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Cloud ERP for Manufacturers

Plex OnlineWhite Paper

• Manufacturers have legitimate questions and concerns when contemplating a transition from a legacy, on-premise ERP solution to a Cloud ERP system.

• Cloud ERP solutions have proven their viability and superiority when compared to on-premise competitors when it comes to security, business continuity, cost and other factors.

• Data ownership should always be retained by the customer, with data available at any time.

At a Glance

Why the Cloud Is More Than Hot Air for the Manufacturing Enterprise

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The Way We Were

Before the advent of the now mainstream “Cloud,” there weren’t any delivery options for providing access to mission-critical software programs for the business enterprise. A company would choose a vendor, build out the IT infrastructure necessary to run the software, hire a staff to implement, deploy, test, and apply security patches – and engage expensive consultants to ensure the software actually addressed the unique needs of the business. This was the method whether you were deploying customer relationship management (CRM) systems, manufacturing execution systems (MES), quality management systems (QMS), enterprise resource planning (ERP) systems or any number of other industrial software solutions.

All of the requirements were costly and time-consuming investments, but necessary to reconcile functionality gaps and create operational efficiency. For manufacturers, ERP systems integrated all of the business processes that enabled them to save time and expenses. More informed decisions could be made quickly, with fewer errors. And perhaps the most impactful result was that data became visible across the entire enterprise.

Having an ERP system was always a foregone conclusion for manufacturers; without one it was impossible for a large manufacturer to operate efficiently and compete in the global economy.

A New Century, A New Way of Conducting Business

The 21st century brought more than relief of surviving the Y2K scare. It also introduced an increasingly popular mode of delivering applications to businesses. What was first referred to as Software as a Service (SaaS) later became more commonly known as Cloud computing. And the benefits soon became apparent to any business seeking to improve operational efficiency and reduce waste.

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Free from the need to maintain an IT environment and data center, businesses employing the Cloud for delivering mission-critical applications like ERP were now able to focus on their core mission – producing a product – not maintaining a software technology product with all of the tasks associated with that critical responsibility.

Key benefits delivered by the Cloud when compared to legacy, on-premise ERP systems are minimal to zero capital outlays, fewer required IT resources and an easier path to implementation and integration.

Overcoming Concerns

The Cloud was initially looked at with suspicion. Large enterprises were reluctant to commit to the model, and for a good reason: when your production is dependent on a technology, your company’s survival may be threatened by an outage or significant downtime.

• Security’s a concern. Why should I trust a third party with my proprietary data?

o For any mission-critical service, a company needs to choose a well-qualified provider with impeccable industry certifications. When a company chooses an appropriate vendor to house its data “in the Cloud,” it is enlisting a firm that has dedicated security protocols and processes. In addition to the physical security implemented at modern data centers – compliance with GR-3160 NEBS (Network Equipment-Building System) requirements and the Telecommunications Industry Association’s TIA-942 Telecommunications Infrastructure Standard for Data Centers – the IT infrastructure at a manufacturing facility likely exceeds whatever the company has on-premise.

o Additionally, studies show that data is more secure when hosted by a third party than in an internal system where disgruntled employees could retrieve and distribute information to harm the employer.

• Business continuity is a critical consideration. Can I trust the Cloud to deliver?

o Most providers of Cloud-based solutions have highly reliable and secure data centers. For example, Plex Systems, provider of Cloud ERP solution Plex Online, uses two data centers with redundant

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infrastructures which replicate data offsite, and employ the latest in data-streaming technology. Situated hundreds of miles apart, if one data center were to be rendered inoperable due to a natural disaster or a terrorist event, the other would support the application. Customers would experience little business disruption. Plex Systems achieves an aggressive recovery point objective (RPO) and recovery time objective (RTO) goals of two hours or less – a target that would be prohibitively costly to meet for an on-premise system.

o Plex Online has an impressive record of avoiding downtime. In 2011, Plex Online logged a 99.996 percent availability which translates to a mere 23 minutes of downtime for the entire year.

• One size does not fit all, especially when it comes to ERP systems. I need to be able to customize to meet my manufacturing company’s unique needs.

o In the case of Plex Online, all subscribers access a single instance of the software, but they are able to request customized functions and use functions that have been developed for other users. This is a strength of the solution, not a weakness. The vast and growing Plex Online user community helps define attractive functions that improve the service. Users can opt to use the new features at any time or choose to ignore features that don’t provide value to their organization.

o Plex Systems utilizes vendors that can provide needed niche functionality such as tax management, trade compliance, e-commerce, etc.

• Who owns my data? What if the vendor I choose goes out of business or is acquired by another company?

o There is no question that the customers own their data, at least with Plex Systems. They can request a full extract of a portion or all of their data, at any time, which can be exported in several file formats.

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About Plex Online

Plex Systems, Inc., develops Plex Online, a Software as a Service (SaaS) or Cloud Enterprise Resource Planning (ERP) solution with specific features for the electronics manufacturing enterprise. Plex Online meets the demands faced by high-tech and electronics manufacturing companies including compressed product lifecycles, supply-chain agility, global visibility and regulatory compliance. www.plex.com.

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Cloud ERP for Manufacturers

The only charge from Plex Systems is on a time and materials basis, just like any request for a non-support-related request. Contracts between Plex Systems and Plex Online customers specify an obligation to return data if there is termination of the contract either by the customer or by Plex Systems.

o The bottom line is that ownership of data is always retained by the customer and is available at any time.

It’s important to conduct due diligence to determine the best technology solution for any manufacturer. It’s smart to ask the right questions to understand the track record and long-term viability of the company providing the application.

One incontrovertible fact is the Cloud’s ability to consistently deliver the application to the enterprise safely, predictably and with minimal interruptions.

When it comes to the Cloud for manufacturers, the outlook is sunny.

“The Cloud is a blank-slate opportunity for CIOs. It’s a

chance to move away from making sure that wires are

plugged in to making a difference in the business.”

Dennis Hodges, CIO, Inteva Products