Published on February 6, 2014
Using The Cloud To Drive Innovation Northwest Food Processors Association January 14 2014 Patrick Fetterman Vice President of Product Marketing Plex Systems
1/9/2014 | Page 2 © 2013 Plex Systems Proprietary + Confidential Two Things I’m Talking About Today 1. Cloud Computing: the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer. 2. ERP (Enterprise Resource Planning): an integrated software system that serves all departments within an enterprise; comes from the manufacturing industry.
© 2013 Plex Systems Proprietary + Confidential THE CLOUD HAS TRANSFORMED ENTERPRISE SOFTWARE FINANCE What’s Next? MANUFACTURING HR, PAYROLL, TALENT MANAGEMENT CUSTOMER SERVICE SALES & MARKETING
Cloud-based Applications Are Coming Faster Than You Think… Global Survey of 572 Business and IT Executives
1/9/2014 | Page 5 © 2013 Plex Systems Proprietary + Confidential Cloud is the next ERP Technology Wave The Evolution of ERP: Cloud ERP Client/Server ERP Service-Oriented Architecture ERP Minicomputer MRP II Mainframe MRP 1980 1990 2000 2010 2020
ERP Technology Cycles Are Very Important © 2013 Plex Systems Proprietary + Confidential • ERP systems are 20 year investments but the technology cycles are only 10 years long • Each (successful) new ERP generation sucks the momentum and resources from it’s predecessor • Buying in the middle of a cycle is easy • Buying on the overlap presents both risk and opportunity • We are on the cusp of a new ERP generation • On-premise, SOA-based ERP is at the end of its cycle • Multi-tenant SaaS ERP is rapidly emerging
The Advantages of Cloud ERP © 2013 Plex Systems Proprietary + Confidential Cost Innovation • Lower Deployment Cost • No Capital Required • Variable Operating Cost • Community Development • Continuous Enhancement • No Annual Upgrades Agility Value • Implementation Speed • Scalability • Highly Configurable • User Adoption • Global Access • Improved Security
Cost Advantages of Cloud-based ERP Traditional On-Premise ERP Cost • • • • • • • • • • • • Large capital expenditures: - Hardware - ERP Licenses - Database Licenses - Middleware Licenses Hiring / Training IT Personnel Annual ERP Maintenance Fees (20% - 25%) Annual Infrastructure Maintenance (20%) Implementation Project (2 – 5X License) Offsite Backup & Recovery (25% - 40%) Annual Upgrade Projects Periodic Infrastructure Update/Replacement Mostly fixed costs. Many manufacturers spend 1% of revenue on ERP-related expenses. © 2013 Plex Systems Proprietary + Confidential Cloud-based ERP Cost • • • • • • • • • No capital expenditures! - No new hardware - No software licenses Allows existing IT staff to work on other projects No maintenance fees! Faster & less expensive implementation Comprehensive Backup & Recovery is included No upgrade projects! No obsolete infrastructure! Finally true variable cost ERP. Most Plex customers spend less than ½% of revenue on ERP-related expenses.
Implementation Advantages of Cloud-based ERP Traditional On-Premise ERP Implementation • • • • • • • • • • • • Initial project to acquire, configure, and test the infrastructure environment IT staff training ERP installation, testing, and tuning Software fit/gap analysis (blueprinting) Business process re-engineering Software customization Partner product integration development ERP configuration Test script development Employee education and training Integration testing First phase go-live Typical implementation costs are 2 – 5 times the ERP license fees and are rarely completed in less than 12 months. © 2013 Plex Systems Proprietary + Confidential SaaS-based ERP Implementation • • • • • • • • No infrastructure required! Configure the application Start loading data Internet-based software is familiar and intuitive No software customization! Flexibility to select modules and sequence Initial go-lives often 4 to 6 weeks Full implementations typically twice as fast (and half the cost) of on-premise ERP Plex implementations are faster, less expensive, and less risky. Additional sites and modules can be added easily and quickly.
Innovation Advantages of Cloud-based ERP Traditional On-Premise ERP Innovation • • • • • • • New software releases every 12 – 18 months Content is controlled by the ERP vendor with limited input from customers Most new functionality is designed to allow the vendor to enter new vertical markets Failure to deploy upgrades will make software unsupportable Releases often require additional investments in new or upgraded infrastructure Existing customization and integration must be re-tested or re-written Most new functionality is packaged as extra cost add-on modules ERP maintenance fees are typically 20+% of initial license cost to often deliver only bug fixes and unwanted functionality. © 2013 Plex Systems Proprietary + Confidential SaaS-based ERP Innovation • • • • • • • • Continuous functionality and technical innovation No “release cycles”! New functionality is available immediately in a test environment Customers simply “opt-in” for new capabilities that they need No upgrade projects! No mandatory maintenance fees! Customers only pay for enhancements that they request All customer-funded enhancements become part of the standard product Product enhancements are driven by the Plex Community and focused exclusively on the needs of manufacturing companies.
Value Advantages of Cloud-based ERP Traditional On-Premise ERP Value • • • • • License model encourages customers to limit the number of users On-premise systems sit behind a corporate firewall that makes access difficult for remote employees or partners Complex, fragile customization and integration discourages innovation Older systems are typically pieced together from multiple acquisitions On-premise ERP results in uncompetitive IT expense levels Traditional ERP systems are evolving too slowly, are too rigid once deployed, and cost too much to buy and own. © 2013 Plex Systems Proprietary + Confidential SaaS-based ERP Value • • • • • • • • • Plex customers have unlimited users (internal and external) Cloud-based ERP can be accessed from anywhere with an internet connection Cloud systems are mobile device ready Plex offers a single integrated suite covering ERP, MES, Quality, Analytics, and Compliance Up-to-date functionality Consumer-grade usability State-of-the-art delivery model Audited, professional physical and data security Continuous off-site backup and disaster recovery A comprehensive manufacturing-focused ERP offering unprecedented speed, flexibility, and value.
BUT… The needs of food processors are so robust and complex that they cannot bet their businesses on immature or incomplete solutions!
Cloud ERP is Now Complete Security Self-Service Tools Program Mgmt 1/9/2014 | Page 13 © 2013 Plex Systems Proprietary + Confidential Management Costing Accounting INSERT MODULES PDF Sales/CRM/Order Fulfillment Engineering Scheduling Purchasing Inventory Shipping/Distribution Production Quality Human Resources Communication Maintenance Tool Tracking Supplier Quality Core Quality Advanced Quality ©2013 PLEX SYSTEMS. PROPRIETARY & CONFIDENTIAL
Plex: By the Numbers 9 10 90% $30 1.7 out of Plex food & beverage customers are up and running in 90 days More likely for a Plex customer to be in a top performance metric category billion Equivalent diversified plant powered by Plex times More ROI as compared to on-premise: innovative IT cost strategy © 2013 Plex Systems Proprietary + Confidential 1/9/2014 | Slide 14
Forward Thinking Customers Leading the Way Single version of the truth: One ERP system to manage entire business Saves 608 hours of processing time per year Plans to deliver 3x volume in 2014 with no new investment in ERP system Tracks 400 different food products with near 100% accuracy © 2013 Plex Systems Proprietary + Confidential 1/9/2014 | Slide 15
Thank You Patrick Fetterman VP Product Marketing Plex Systems firstname.lastname@example.org 248-393-8858
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