Cloud // Software as a Service
Commentary
12/23/2013
09:06 AM
Sandra Kurtzig
Sandra Kurtzig
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Business Apps Belong In The Cloud

Cloud apps provide agility, and agility is crucial for manufacturing companies. Here's why.

Manufacturing companies need to change their worlds because the world around them is changing. To survive in the new global economy, companies need to respond quickly to business demand. They're acquiring new businesses and have to get them up and running quickly. They're adding new products, partnerships, and suppliers to satisfy their customers. They have employees and clients who expect real-time information and responsiveness.

What is agility?
Agility is the ability for a company to react quickly to changes in business conditions without a lot of disruption. That means the ERP system has to be easy to use, customize, and integrate with existing technologies. It has to offer continuous visibility. The agile manufacturer needs to respond quickly when requirements change. If a part that has been ordered is suddenly not available, or a better, cheaper, replacement part comes to market, the manufacturer needs to find out right away, and make rapid decisions to bring the product to market in a timely and efficient manner.

The factory of the future
According to the IDC report "The Journey Toward the Factory of the Future," 43% of manufacturers are building the factory of the future. The new factory will respond to several trends, including new customer fulfillment strategies and supply chain models. As a result, the factory of the future will require many features, including real-time processes and visibility to support business demands. It will also benefit from collaboration and mobility.

[ What does the future hold for cloud computing? Read Cloud Computing: The Next Generation. ]

Collaboration is one of the keys for the agile enterprise. The ability to collaborate, along with a reliable audit trail, enables companies to realize several critical goals:

  • Take advantage of new opportunities as they arise. By sharing live data throughout the supply chain, all business partners can respond quickly to changes in demand, cost and availability.

  • Boost internal productivity. Collaborating in the cloud means sharing the right data with the right people throughout the company. It means giving employees access to the information they need, and boosting their productivity while improving communication across departments.

  • Improve communication with customers. Collaborating in the cloud means sharing information with customers to make you a more effective partner. Customers can view invoices, payments, RMAs, credit memos, shipments. The company can share whatever data it wants based on its business requirements.

Mobility is becoming an increasingly valuable tool for modern manufacturing companies. According to the report "The State of Mobility in Manufacturing," produced by Motorola, now owned by Google, companies can save up to 42 minutes per employee per day with mobile applications. The most popular use cases are inventory and materials management, field sales, and shipping and receiving. The ability to have real-time visibility and respond on the factory floor, or in the field, makes employees more efficient, and enhances the company's ability to respond to their clients.

How does software in the cloud help?
Software that has been built or "born" cloud is architected for continuous innovation. The architectural elements that are important to enable this are:

  • Multitenant infrastructure ensures that the software is always up-to-date.

  • "Point and click" customization makes it easy to add new fields, change workflows and quickly build reports and dashboards. And those changes are protected during updates. So, this makes it easy to adjust your business processes as your business changes.

  • Open APIs make it easy to extend your business processes to new or existing applications. And some cloud solutions are built on a platform that supports custom development or offers hundreds of complimentary applications that you can add as easily as you add an app to your phone today.

Cloud solutions incorporate the latest technology, such as real-time processing, social, and mobile, so you can apply these technology advances to advancing your business.

Cloud-based business applications give companies many advantages over on-premises systems, on top of savings in total cost of ownership. They're inherently easier to use and extend. They allow manufacturing companies to get closer to their consumers because it's easier to add the features they need. The agile manufacturer can more easily react to changes in a world that expects quick responses and results.

Sandra Kurtzig is chairman and CEO of Kenandy Inc., the leading producer of cloud-based ERP software for global enterprises. She is the founder of ASK Computer Systems, which produced ERP software for minicomputers and became one of the 10 largest software companies in the world.

Emerging standards for hybrid clouds and converged datacenters promise to break vendors' proprietary hold. Also in the Lose The Lock-In issue of InformationWeek: The future datacenter will come in a neat package. (Free registration required.)

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RobPreston
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RobPreston,
User Rank: Author
12/26/2013 | 2:34:46 PM
Re: High Standards
Thanks, TerryB. I appreciate the note.
TerryB
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TerryB,
User Rank: Ninja
12/26/2013 | 2:14:39 PM
Re: High Standards
Fair enough, Rob. I guess I didn't realize all the articles weren't commentary of some kind. But that one was clearly not the norm for you guys. There was no pro/con discussion whatsoever in this article, it was basically "you should buy software like we sell because I believe it is the future!". Well duh, you are CEO of a company in that market, I hope you believe!

InformationWeek sets a high standard with great stuff like we get from Coverlet. This one clearly doesn't meet that standard. Still love InfoWeek though and read at lunch daily, no plans to change that practice.
RobPreston
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RobPreston,
User Rank: Author
12/24/2013 | 9:30:22 AM
High Standards
Folks, let's not overreact here. First of all, this is a commentary, not a news story, and it's clearly labeled Commentary. So by definition this piece represents someone's point of view. It's not a reported story. Second, we've clearly indicated what the author's vested interests are, in her bio at the bottom of the story. It's up to the reader to decide how much credence he or she wants to give to Kenandy's POV given her vested interests.

That said, these kinds of Commentaries remain the exception on InformationWeek.com. We don't publish a lot of proposed articles from vendors, specifically in cases where they're thinly veiled ads. We thought this Commentary was different. Kurtzig is well respected industry-wide. And we thought she had something to say. If you don't agree with what she says, that's of course your right -- and we welcome your feedback and disagreement in this Comments section. That's what it's for.

I've talked with lots of CIOs who are not ready now to consider moving their ERP apps to the cloud. But many of them say they're starting to consider such a move. So it's not a ridiculous proposition. It's worth discussing and debating.

As for Sacalpha1's offer to write for InformationWeek, why don't you drop me an email and propose such a piece? If you have something to say and the first-hand experience to say it with conviction, contact me. How about you write the counter-Commentary to the above piece, drawing on your experiences? You'll find that InformationWeek isn't "getting worse and worse" but will hold you to a very high standard.

Sacalpha1
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Sacalpha1,
User Rank: Strategist
12/24/2013 | 2:48:35 AM
Info Week Gets Worse and Worse with Shoddy Reporting
This is ridiculous for InformationWeek to publish an article from a software vendor.  This article is nothing more than an ad!!!!!  Obviously she is gong to say the cloud is wonderful and the only option if you are to be a well run company.  And of course, this is just not true.  Cloud solutions can be a good fit for a smaller to mid market sized company that does not have the talent, focus and/or funding to implement an on premise solution.  Cloud solutions can also be a good fit as point solutions, especially when some rogue department (read not supported by corporate IT) is buying a solution like Marketing or HR.  For larger companies, cloud solutions tend not to be a good fit for the core, integrated functions of order management, distribution, manufacturing, procurement, and finance.  First, you need a single, truly integrated solution with the same data model to efficiently and effectively run these areas on an integrated basis, which is what is called for in today's global economy.  You also need deep and broad capability which does not exist in the newer cloud applications.  If cloud was so wonderful, why have the Fortune 1000 not thrown out their core ERP systems and replaced them with some cloud solution.  They have not and they won't.  SAP, Oracle, JDEdwards, etc. have their place and are here to stay.  I'm SICK of the unsubtantiated hype around cloud.  I want someone who thinks tier 2 cloud vendors are really going to replace top tier core ERP solutions to give me 10 specific examples of Fortune 1000 companies who have swapped out their top tier core ERP for some no name tier 2 or tier 3 cloud solution.  That's only 1%!!!!  Surely some one can come up with 1% if the cloud hype is really all true!!!!


@ InformationWeek:  Since you seem to be willing to publish articles (ads) from questionable sources with questionable motives, why don't you pay me to write some articles for you.  I am imminently more qualified than this woman.  I have implemented a number of ERP and CRM solutions, worked for a number of years at Accenture doing large scale business transformation, have worked as a leader in corporate America for a number of years, and currently work as an independent consultant with no allegiance to a particular solution or technology.  At least I will substantiate my claims with facts!!
TerryB
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TerryB,
User Rank: Ninja
12/23/2013 | 8:55:16 PM
Re: Kurtzig made ASK a major supplier to manufacturers
So do I. I've been working on ERP systems for manufacturing companies since 1985. A partial list includes American Software, JD Edwards, Infinium 2000 and BPCS. Our global company is trying to deploy AX Dynamics at several of our units now, and failing miserably at it. I have never even heard of ASK ERP system, so don't try and convince me they are battling SAP for dominent market share. I never saw one install during my 3 years I spent consulting between working for manufacturers directly. I'm not trying to insult her or ASK, it may be fine software. But don't oversell where message is coming from either, she is trying to drum up sales.

Vanilla ERP, whether on premise or in cloud, can only be used by the simplest of companies. Otherwise you have to modify the code. No customizable system can touch that flexibility. You can argue people like me who do it are disappearing like dinosaurs, that is probably true. But that is the only way to gain complete control of your system in a cost effective manner.

In 2010, due to Corp negotiation for licenses when our current company was spun out of another, we lost all rights to source code for the customized BPCS system my business unit was using. That blocked me from ever being able to upgrade again. Since I had written many, many integrated applications to fill in the BPCS gaps for previous 10 years, I spent 6 months writing my own code to replace the functionality of the core BPCS system. I'm talking Inv Control, A/R, A/P, etc. We still use BPCS for General Ledger, no source code modifications were in that piece. My software interfaces with BPCS G/L thru their batch voucher import.

So you don't have to agree with me, but I've been in this business as long as she has, probably longer.
J_Brandt
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J_Brandt,
User Rank: Ninja
12/23/2013 | 6:23:40 PM
Re: Credibility Required?
She may know where of she speaks, but she presented a very one-sided view.  Things aren't that rosy.  Terry you present some great arguments.  Some companies aren't ready for the cloud.  Some cloud providers aren't ready for some customers.  If the interest were in presenting an education on the issues, then you have to present the bad with the good.
cdinger
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cdinger,
User Rank: Apprentice
12/23/2013 | 4:20:15 PM
Re: Credibility Required?
Terry,

Agree that many articles are self serving advertisements but there are many informed folks out there that are objectively covering the Cloud.

Troubling, Challenging 2014 ERP Predictions

Summary: The ERP segment is undergoing a lot of change. Change, though, can create some uncomfortable moments for some folks and ERP vendors, customers and integrators will definitely feel something next year. What are some of these challenges and who will need to adapt?

 

For the time being, some customers will license an add-on product or two from their old ERP vendor. But, that time is coming to a close as cloud ERP suite sizes are growing in breadth and depth. Just look at how big the ERP suites of NetSuiteFinancialForceRootstockSalesforce and others are growing. The old oligarchy days are coming to a close.

 

It's impossible to private cloud everything," Gartner Research Director Michael Warrilow was quoted by CIO as saying last week. "We will see ever-more public cloud adoption. The public cloud is probably going to be 70 to 80 percent of cloud workloads."

 

 

http://www.zdnet.com/troubling-challenging-2014-erp-predictions-7000024439/

 

cbabcock
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cbabcock,
User Rank: Strategist
12/23/2013 | 2:09:31 PM
Kurtzig made ASK a major supplier to manufacturers
Sandra Kurtzig is the founder of ASK Computer Systems, a supplier of ERP for minicomputers and one of the largest companies focused on manufacturing software in particular in the world. She knows whereof she speaks.
TerryB
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TerryB,
User Rank: Ninja
12/23/2013 | 1:59:44 PM
Credibility Required?
What the heck? Why would the CEO of a company that sells cloud ERP software say anything but everyone should use it? Smart on your part to get free advertising versus those "paid advertisements" you usually get this type of propaganda from.

When you are in the cloud, you have no access to source code. "Custom configuration" and API's are not even close to what you can do with access to source code. If your business is so simple and like 1000 other companies, then you can use the cloud. If you want to pay lifetime rent instead of owning, of course.

The argument the vendor will keep updating the software for you, making your business better is pure hype. At least 90%+ of changes made between versions are absolutely no help to any particular business. Just how are you going to improve Inventory Management on a quarterly or yearly basis? It's just a bunch of bug fixes and obscure features that very few will ever use.

Not to mention my favorite thing with cloud and the factory floor: Do you really want your production dependent on a WLAN connection?  Maybe you can put in truly redundant WLAN access but at double your network cost. So how is that cost effective versus buying and running on your LAN?

Have someone write this article who doesn't sell cloud ERP software. If you can find them. Cloud ERP is great for the people who write and sell it, that's about it. The exception is a smallish, truly vanilla company who doesn't have the capital to buy an on premise system or access to either internal or 3rd party IT people to maintain it.
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