’s Enter award-winning Microsoft Dynamics taught us a lot about effective Business ERP, Business Intelligence and CRM Intelligence,” sums up Kane. “Have a implementation experts eBECS. project that you can put your hands For eBECS, says BI sales lead Shailan around, with clear deliverables and a clear Chudasama, a multi-currency, multiMark Kane, Enterprise Architect, sponsor, and deliver against it. Try to reach country, multi-company challenge on Mainstream Renewable Power too far, and you’ll fail.” END this scale was business as usual.

When the situation calls for a Business Intelligence application to extract data from ERP, a focused project delivers rapid and assured results, finds Malcolm Wheatley.

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In a matter of days we went from getting individual reports from Dynamics AX to running reports straight from the data cubes. It was an efficiency improvement of at least tenfold on the general ledger side

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Are you worried about making the wrong ERP decision?

Selecting the right ERP software can radically increase the efficiency of your business. However, implementing the wrong system can have serious consequences – financial, structural and even personal!

ERP Connect will bring together all the major solution providers in one place, for one day. This is your unique chance to evaluate their solutions and match the key elements with your specific business needs.

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ERP 2013 Technology trends

Real-time or near real-time analytics in ERP systems are improving in quality and will become more important over the next few years – it’s where new solutions can have the greatest impact on a company’s competitiveness.

SHOPPING

focused Industry solution

he-box Out-of-t system analytics Real-time integrate Easy to platform Intuitive e rfac user-inte

food manufacturers.

If you’re looking for an edge over your competition, then a specialist solution might be what you need.

Beware the vendor that says you don’t need a tailored solution because their product can do everything. What they say may be true, but at a cost in both time and money as you wait for the implementation teams to configure the product to your needs.

Pre-configured or specialist solutions will save time and give you what you need, though not for companies that are considering diverging from their core business line. A specialised system may make expanding into new areas difficult.

Dan Roberts, senior consultant at industry technology analyst Cambashi, gives a run-down of what a forward thinking manufacturer should look for in its next ERP purchase

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RP and technology vendors are always keen to sell you their latest products. But what should you really be looking for in your next ERP purchase? What technologies and capabilities will be important in five or 10 years’ time?

If I could really answer those questions with 100% accuracy, I would be investing in the technologies, not writing this article. However, the following should provide a good set of guidelines:

Increase industry focus ERP vendors are offering increasingly focused solutions for ever-smaller niche sectors – think bakeries, rather than

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Analytics ERP systems are designed to track the transactions across your business, so that you know what’s going on. But what you really need is a knowledge solution that reports what you need to know at the time you need to know it.

Speed Companies that are looking to set up new ventures in new territories need to get up and running quickly. This is a very good reason to consider cloud ERP vendors.

Other vendors are also offering accelerated implementations, but the trade-off is clear: can you afford to wait the additional time for a potentially better-suited solution?

Seamless integration Companies involved in a series of mergers and acquisitions – or planning them – should consider how to cope with merging the ERP systems after companies are merged.

Vendors are offering a number of ways to do this. The best use international standards to access each ERP system and provide an integration layer. Some of the cloud vendors are moving towards Platform-as-a-Service (PaaS) offerings that perform just this function.

If M&A is an important part of your business strategy, then it is worth considering an ERP system that has seamless integration built in.

User Interface There is a lot of noise from the ERP vendors about how their new systems have intuitive new interfaces that make them easier to run.

I’ve deliberately put this at the end of the list, because depending on your point of view, it’s either necessary for just getting on the shortlist, or not necessary at all.

The best new interfaces make it easier for employees to get started and make their jobs faster and more efficient. However, in five years’ time, will these new interfaces look dated?

Possibly more important is the ability to seamlessly upgrade to the latest version without costing a fortune in either time or money. END

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ERP 2013 Defining requirements

what next?

Choosing a system

Wayne Palmer, MD of SME Thinking Space, explains the challenges his company has faced since realising it needed to invest in an ERP solution.

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ourteen months ago Thinking Space made its first acquisition. This was the trigger that set us thinking about investing in ERP. We build technical furniture so have lots of mechanical engineering people who are, by nature, process-driven. We all thought our processes were average at best but that all changed when we made our acquisition.

The smaller business we took on was loss-making at the time. It interested me because the product was good but it was disorganised and lacked a sales and marketing edge. By introducing our systems to the business we quickly made it profitable and helped Thinking Space grow.

Confidence in knowing The knowledge that our systems were reasonably robust gave us the confidence to introduce ISO accreditation and prompted management to consider the idea of automating the processes we had in order to gain further efficiencies and potentially pave the way for making more acquisitions easier to integrate.

Furthermore, the company is exporting more and the five year plan is to manufacture globally. We can only do this if we have a good ERP system to roll out to other sites.

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We found selecting a system difficult. You need time to research the market and you need to talk to a lot of people who largely only want to discuss the one system they support, so it’s hard to make direct comparisons.

Preparing the business for implementation is also hard. We know we’ll need a lot of management time to be freed up and are working to build in some slack.

After two visits to prospective suppliers and meetings with people who have already implemented ERP we have learned the following.

1 2

Our existing processes must be formalised before we automate. We are confident about this now and we are ready to speed up and streamline existing processes rather than start from scratch The system we select must be ‘out-of the box’ but must also be flexible.

We want to be able to expand the system as we grow and support plans to become the UK distributor for another product

I have found advice from companies who have been there and done it invaluable in forming our ERP plans. no – I’m a big advocate of this approach to gaining knowledge in all aspects of business. While it can be a challenge to overcome the egos of company owners who believe they need to be secretive about their ‘unique’ processes, which in fact are nothing special, I now have a good network of contacts in firms larger and smaller than us who can offer valuable insight.

Next steps We have scoped our budget and the plan to implement a solution will be formally presented to the company in June next year with a view to ‘going live’ 12-months later.

The need to wait is partly because I want to push the cost into next year’s budget. But the other, more important, reason is that I need to pave the way for removing myself from the day-to-day of the business so that I can support the implementation completely. END

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