In the world of enterprise resource planning (ERP), companies spend a lot of time on the software selection cycle. Determining which application will best fit the needs of the business also brings deployment model questions to the table. Currently, many manufacturers and distributors are trying to understand the differences between hosted ERP and SaaS (software as a service) ERP. Whether you’ve already chosen your ERP or are in the process of selecting your software, understanding your on-premise and cloud deployment options is key to enterprise resource planning success.
An application’s functionality is understandably important. The best fit that a company can find with its ERP system will very likely lead to a better implementation, with lower costs and reduced risk surfacing as essential benefits. Ideally, you’ll build a solid foundation for all business activities that follow your ERP implementation. Your computing costs should go down, and time formerly spent on technology and software should shift into more time to spend on your business.
What is ERP deployment?
A key consideration, one that I do not believe receives enough time and effort during the software selection phase, has to do with the deployment of the solution itself. The implications of such a deployment are life-changing for any company, and particularly influential in the manufacturing and distribution industries.
At the time of software selection, it’s important to understand how you intend to deploy your new ERP system. An application’s functionality is almost as important as the functionality itself. For this reason, you’ll want to ensure that the deployment model you choose successfully overlaps with the functionality that you need.
What is a deployment model?
By deployment model, I am not referring to the operating system or the underlying database management system, whether the system is Windows-or Linux based or whether it sits on top of an SQL server or Oracle database. Those are in themselves important considerations, but the deployment model has more to do with installation and accessibility. How will the application itself be installed and accessed by the customer?
What is cloud deployment?
There are two very general classifications of cloud ERP deployment models that you can make to try and understand your cloud options. I would classify these as SaaS (software as a service) and hosted deployments.
The Software as a Service Deployment Model
Software as a service, or SaaS, is the model in which the application lives somewhere in the vendor’s data center, and the consuming customer has no line of site to its deployment. The customer subscribes to the software and consumes the application on a client-only basis, often in the form of a web browser. There is no need to manage a complex installation or oversee the application’s administration. The SaaS deployment model limits your control by limiting your responsibility in regard to application management.
The Hosting Deployment Model
The other common deployment model you could classify broadly as hosting. In a hosted environment, the application is deployed to a known server architecture. This architecture could be an on-premise or a local host, or a colocation facility, but I’m seeing much less of that these days, except with larger organizations that are comfortable with large hardware investments. Most often, I find hosting to refer to some form of cloud data center hosting, where the resources are consumed over the cloud as a service. In this scenario, the software itself is purchased using a perpetual license model and deployed to and administered from a discrete platform.
Hosted & SaaS ERP: Two Roads Diverged
So SaaS and hosting are your two basic options for the underlying technology that will serve as the foundation for your ERP. If you are a customer in the midst of an ERP software selection journey, you need to understand what deployment options are available and how they differ, relative to the specific software you are evaluating. That said, I think some generalizations can be made regarding the two models.
SaaS itself can be divided into two categories. The first would be the family of applications that were built from the ground-up to be browser-based, web applications. Plex, NetSuite, and Salesforce are examples of purely web-based applications.
Another class of applications would be vendors who are retrofitting their older, on-premise applications to be web-enabled and centrally installed and administered, like any other SaaS application.
In general, SaaS is a great option, especially for what I would consider lightweight applications. The software as a service deployment model provides the functionality you need with a costing model that your accountants will like, and it does this without a lot of administrative IT overhead.
I say lightweight because I’ve found some challenges with some of the limitations of SaaS functionality. In my own efforts, working within various applications, I’ve found that SaaS applications provide a more limited functionality when it comes to the need for more robust capabilities. This is especially true in terms of reporting or administration, or in the construction of specialized business logic.
If you take a well-known software like Salesforce, for instance, and compare its capabilities to traditional on-premise enterprise systems, you’ll see some challenges or differences in the relative functionality of the two systems. An example might be the administrative tools provided to manage, load, and update data. The capabilities are somewhat comparable, but on-premise applications will almost always be more robust, easier to use, and more effective.
The Future of ERP Deployment Makes All the Difference
Currently, ERP software vendors understand this gap and are working to close it over time, but this process is years in the making. For vendors that offer both on-premise and SaaS versions of their applications, I’ve found that the functionality available in SaaS has a long way to go to catch up with their on-premise antecedents. If you were to purchase the SaaS version and the on-premise version of an ERP from the same vendor, you should expect the SaaS version to underperform compared to the on-premise version.
The resources on ERP deployment out there are not always very clear on what those differences actually are, especially when the information comes from the vendors themselves.
For a hosted model, whether it is some form of self-hosting on top of an infrastructure as a service model, or a managed hosting situation, where a group is providing the entire platform, you can think of it as an on-premise installation without the risks and costs and overhead that come with an on-premise install. This is great from a functionality standpoint, as the control provides over the server architecture allows you to really leverage the full functionality available to you as a customer.
From my perspective, the difference between SaaS and hosted ERP really comes down to expectations with regard to functionality.
I have seen cases during the software selection cycle where the solutions engineers of various companies demonstrate the capabilities of their ERP systems using their full-bodied on-premise versions, only for the sales reps to actually sell the SaaS-based version of the application to the customer.
This is done with the implicit assumption that the SaaS-based version contains all the rich features and functionality of its on-premise sibling. But as we’ve discussed, that this is not always the case, and I’ve known more than a few customers who express tremendous frustration over this experience—believing they are buying a luxury car, only to have the dealer deliver them the base model.
How to Choose SaaS or Hosted ERP
If you are looking at a software that sprung from the web fully formed, like a NetSuite or a Plex, the question is a little more straightforward. There is no option to host the application, and from a functionality standpoint, what you see is what you get.
But if you’re working though the decision as to whether to purchase the SaaS subscription license or the perpetual license of an application, you really need to understand whether the functionality will be available in both versions. Essentially, you need to understand how the user experience might differ between the two versions, and then make your choice from there.
Companies that need the robust functionality that comes with a perpetual license and an on-premise installation and can’t afford to lose that in moving to a pure SaaS or purely web-based architecture have hosting options. If you wish to avoid the liabilities and costs of an on-premise install, then you need explore some of the hosting alternatives available. There are plenty of benefits to be gained through leveraging the cloud:
the dynamic consumption model
the benefits of adaptive computing
With these in mind, your cloud migration should also be done in a process that ensures that you are leveraging the full functionality of the software and not limiting yourself, your business, and your future in the process.
Cloud environments like hosted or SaaS ERP systems demand that your team is ready to handle everything from basic business processes to highly sensitive data. Cloud ERP is becoming the go-to jump, and a cloud based software solution could become a downfall without expert project management.
Software applications are becoming more complex, and your ERP solution will change regularly as your vendor adapts to changing technology. Are you looking for help understanding cloud infrastructure? Our cloud computing consultants have answers. Whether you’re trying to head out of community clouds or get lightning-strike level understanding of single tenant infrastructure, our EstesCloud team is here to help make your business run better.
The 2020 shift to remote work forced small to medium companies to increase business automation. To quickly become touch-less and contactless, owners used technology solutions managed by third-party suppliers to guide the new network of online business communication, home offices, and third-party vendors. As the world reopens, AI continues to help businesses network for future growth, especially for organizations leveraging ERP (enterprise resource planning) software.
Large companies and global enterprises shifted their cultures to automation long ago. Cloud-based solutions are not new. Successful management of company resources has depended on internal or external IT support since the dawn of the internet. Now it the time for small and medium-sized organizations to access the same business automation tools used by the world’s wealthiest companies.
“As a Service” Business Strategy: Automation as a Service
AI supports your company reputation and culture, so it’s often best to consider automation with experts guiding the process. Focus areas might include the following:
GENERAL: How to automate business processes
SPECIFIC: How to use data analysis to optimize insight
INTERNAL: How to support employees securely as they interact with one another and with your customer base
EXTERNAL: How to keep your customers happy, even when supplies are running low and shipping times are burdening relationships
AI, AI, O!: Create a Real-Time Data Window For Your Business
Business owners use tracking tools and data analysis software to understand everything from organization performance to customer behavior. Google tracks search quantity and quality. Amazon compiles endless data on customer purchase intent. Apple allows customers to use their fingerprints, their voice, and their app interactions to optimize device interactions. Microsoft creates data for every email click and innovates based on how clients are using the software. All of this data is useless if not organized and managed properly.
The Automation of Cybercrime – When Malware Uses AI Against You
Ransomware is in the daily news because cyber warfare leverages the same technological innovations that global companies are using to stay ahead of the competition. If malware gets into your backups, you might have a security breach that turns your own AI against you.
Software as a service platforms are especially vulnerability because you’re completely depending on the third-party to handle a large piece of your automation. A hosted environment often provides a more secure infrastructure, especially for companies on the move. An off-site data center can be regulated by compliance regulations. The IT team is required to abide by best practices for cybersecurity. As a result, your data is set up, monitored, and maintained according to the highest security standards. This keeps ransomware from troubling your servers or your software.
Automation for CRM (Customer Relationship Management)
A business wouldn’t be a business without a product or a service to market and sell. Customer data is key to streamlining your sales process. AI allows you to track, analyze, and save valuable information about your relationships:
Business direction / business strategy
A business process review can be a great way to get instant insight into how your employees are supporting your customer base.
Pricing Automation: The AI Will Bill You Now
Automated pricing and billing is everywhere in the virtual world, especially when it comes to e-commerce. When customers shop for something using the internet, pricing visibility is critical to buyer engagement. “See the price in cart” might work, but “contact us for pricing” can be a turnoff in this new world of instant gratification automation and digitization.
Pricing can get complicated if you’re offering custom products or complex services. Let’s look at medical billing as an example of a complex business service. HIPAA regulates all third-party interactions. So medical professionals need to ensure that any automation tools that are outsources are in compliance with these medical industry standards. In manufacturing and distributions, everything from shipping costs to supply chain management falls within similar, often less famous, compliance regulations. Pricing and billing can benefit from automation, but the AI software must be managed according to professional standards.
Outsourced Services: A Bot That Never Sleeps is Part Human
To use the medical industry as an example again, anyone offering professional health services needs 24/7 IT support. Why? In the off-hours, portals are still open, networks are still vulnerable, and emergency services are offered around the clock. Often, small and medium-sized businesses can’t afford an in-house employee to handle the 24/7 monitoring of sensitive information and infrastructure. Automation software can help monitor your system while sleeping. If your data is sensitive, your AI tools should come with a 24/7 IT help desk that is continually on watch for a potential or an attempted security breach.
Computer systems are nothing without people. AI systems are developed as a way for machine intelligence to supplement the problem solving skills of people. Strong AI is impressive: computer science continues to build automation systems that play chess or accomplish specific tasks that most humans want to avoid. AI development continues to reduce mundane tasks within a data management system, for example. AI research is focused on creating vast and intelligent artificial neural networks capable of driving cars. To control systems remotely is no longer science fiction. With an intelligent system, even small business owners can save time on routine tasks.
Automate Your Virtual Presence
Your virtual office makes your online presence paramount to the reputation of your business. Other online interactions create a complex representation of who you are as a business owner. Do you have a website or a virtual storefront? A strong web presence can bring you global success, or propagate mass reputation damage. With an internet culture of constant connectivity, automation can help you reach potential clients, even while you are sleeping, by promoting your brand, your ethics, your differentiators, and your value that only you can bring to your customers.
E-commerce comes with high risk, but with proper technology management, the virtual markets can only bring success to your business. You might be able to open new sales channels by offering direct supply to potential and current customers. Don’t be limited by your zip code: use AI to grow your business outside of your region, offering more people the services and products that you believe in as a business owner.
Using Business Automation to Scale While Lowering Costs
AI should help you streamline operations so that you can optimize your budget. However, poorly managed automation solutions can quickly overwhelm your staff, opening the doors to chaos. Fortunately, this loss of productivity is easily avoided when automation begins with expertise. EstesGroup’s staff includes ERP and IT experts that bring complete understanding to your business:
Infrastructure planning and deployment
Enterprise risk management
Enterprise resource planning
Business process improvement
Save time and money while focusing on the work you love. As a Managed Service Provider and ERP consultancy, we can help you choose the latest business solutions that can help you avoid time-consuming tasks by safely using business automation to gain wealth, health, and reputation.
Are you ready to automate success? Let our IT experts help you up your AI IQ.
A Shifting Landscape is Changing Supplier Relationships
The past year underscored the impact and the importance of supply chains more than ever. For manufacturers and distributors, the criticality of a robust and flexible supply chain cannot be understated. Supply chains are dynamic—shifting forces raise new concerns, and what was a given yesterday could be a curveball tomorrow. Many of these things, in the broad context of the global supply chain, are outside of our control. That said, even with the variables that come from an evolving climate such as the current day, there are still many things we can control—things that we can do to better manage our specific supply chains.
New Supply Chain Challenges Require Adaptive Tools and Processes
Developing tight supplier relationships is key to managing changes in lead time, delivery, prices, and products.
Change and Opportunity
For many companies, managing the manageable comes through a tighter integration with suppliers. And in many cases, this is accomplished through collaboration platforms such as SourceDay. Portal-based integrations allow customers to work with their suppliers to manage purchase order requests, acknowledgements, expedite requests, exception handling, changes, and the variety of related processes and tools that come with supplier relationship management (SRM) systems. In working with our Epicor ERP and Prophet 21 customers, we’ve seen several principles embodied through the use of such platforms.
In manufacturing and distribution environments, Automation is often thought of as an improvement inefficiency. Automation in supply chains goes well beyond the simple idea of efficiency. Automation is fundamental to a portal platform like SourceDay, as it provides the bedrock for supply chain effectiveness and its related principles. For example, moving the process of acknowledging a PO from a collection of emails, text messages, and phone calls into a single point of contact builds the foundation for everything that follows: visibility, measurement, collaboration, etc.
Fundamental to the successful execution of a supply chain is the visibility of supply and demand between customer and supplier. Changes to global supply chains cascade changes onto suppliers, and concomitantly, their customer base. Lead times, lot sizes, pricing—all can be affected, and keeping these changes organized and updated in your ERP system begins with a customer’s clear “line-of-site” to their supplier’s reality as it evolves. Good data is fundamental to the function of a business system, as it drives all the behaviors of the system, and of the related users. This can be an either-or:
Is your data up to date and accurate such that you are making reasonable requests to your supplier?
Is the data in your system sending your buyers on supply missions that are doomed to fail?
Companies that can leverage the real-time feedback from suppliers are best equipped to make the act of acquisition a successful endeavor.
The value of a reciprocal relationship between customers and suppliers cannot be underestimated. Beyond the benefits already stated, visibility is fundamental to the development of a successful partnership with your suppliers. The creation of a clear communication pipeline between customers and suppliers allows for more collaborative options, including the ability to quickly adjust dates, shift demand patterns, manage pricing and course-correct, all early in the buying cycle, while options are still available.
KPIs and Metrics
Metrics are key to accountability; you cannot fix what you cannot measure. Can you quantify your suppliers on time delivery performance? Or do you need to perform an extraction from your ERP system, massage the data, such that it can be presented to the organization? Just as metrics are key to accountability, automation is key to developing consistent and timely metrics. For instance, the automation of the process of tabulating plan-vs-actual data without human intervention makes real-time visibility and measurement a reality.
But what are the metrics you need to successfully manage your supply chain? Supplier delivery performance is an obvious choice. What about acknowledgement rates? Are your suppliers doing a good job of acknowledging your purchase orders? Can you quantify this? Supply chain researchers have found that acknowledgement rates strongly correlate with on-time delivery performance. Thus, a company can view a supplier’s acknowledgement score as a leading indicator of their ultimate delivery performance. As such, when you bring in a new supplier, you should have the tools to quickly assess how well they are acknowledging their POs, even before shipments arrive.
Putting the Pieces Together for Wholesome Supplier Relationships
As companies implement and optimize their ERP investments, the search to better fine tune and extend their systems becomes the next priority. We’ve found that the extension of the supply chain thought vendor portals such as SourceDay to be one key way that companies maximize their ERP investments and optimize their internal and external business processes.
Are you in search of the next step to your ERP implementation? Come to our most excellent session with SourceDay on “Bridging the Gap Between Epicor and Suppliers for Distribution Companies” and learn how their solution can help you with supplier relationships.
STEP 1: Contact providers and arrange demonstrations
A new day is here and you can finally start contacting potential suppliers for your new software. If you already have a short list to begin with, you can start right away. Software suppliers come in several flavors, so it makes sense to set up multiple ERP (enterprise resource planning) solution demos. A variety of demos with help you find the perfect ERP software for your business. It might seem boring to sit through one software demo after another, but putting in the time to find the perfect fit will allow you to swiftly return to focusing on your business, rather than on its infrastructure. During your demo, be sure to also consider and question ERP deployment options. Your company might be heading toward SaaS (software as a service) when it’s truly a private cloud hosting platform that you need to sustain operations.
STEP 2: Compare different types of software suppliers
You might see a particular brand of software and one option is to get your software directly from the business that developed the system. Many work directly with end customers and have adequate tools to provide the support you need for implementation and maintenance of your system whether you choose to install it on premises or use the cloud version of the system.
There are providers that primarily are third-party consultants that can help you with some of the same software brands. Often these will provide better ongoing support compared to the developer company that has a continued interest in maintaining the software and perhaps less time to provide support.
Some of those third-party consultants represent more than one software brand. You might contact them regarding brand X but after getting to know your business they might suggest brand Y could be a better fit. You will need to make the choice and keep in mind that it is also possible that they earn more money from brand Y.
Another possibility is open-source software. These can be downloaded free or at little cost for your use. There are consultants that specialize in these systems much like those that represent branded software. If your business has substantial resources in software development and maintenance, this could be an excellent choice.
STEP 3: Make the right software selection contacts
Any of these sources can provide the support you need. Contact them and provide some background for your business, why you are looking, a description of your business, and a list of the requirements you have defined. Most of them will reply quickly and will be happy to introduce themselves and begin to get to know each other.
STEP 4: Control your software demonstrations
A vendor might suggest a demonstration of their software to enable you to make a choice. They already have a standard, prepackaged demonstration ready. Hold off because you should keep some control over the demonstrations. The company has your requirements you’ve provided, so they should be ready to demonstrate how the software answers to every one of your needs. Ask the vendor to customize the demonstration to show exactly what you have requested from the software.
Keep an open mind though. Their business is the software and they have experience with many customers. If they suggest that one of your requirements should be modified, they might be right. If they suggest that a requirement is not possible using their software, they might have a work-around that will satisfy your requirement. These are your choices. You can insist on your requirement list and simply keep looking at other software providers who can fill your needs.
Schedule a demonstration. Find a time that allows representatives from all your stakeholders to attend. Even if the software is intended for production, it will affect finance and engineering and others and they should attend for their own evaluation. If two demonstrations are needed to ensure your team can attend, ask the supplier to schedule two demonstrations.
STEP 5: Evaluate each software demo systematically
Before the first demonstration, prepare a common survey or questionnaire for your team. Ask each attendee to use a common format to evaluate the demonstrations. Collect the questionnaires quickly after the demonstrations. After several different demonstrations no one will be able to remember specific points and how each supplier covered specifics.
When the demonstrations are finished, combine the individual questionnaires into a common report. Work up a point value system for each question point. Summarize the demonstrations and total the points for each supplier. Ideally one will have more points and you will have your objective winner. You might ask one or two of the suppliers to provide additional demonstrations and reply to specific follow-up questions.
STEP 6: Check references and read customer testimonials
Contact the references your top supplier candidates gave you. Learn what they felt went well and what they wish might have gone differently. Ask if they know of any other business that used that supplier. Use the internet to find additional customers you might use as references that were not provided by the software supplier. When you feel you have found the right supplier, you can begin negotiations.
After the software demo, the software
Do you need help comparing software supplier data? Are you still watching software demo videos looking for differentiators? When creating a software demo, suppliers often skip the details, and our business experts can assist in determining potential pain points after your installation. Our IT experts can assist with everything from system software compatibility to software license protocol. Our ERP and managed IT specialists understand everything from source code to supply chains.
Sign up for a free demo of managed application hosting.
With summer in full swing, distributors are on the move, crossing docks, splitting shipments, and delivering goods by the truckload to a diverse array of customers. It is a time for expansion—of old trade routes of supply chains and of new opportunities as our reopening country rediscovers its possibilities.
Attend a 2021 Prophet 21 event in person or online
With user conferences back in the schedule for 2021, P21 users are highly anticipating the Prophet 21 user conference P21WWUG CONNECT in mid-August. This event serves as a focal point for the P21 user community and as a bookend for a busy summer. At the onset of the summer season, we thought it would be helpful to host our P21 summer summit as a prelude to the larger Prophet 21 community event. This also gives you the opportunity to open the summer with some new ideas for using your P21 application to its fullest capabilities.
Events like this are a great opportunity to review your application’s capabilities and find ways to improve internal processes, discover ways to reduce costs, and reveal methods to improve information flow and presentation. You’ll also surface steps you can take to better integrate Prophet 21 with suppliers and customers.
Our summer 2021 Prophet 21® event takes place on June 24, from 10:00 AM to 1:30 PM (Central Time). Three panelists will discuss topics pertinent to the P21® user community. The event is free, and all are welcome! This summit will also provide an insider’s view of the Epicor Prophet 21® solution for any distributor who is looking for growth opportunities that only a new software can provide.
Prophet 21 Event Itinerary
Server Best Practices for the Epicor P21 Environment
10 AM – 11 AM (CST)
Daryl Sirota, Executive Director of Technical Services at EstesGroup, will discuss server best practices for P21. Understanding the optimal means for deploying the Prophet 21 application has never been more important, especially with Epicor’s move to a new client-server architecture. Daryl will discuss some of the key considerations when deploying and maintaining your server stack. Daryl leverages 35+ years of IT experience to help customers develop server and cloud architectures that are robust, flexible and reliable. A veteran systems engineer and Microsoft expert, Daryl provides the stable technical foundations that allow customers to focus on their business. Attend this Prophet 21 event if you’d like to know how to create a private cloud for your ERP software.
Creating Financial Statements Using Financial Line Express
11 AM – Noon (CST)
Terri Gage, Senior Consultant at EstesGroup, will discuss the creation of Financial Statements. P21 customers express frustration in successfully creating financial statements, but the often forgotten Financial Line Express can bring ample help to your financial reporting needs. A longtime project manager, implementation consultant, and Prophet 21 specialist, Terri works with organizations to help them successfully implement and fully benefit from the P21 application, actualizing their goals of sustained profitability and business excellence.
Bridging the Gap Between Epicor and Suppliers for Distribution Companies
12:00 PM – 1:00 PM (CST)
Jim Frye, Enterprise Sales Director at SourceDay, will discuss how distribution companies bridge the gap between their Prophet 21 system and their supply chains. Distributors need to do many things to help secure their supply chains as the ground shifts beneath them, automating the mundane and improving collaboration, visibility, and accountability between them and their varied suppliers. Jim leverages 30+ years of experience working with Global Manufacturing Companies, big and small. His passion is to help organizations facilitate growth, reduce operating costs, and increase profitability through supply chain efficiency.
Our event concludes with an open Q&A session, allowing users to raise questions regarding the sessions themselves and the Prophet 21 application in general. Operations management strategies. Cloud server integration steps. Cloud hosting service risks. Prophet 21 cloud platform options. Global supply chain trends. Operation system updates. Dedicated servers, multiple servers, SaaS… from Prophet 21 consulting to server hosting, we have answers to your P21 ERP and IT questions.
Do you have questions you’ve been meaning to ask a consultant, but haven’t wanted to shell out the cash?
Now is your chance to do it–on our time and our dime!