Part Two – 7 Qualitative Benefits of Cloud ERP
In our previous post, we talked about the quantitative benefits of Cloud ERP. And while improving ROI and costs savings are critical to manufacturers, the qualitative benefits of moving to Cloud ERP are just as important. Although these qualitative benefits are sometimes hard to quantify, they can be strategically more critical to your company.
Whether you’re looking to replace disconnected, manual spreadsheet-based processes or you’re held back by the limitations of your legacy ERP system, the 7 qualitative benefits of Cloud ERP described below can make a significant impact on your company.
1. Pursue a Platform Strategy for Digital Transformation
Modern cloud-based ERP systems should be part of your digital transformation strategy, but what does that really mean? Digital transformation refers to the integration of digital technology into all areas of your business, fundamentally changing how you operate and deliver value to your customers. Digital transformation promises to deliver improvements in operational efficiency across your entire supply chain, and help you build an advantage over your competitors.
We believe that the best way for manufacturers to achieve the benefits of digital transformation is to pursue a platform strategy, which is an ecosystem that uses a cloud platform as a digital foundation. Cloud-based platforms such as Salesforce have become especially popular because they support thousands of business applications including modern Cloud ERP. The benefits are described below.
Eliminate System Integration Headaches
Many manufacturing firms are juggling a variety of different systems to run their business, including CRM, sales order processing, design and engineering, product lifecycle management, inventory management, production management, supply chain management and financial management. To “integrate” these disparate systems, you have to build interfaces to link data between the systems, which then may have to be updated every time one of the multiple applications is updated.
A cloud platform strategy lets you bypass all of that. Instead of multiple software applications from different vendors running on different clouds and/or a mix of on-premise and cloud solutions, applications deployed on the same cloud platform are written to a standard specification. All of your applications are already integrated into the platform on one cloud. This is similar to how a smartphone works. For example, smartphone apps know how to use the phone’s camera. You don’t have to integrate it.
One Database Instead of Many
A modern cloud platform stores data from each application in a centralized database. The advantage of a centralized database is that it lets you access and analyze all of your data across systems, and it eliminates master data management issues.
For example, many firms run separate CRM and ERP systems, resulting in a divide between sales and operations. When you run a modern cloud-based ERP system like Rootstock Cloud ERP on the Salesforce Cloud Platform, the business silos that keep CRM and ERP data separate are integrated to provide a single, shared view of all customer interactions and your entire business. The single database allows additional benefits, including faster customer service, better corporate analytics and a better user experience.
A Cloud Platform Ensures Robust Security and Remote Access
Security measures to protect your data are essential to your business to protect customer, supplier, employee and other proprietary information. To keep this data safe, advanced security features have become increasingly important. But as the cost of these security measures continues to grow, it is becoming increasingly difficult for individual companies to make the large investments in advanced security necessary to protect their data.
By adopting a cloud platform strategy, all of those advanced security measured are maintained and updated as required by the platform because providing world-class security, systems and compliance capabilities is essential to a cloud provider’s business model. Consequently, cloud providers invest far more in security and compliance infrastructure than any one company could afford to do on their own. Their investment is shared across a variety of companies and they are able to achieve a more robust infrastructure as a result.
A good example is the Salesforce Platform and their security and compliance site Trust.salesforce.com. Be sure to check out all the security documentation and technical certifications they have attained after being in the cloud business for over 20 years.
The Covid pandemic has also changed how we work and expanded the need for remote connectivity. The advanced security provided by cloud platforms ensures that your employees can securely connect to each other and to the data they need to do their jobs at any time, from anywhere on any device.
2. Get a 360º View of Your Business – Real-Time Analytics
The pandemic has driven home the need for a real-time, 360º view of data. Companies need to keep a constant eye on orders, receivables, cash, supply chains, and production/capacity limits. Companies with older systems that feed data in batches through a series of interfaces and spreadsheets struggle with data latency and can’t get instant access to information.
For example. most companies on legacy ERP systems don’t have the ability to see key performance indicators (KPIs) in real-time across ERP and CRM. To obtain data, they either have to wait for their older, waterfall-style systems to conduct batch updates from one system to another, or they have to wait for a lengthy extract, transform, load (ETL) process to run from ERP and other subsystems into a data warehouse.
A modern cloud-based ERP solution that’s part of a platform strategy provides a significant qualitative benefit by replacing all of those processes with a 360º view of your entire business, which lets you:
- Get a real-time view of your entire business, literally from one dashboard with KPIs across, for example, both ERP and CRM.
- Easily access advanced analytics that let you spend less time preparing data for analysis and more time analyzing the data.
- Eliminate the burden of master data management and extraction, transformation and loading (ETL).
- Unlock the value of data trapped in spreadsheets and turn them into secure, trusted applications.
- Provide information such as inventory and production data to all your users so that front-line workers can be more productive.
- Run advanced visualizations, trend analysis and predictive algorithms.
- Monitor trends in the sales pipeline to visualize and marry supply and demand in dashboards.
- Monitor customer buying, service and payment trends to predict future purchases
3. Improve Customer Service with a 360º View of Your Customers
Eliminating the gap between ERP and CRM also allows you to become a more customer-focused company with improved customer service.
In this age of customer-centric manufacturing, customers expect quick answers to their support questions and quick resolution of their problems. You’re under increasing pressure to out-service your competition, so you must provide your support team with every possible advantage, including a complete 360º view of each customer.
Seamless integration of ERP and CRM delivers this advantage by letting you:
- View all customer information in a single place based on a single, consistent set of data.
- Drill down to view critical customer details from call centers into Cloud ERP.
- Track the complete service history for any product or customer.
Example: Salesforce Service Cloud and Rootstock Cloud ERP
When you use Salesforce Service Cloud with Rootstock Cloud ERP, the seamless integration bridges the divide between CRM and ERP to give you all the tools you need to deliver great customer service:
- Resolve Customer Issues Faster: Your service reps can access everything that a customer could ask from a single screen, thereby increasing first call resolutions and shortening the time to respond.
- Manage Customer Order Status and Changes: Your service reps have visibility into the customer’s case, which links to the sales order or the work order driving the process.
- Research Support History: The data that your service reps need to answer customer inquiries is often part of ERP, so integration to make this information available to customer reps is critical. For example, Rootstock Cloud ERP data includes product configuration information by serial number, so service reps can quickly look up device serial numbers as maintained at a customer site.
- Process RMAs More Efficiently: Your service reps can generate RMAs from sales order shippers, invoices or Salesforce service cases and include details specific to the item being returned.
- Service and Sell Warranties: ERP information gives your service reps all the information they need to service and upsell warranties. They can see whether a product is under warranty, if the customer has an extended support plan, and product shipping information.
4. Improve Employee, Customer and Supplier Collaboration
In our previous post, we talked about the quantitative benefits of increased collaboration. There are qualitative benefits of collaboration as well. Modern collaboration tools have become critical as every kind of business has to adjust to a remote workforce.
Collaboration occurs when your employees share access to the same source data and feel like they’re working on the same team. Improved problem-solving, brainstorming and work sharing all depend upon people viewing the same information, a benefit Cloud ERP provides that legacy or home-grown ERP systems do not.
Cloud ERP systems now include embedded social media applications that allow you to attach a conversation thread to any object, such as an opportunity, order or invoice. Conversations are connected in context to the data in ERP to create conversation audit trails among employee discussions. For example, employees may be discussing why an invoice wasn’t being paid or if a customer should be given a credit. The conversation is attached to the data (an invoice in this case), and isn’t separated in emails, voice mails and separate text threads.
Customer and Supplier Communities
If becoming more “digital” is in your plans, you’ll want to consider implementing customer and supplier communities using your cloud platform as a foundation. These collaborative communities can be set up much faster than traditional customer or supplier portals, and they can help establish and strengthen connections between your employees, customers and suppliers.
The single cloud database design mentioned above allows your team to securely reveal ERP and CRM functionality to customers and suppliers at a fraction of the cost compared to the old portal approach. Customers and supplier can perform their own self-service activities, including changing contact information, downloading invoices and purchase orders.
More importantly, you can turn your community into a forum and ecosystem meeting place. For example, Rootstock Cloud ERP on Salesforce provides a Rootstock Community, which provides a simple point-and-click interface where Rootstock customers can have discussions with each other; create and track support cases and enhancement requests; and access product documentation, release information and FAQs online.
CRM and SRM Become more Collaborative with Slack
Salesforce’s announcement about the acquisition of Slack for $27.7 billion turned heads at the end of 2021. One of the major selling points of Slack is its nearly universal adoption and ease in which text conversations can instantly turn into conference calls, screen sharing and on-camera interactions.
When combined with customer and supplier communities, Slack will let manufacturers get much closer and more interactive with their customers and suppliers. This article explains the benefits of Slack and the impact on Customer Relationship Management and Supplier Relationship Management.
5. Customize Your Cloud ERP Solution for Competitive Advantage
In the modern global marketplace, your customers’ demands are constantly changing, which means your business requirements are always changing. If you’re still running a legacy ERP system, then you know how difficult it is to customize the solution to these changing requirements. With legacy ERP, this process can be so expensive and disruptive that you may end up being locked into an old version of the software simply to avoid the pain of customization. It is estimated that one-third of legacy ERP users are not running the current version of their software.
Build Your Own Apps with Low Code ERP
Research firm IDC estimates that by the end of 2021, 30% of manufacturers will turn to low-code technology to help business users create business-relevant applications without needing coding skills to keep up with the changing demands.
Low code customization technology lets you use point-and-click tools to create custom apps that meet your own specifications, rather than starting from scratch or having to rely on expensive programmers. Functionality components act like building blocks that let you modify, create and publish applications much faster than the traditional legacy development/change management approach while giving you the ability to upgrade applications easily.
Low code customizations let you:
- Tailor Cloud ERP to your unique business processes: Generic apps with too many steps mean workers are wasting time, missing opportunities or making mistakes. Low code ERP lets you reduce wasted time and improve the speed of your key processes.
- Bridge the skills gap: Hiring and retaining great help is one of the biggest challenges for manufacturers. Customization can add intelligent guidance to reduce training, bridge the labor-skills gap, and increase productivity.
- Citizen Developers: Forget that IT bottleneck. Low code ERP unleashes the power of all of your employees to create customized apps that differentiate your business.
- Rapidly Changing Business: As we mentioned earlier, your business changes all the time. Your systems need to adapt to those changes just as quickly. Low code ERP helps you avoid disruptions or productivity hiccups while saving time and money.
6. Increase Manufacturing Flexibility and Agility with Cloud ERP
Manufacturers must not only respond to changing customer demands, but also support new business models, including more personalized products and products delivered as a service. Most manufacturers must now support multiple modes of manufacturing. One of the big qualitative benefits of Cloud ERP is how it helps manufacturers become more flexible and agile operationally to meet these changing requirements.
The COVID-19 pandemic was a prime example of why manufacturers need flexibility. For instance, some of Rootstock’s customers had their primary markets shut down, causing them to pivot into different markets. Companies such as Unionwear, Matouk, and Kira Labs switched over from their primary markets to help support the COVID-19 effort. Unionwear is making gowns and face shields, Matouk is making washable face masks, and Kira Labs is making hand sanitizers.
To give you an idea of how agile these companies are, Unionwear, for example, was able to shift over to a completely new product line in a couple of days to be able to make 15,000 face shields and 1,200 gowns per day, with capacity to produce more. They did this while also revamping their own shop for social distancing and having some workers do production at home. They were able to keep workers on the payroll while producing really valuable personal protective equipment (PPE) for the COVID-19 effort.
Here are some ways that Cloud ERP helps you increase flexibility and agility:
- Scale your solution up or down to meet changing business requirements.
- Switch between engineer-to-order, configure-to-order, build-to-order and make-to-stock production modes.
- Support personalized manufacturing, which may rely on a combination of custom components, configurable components or make-to-stock components.
- Take advantage of Bill of Material and routing flexibility to design and build new product types and change the order of how operations are executed.
- Tailor costing methods to various types of manufacturing (i.e., make to stock vs engineer to order).
7. Solve the Manufacturing Workforce Crisis
In a recent quarterly economic survey, the National Association of Manufacturers (NAM) predicted a shortfall of almost eight million workers by 2030, bringing with it potential revenue losses as high as $600 billion.
The main causes of this workforce crisis are retiring baby boomers who take their skills and experience with them combined with the inability to recruit younger workers to replace them.
Younger workers grew up in the digital age. They are accustomed to immediate access to information, communicating with their peers via social media, and most of all are comfortable using digital technology like mobile devices and web-based software. They expect these technologies to be present in their jobs. If these technologies are not available in manufacturing, these young workers will look for jobs elsewhere. Older systems and manual processes in manufacturing will simply not attract young people with the skills, aptitude and preference for high-tech jobs.
The manufacturing industry itself is in the process of moving from manual processes and older technologies like on-premise ERP while trying to invest in newer technologies such as IoT, social media and advanced analytics. Not only has it become imperative for manufacturers to hire people with the skills to help with this transition, but it also important to have a digital strategy in place to attract these workers. Cloud ERP built on modern Cloud Platform can be part of the solution.
You’ve seen that Cloud ERP systems provide a number of key benefits, both quantitative and qualitative. A modern Cloud ERP solution can provide you the digital foundation you need to compete for customers and employees while helping you form tighter bonds with both your customers and suppliers. With Cloud ERP, you’ll be better positioned to out-compete and out-service your competition while having the operational agility to react quickly to changing market conditions.
How strategically important are these qualitative advantages to your company?