Collaboration in the cloud

The case for moving enterprise resource planning (ERP) systems to the cloud isn’t a new one. For the past 10 years, vendors have been communicating the benefits of having software hosted at a remote location and accessed via the Internet, and for just as long manufacturers have been trying to discern truth from sales pitch.

To be clear, convincing arguments can be made for the cloud, including reducing the total cost of ownership of the software, faster deployment, and improved response time when issues emerge. But one of the most important arguments for moving business management applications to the cloud is collaboration.

A key premise is that cloud deployment facilitates better collaboration. This assertion is predicated on easy system access and ease of use. (A business that transitions to the cloud as a platform is typically moving to web-based applications that can be accessed via a variety of devices: desktop PC, shop floor kiosk, tablet, or smartphone.) If a company gives its vendors, customers, contract partners, and remote staff login credentials, they can instantly connect and collaborate with one another. The result is modern ERP software that connects all aspects of modern manufacturing value chains.

Collaboration in the cloud is universally appealing, but most compelling for today’s modern manufacturing environments. Here are seven reasons.

1. Real-time Production Forecasts

When every sales and distribution work load is centralized into a single ERP package, the production and procurement staffs have the ability to respond much faster to shifts in consumer demand. A sudden jump in demand for a certain recurring job order or a more subtle and difficult-to-detect gradual increase in demand across several similar customer channels can trigger an immediate response in production instructions. Production schedules that don’t include this real-time input expose companies to material gaps and risk scenarios that cause production lines to come to a halt.

The cloud eliminates silos of information that are maintained across the organization and centralizes them into a single system, making it easier for production staff to collaborate with and schedule resources to meet sales commitments.

2. Production Expertise and Innovation Sourcing

Cloud-based ERP fosters an enterprisewide sense of transparency and visibility across the organization. A unified and universally accessible system available across a company makes it easier for design and production staff to peer into the sales cycle and offer their insight and experience.

Engineers can review the next month’s potential job runs and identify opportunities to streamline production, consolidate raw materials purchasing, or perhaps offer expert insight into how a potential product can be made faster and at a reduced cost. In this way, back-office systems such as ERP become key to competitive advantage.

3. Customer Empowerment

Enabling customers to directly access their data housed within a business management application increases customer satisfaction and sales efficiency, and allows for better use of staff allocation. Cloud applications generally have intuitive user interfaces, which are easier for customers to learn.

And perhaps more important, the apps are purpose-built on a security model that makes accessing the right data efficient yet secure.

4. Connected Experience and Insight

With a broad community of users across the organization (and into the network of connected vendors and contractors), businesses can amass large pools of talent to quickly troubleshoot problems. With the emergence of social applications within ERP systems, it is not uncommon for a question to be asked and answered within moments.

Many of these social tools are available for on-premise ERP systems, but deployment in the cloud makes it easier to include talent outside a company’s firewall as well.

5. Visibility Into Supply, Order Status, and Exceptions That Require Attention

When production details (schedules, product status, and availability) are accessible to everyone via the cloud, a business can improve the overall operational efficiency of all connected work flows. Having advanced knowledge about production delays provides insight on how to respond if action is necessary. It also provides peace of mind when someone wants to see if production is still on schedule.

6. Shortened Cycle Times Among Suppliers, Distributors, and Field Staff

Manufacturing complex products typically involves input from designers, production staff, external contract vendors, and operations staff. The cloud creates an environment where interactions happen in real time, eliminating inefficiencies while gaining faster results. Additionally, bringing customers into the loop early in a design discussion further shortens production cycle times.

A recent report (“SaaS and Cloud ERP Observations,” Aberdeen Group, December 2013) noted that organizations with a cloud-based ERP setup had a 24 percent decrease in the cycle time of key business processes over the past two years.

7. Improved Field Service

Today’s field service technicians and sales representatives are armed with tablets, smartphones, and other mobile devices, enabling them to access original 3-D CAD/CAM files, review service logs, determine warranty eligibility, update records with photos, order parts, and schedule the repair work—all while out in the field. Field service using cloud-based applications can expedite service calls, reduce errors, and eliminate the reams of paperwork that field service personnel typically do not enjoy.

While companies have many reasons to move to cloud-based ERP, the most compelling case is in its ability to enable critical collaboration. With all aspects of a company and its supply chain working more closely together, a manufacturer can enjoy productivity gains and maximize its competitive advantage.