Erp Logic

Why Manufacturers Are Flocking to SaaS solutions

Midsize manufacturing companies are finding value in several of the features of software-as-a-service such as end-to-end business processes and configurable business models. This article looks at how software-as-a-service  solutions puts advanced functionality into the hands of business users without requiring midsize companies to build out large IT operations.

Midsize manufacturing companies are flocking to software-as-a-service as an ERP solution. These companies hail from many different industry niches and wield a wide variety of business models. In fact, the most common similarity among these customers is that they own their customer relationships and brand designs.

These midsize manufacturers are finding value in several features of Software-as-a-service (SaaS):

  • Management in the cloud by the Vendor, so customers don’t need specialized IT talent
  • Integrated processes: End-to-end business processes across the entire value chain; from sales, to logistics, to finance, to human resources
  • Configurable business models: Flexible and sophisticated setup of supply chain management and production capabilities

Enterprise-Class Functionality for Midsize Manufacturers

Midsize manufacturing companies may have sophisticated business models that bring complex products to their customers, but powerful on-premise ERP systems have traditionally been out of their reach. SaaS offerings can turn that around, putting advanced functionality into the hands of business users without requiring midsize companies to build out large IT operations. This allows midsize manufacturers to run quality business operations based on industry best practices, enabling them to maximize margins just like their large enterprise cousins, while using their nimbler size to a competitive advantage. The typical midsize manufacturing company has between 100 and 1,000 employees, 50 or more users, and US$10 to US$250 million in annual revenue.

Accessing your ERP system through SaaS provides several benefits. Delivery is highly simplified and standardized, allowing your company to get started as fast as it can be ready. Also, because it’s in the cloud, functionality can be accessed from different locations and devices, allowing you to easily support a field sales force, satellite plants, and even contract users located anywhere in the world. In addition, the software is managed in secure tier III and IV data centers, providing a much higher level of security and availability than many midsize companies could achieve if they managed the server infrastructure on their own.

The Power of One Integrated System

Some SaaS solutions provide a system that links the inventory, demand forecasting, sales, fulfillment, and financials into a single view. This way, the sales team can know what inventory is available before they make promises for delivery, managers can see what product lines are selling, planners can send accurate demand forecasts to outsourced suppliers, and executives can have an accurate picture of the entire business and its cash flow.

Manage Your Supply Chain the Way You Want

Some companies choose to take a much more hands-on approach with their supply chain operations.

The integrated supply chain management, supplier relationship management, and financials processes provided by some SaaS solutions help to run an adaptive outsourced, yet tightly managed, supply chain strategy. This adaptive supply chain offers another advantage: When the company wants to create a new line of products, it can easily configure its sources and contract warehouses and factories to optimally begin production and distribution.

Run to the Cloud

On of the more advanced solutions for a Saas model is provided by SAP with SAP Business ByDesign with which midsize manufacturers are benefitting from the advantages that cloud technology offers, such as the ability to access enterprise-class ERP functionality. What’s more, they can enjoy integrated business processes made possible through a single system, and configure their business models to better orchestrate their supply chains.