Off-Site is On the Mark with Cloud-Based ERP

May 24, 2010
Epicor adopts a subscription model, so machine shops and small to mid-sized manufacturers can stay up-to-date on software, hardware, operating system, support, training resources, and on-going system maintenance and upgrades.

Machine shops and other small- and mid-sized manufacturers have much to gain, and much to learn, about “information management" — a software environment that is multidimensional and still evolving, but which has been overlooked or avoided, or at least underappreciated, by shops that keep their focus on their products. This is understandable, considering that many of those shops have a small number of employees, only a few of whom may need to keep track of orders, process data, and other information that is peripheral to producing finished products.

But it matters now, because of changes in the manufacturing landscape: smaller manufacturers are consolidating, for all the normal and obvious reasons, meaning there are more opportunities to line up new business.

It’s also a fact that OEMs in many industrial segments (automotive, aerospace, energy) are streamlining their in-house manufacturing to cut costs, but at the same time expect to improve their supply chain effectiveness. Again: new opportunities for manufacturers who can make their services available.

In line with both these trends, offshore manufacturers are seeking to line up regional product sources, and qualified shops can quickly elevate themselves to become global suppliers if they have the right systems in place.

Epicor is betting on the confluence of these trends with the introduction of its first cloud-based ERP, Epicor Express. To the uninitiated, the “cloud" is a way of describing computing resources that are vast and powerful, but unseen. Think of the electrical grid that supplies your home: you may have a circuit box in the basement, but all the generating, storage, transforming, and delivery of power happens offsite. That’s how Epicor will allow manufacturers to adopt its latest version enterprise resource planning “solution," Epicor 9. Offsite, unseen, powerful.

“Cloud computing" is already well established in the manufacturing technology sector, i.e. machine shops. It is the same model in use by machine builders for remote performance monitoring of the machines they install, and it is the basis for MTConnect, the emerging industry standard for organized retrieval of process information from CNC machines.

For ERP cloud computing is a credible delivery model for smaller manufacturers, according to Epicor, because of the advantages it brings for their operations and the opportunities it creates for their businesses, but also because subscription-based licensing — Software as a Service, or SaaS — suits their economic circumstances. SaaS-formatted ERP is already available from various other developers, but those models typically cater to larger manufacturing organizations, or indeed to OEMs. But the advantages of SaaS — lower entry costs, shorter deployment time, elimination of hardware and software maintenance, vendor-managed upgrades, global availability, seamless integration — apply equally to smaller manufacturers.

Epicor states that Epicor Express was developed with an understanding of the fiscal complexities, capital constraints and challenges smaller manufacturers face, that SaaS delivery reduces IT complexity so that the manufacturers can start quickly, with lower ongoing operational costs.

The subscription-based licensing model means there are no large up-front costs. The monthly fee covers everything: software, hardware, operating system, support, training resources, and on-going system maintenance and upgrades. Epicor states that the combination of the subscription model, low capital outlay, and a streamlined implementation (up and running in as little as 20 business days) means that businesses can achieve ROI quickly.

“We’re excited to be delivering a compelling new solution to a market that’s been particularly underserved," states Epicor chairman, president and CEO George Klaus. “The cost savings are undeniable and well-suited for today’s economic climate, as Epicor Express eliminates many of the barriers that keep job shops and smaller manufacturers from implementing or upgrading to the enterprise-class software they increasingly need to support innovation and growth. The investment we’ve made in an agile, on-demand, multi-tenant business architecture means that even the smallest manufacturer can benefit from the advantages of a comprehensive ERP solution delivered via the Cloud."

The developers detail that Epicor Express functions include customer relationship management (CRM), financial management, production, product and material management functionality, as well as business intelligence, business process management, and the established Epicor ICE business architecture to promote internal process efficiencies, user productivity, “and ultimately enhance bottom line profitability."

The effectiveness of these modules within the Epicor Express deployment model mean that the subscribers can focus on their core business operations rather than managing IT. They have no IT overhead, so businesses are able to stay up-to-date with software and security updates, day-to-day system maintenance and business continuity assurance. All of these needs are taken care of for them by a shared data center.

Among the first manufacturers to go live with Epicor Express, is Chirch Global Manufacturing, LLC, a worldwide designer/builder of close-tolerance progressive dies and manufacturer of high-quality metal stampings and assemblies. Managers there wanted an ERP solution that would empower its manufacturing network and business partners to “compete with anyone … anywhere in the world," with high-quality, low cost-manufacturing.

“The Epicor Express SaaS model allows us to focus on our core competencies and more important initiatives, such as growth and expansion, rather than managing networks, hardware and software," explained Chirch Global CEO Anthony L. Chirchirillo.

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