More and more companies are turning to Cloud ERP to replace obsolete processes and improve business performance. With the following answers, Plex Systems expert Manuel Pumarada offers some insights that will help you plan and implement a successful Manufacturing Cloud ERP solution.
• Where do you think the manufacturing ERP saaS market is heading in the next five years?
We are excited by the trend for ERP in manufacturing. More and more manufacturers are considering the virtues of cloud computing and the associated benefits inherent in this delivery model. As a pure cloud company since 2001, we’ve proven the concept with our growing community of Plex Online users. We see the percentage of manufacturers transitioning to the cloud for its enterprise software growing with larger $1b+ companies adopting cloud solutions.
•There has been a lot of hype around SaaS ERP, are you starting to see a large upturn in your number of customers?
I’m pleased to note that we saw the superiority of the SaaS / cloud model earlier than most of our competitors. Many of the traditional, on-premise ERP providers saw the handwriting on the wall and tried to jump on the SaaS / cloud bandwagon with what we call “faux” cloud solutions. They essentially repackaged the legacy software and try to sell it as a cloud solution but without the advantages that a true cloud application provides. Our most recent revenue numbers for Q2 of 2012 reported that revenue for the quarter increased 24 percent and recurring revenue increased by 35 percent. We anticipate acceleration in new customers and revenues for the foreseeable future.
• Do you have any plans to roll out your solution to other countries?
Plex online is already in use all over the globe. We currently run the business of plants in Mexico, South America, Eastern and Western Europe, as well as Japan, China and New Zealand. Plex Online is configurable to accommodate virtually an unlimited number of foreign languages and other variables that are unique to different countries. The benefits for global companies with various facilities in multiple countries are first, that they can easily compare and contrast the output and processes of all facilities when a common system is used to collect and analyze data from the shop floor; and second, that they can easily launch a whole ERP to new plants without any additional IT headcount. One of our proactive accounts has rolled out several new plants without any intervention from Plex Systems.
• How configurable is your solution and do customers need to follow a template approach for implementation?
Plex Online is extremely configurable. As a single instance of software shared by all the customers, it offers virtually all the functionality a manufacturer could need to manage and track its manufacturing processes. Plex Online users have the option to turn on whatever functionality and features they require for their business needs. The fact that a metalformer, or a foundry or a food processor all use the same solution but with different features engaged is an indication of how configurable the software is.
• Can you explain your ERP implementation methodology?
We use an iterative project management model that accelerates learning and mitigates risks by allowing companies to experiment during the early stages of the project to make well informed decisions. Plex Online has a four-phase implementation and training strategy that takes place in stages: piloting, testing, systems enhancements, and go-live.
Hundreds of implementations have taught Plex Systems that the best approach to training is to conduct short training sessions and then have employees return to work. This allows them time to try out what they have learned and develop ideas for process modifications and system optimization.
Targeted and efficient just-in-time training drives a 98 percent customer satisfaction in Plex Online implementations — 32 percent better than industry average.
• Who do you think your ideal customer is e.g. standard manufacturing or complex manufacturing process?
Our ideal customer is a manufacturer or processor. They have complex manufacturing requirements and therefore need an ERP system with deep vertical capabilities. They want to reduce their cost structure by continuously applying lean principles for the reduction of waste. They have a performance culture, are not complacent, and continuously look for ways to do more with their ERP investment. Industries where quality and inventory traceability are critical – such as the automobile industry or food and beverage processing - are very well served by Plex Online.
• What are the reasons for companies selecting Plex Systems?
The primary reason a manufacturer selects Plex Online as its ERP solution is a desire to work more efficiently. Customers implementing Plex Online have a greater awareness of all of the manufacturing processes throughout the supply chain. They have less waste, a manageable inventory and easy access to reports to help management make informed business decisions. In addition, because the data is digital and saved immediately, there is a verifiable reduction in human error during data entry. Another attractive feature is the speed of implementation which is considerably faster than traditional, on-premise ERP systems. Finally, the cost is predictable on a subscription basis and there is no need for the company to purchase and maintain an IT infrastructure or have a staff dedicated to IT updates and software maintenance.
• Companies have concerns over ERP SaaS security, can you explain how Plex Systems manages security?
Companies should be concerned about security and we welcome the scrutiny. When a company chooses Plex Systems to house its data “in the cloud”, it is enlisting a firm that has dedicated security protocol 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 our data center facility likely exceeds whatever the company has associated with on-premise systems. Additionally, studies show that data is more secure when hosted by a third party than in an internal system where disgruntled employees may break into the system to steal and distribute information to harm the employer.
We find that the more due diligence a prospective customer does with our product and business practices, the more likely they are to join the community of Plex Online users.
• What is Plex Systems’ ERP pricing for ERP implementation and ongoing support?
The majority of both Plex and partner led implementations are Time and Materials engagements. Plex Systems is able to offer a tailored approach to deployment based on the customer’s scope and resource availability. Our typical implementation timeline is 4-6 months. Again, this is impacted by scope and the user resources that the customer is able to assign to the project. As each company has unique needs and varying amount of access to internal resources, the pricing models are variable and different for each deployment. Pricing is enterprise-based, rather than the typical user-based licensed. It ranges from $5K to $50K a month, depending on modules selected and the size of the enterprise. There are outliers on both the low end and the high end, but most deals fall in that range.
• What advice would you give to companies who want to improve the ROI on their SaaS ERP project?
I would advise anyone considering an ERP system to experience the Cloud solution by using it. The ability to access information— anytime, anywhere, on any device from a single system— makes it easy for more employees to share data and experience the benefits that a cloud-based system can deliver. Cloud ERP forces users to enter quality data which enhances the speed and accuracy of the decision making process. In addition to creating more efficient workflows, it also provides enhanced visibility into all facets of the production process. Our experience with customers deploying Plex Online is the impact on ROI is immediate and positive. When companies embrace SaaS / cloud ERP, particularly when transitioning from a traditional, on-premise system, there is more control and visibility into all of the various processes from the purchase and warehousing of individual components and material to the shipping of the finished product. There may be a need to transition to a new workflow but that invariably leads to a more efficient work process.
• Do you have any plans to add an “app marketplace” or work with partners to extend Plex Online’s functionality?
Plex Systems has a deep bench of partners that provide niche functionality of value for our community of users. For example, Pacejet is a company that specializes in multi-carrier shipping options and helps companies chose the least expensive options, provides labels and tracks the progress of shipments. We also have partners who provide tax services, production scheduling and advanced planning and many other functions.
One feature of Plex Online is our relationship with the user community through the Plex Systems’ Customer Advisory Board. Plex Online users often recommend and fund new feature development which is often shared by the companies that want to take advantage of the specific functionality. Consequently Plex Online is actually improved on a daily basis with new features and functions. Partners are engaged when they can provide a reasonable and effective solution that meets a business need. In terms of “apps”, while we already offer access for mobile devises, we are working on a very exciting project that we will be announcing later this year.