Easing Distributors' Fears about Cloud ERP

EASING DISTRIBUTORS’ FEARS ABOUT CLOUD ERP BROUGHT TO YOU BY: A LOOK AT THE BIGGEST CONCERNS REGARDING CLOUD ERP SOFTWARE, AND HOW IT IS GEARED TO TACKLE THEM For decades, business-to-business distributors have been utilizing software to reduce labor costs, manage data, process transactions and more. And as long as there have been advances in business software, there have been fears and resistance to change. Just look at e-commerce. Despite its rapid rise — Forrester Research expects the B2B e-commerce market to hit $1.18 trillion by 2021 with an annual growth rate of 7.4 percent — distributors have lagged behind. Industrial Distribution’s “2017 Survey of Distributor Operations” found that 37 percent of respondents don’t offer e-commerce, even as industrial products’ buyers preferences have undeniably shifted towards a digital purchasing preference over the past decade. Likewise, when workplace essentials distributor Essendant surveyed 114 janitorial/sanitation resellers in the fall of 2017, only 53 percent said they had e-commerce in place. While e-commerce has become a key element of many distributors’ business model, an even more critical element of distributor operations is ERP software. In less than 20 years, ERP evolved from automating internal back-office operations to managing most critical functions of the business. Currently, ERP software is undergoing its biggest evolution yet — the Cloud. Like with most software developments, consumers have seen the benefits of cloud-based offerings for quite some time, while distributors are getting involved more slowly. The reasons for distributors’ reluctance to dive right in are the same associated with e-commerce — uncertainties. Distributors are uncertain about if they can afford the new software; they’re concerned about if it is right for them; they’re uncertain how to get their sales team and management to buy-in; they’re uncertain about when the right time is to get involved; and they’re uncertain about if the software will grow with them. The great news for curious distributors is that there are simple answers to those questions in regards to cloud ERP software, so let’s put those concerns at ease here: Concern No. 1: Can We Afford Cloud ERP Software? With almost any new technology or feature a distributor adds to their operation, the first thing management typically looks to is cost. This is where the difference between cloud and on-premise ERP systems becomes especially apparent. Whereas an on-premise ERP system is installed on a company’s local hardware and its servers managed by in- house staff, a cloud ERP system is a vendor- provided software-as-a-service (SaaS) that is managed by the vendor via the Internet 2 EASING DISTRIBUTORS’ FEARS ABOUT CLOUD ERP in a system the customer accesses through a web browser. From a dollars-and-cents perspective, this means cloud ERP software has a lower operating cost since it eliminates the need for distributors to purchase server, network and security hardware needed to maintain this platform. In its 2015 report, “Benefits Actually Realized From the Cloud,” research firm Mint Jutras found that cloud ERP cost savings were not only realized compared to on-premises, but also exceeded expectations — all the way from costs of start-up, to ownership, to upgrades. Concern No. 2: Is Cloud ERP Software Right For My Company? The simple answer is that if your company has or plans to use an ERP system, it can certainly make use of the Cloud for it. The user doesn’t have to give up anything between on-premises and the Cloud, as cloud-based ERP software has the same ability to take orders, manage accounting and all the other critical features distributors use the software for. Conversely, cloud ERP software allows you to slide more work onto the vendor, giving you added flexibility about managing how much of the heavy lifting you want to do. Just as many distributors outsource certain services such as delivery, repairs or product training, cloud ERP can be viewed as an outsourced part of a distributors’ business. Concern No. 3: How Do I Get Our Sales Team On Board With A Cloud ERP System? While Millennials now comprise more than one-third of the total U.S. workforce, many distribution companies are still dominated by long-tenured sales staff who are used to doing things the same way for a long time, including using an on-premise ERP system. Those salespeople and managers can rest assured that cloud ERP operates the same way as the system they’re used to, just with added flexibility. With on-premise ERP, if a sales rep takes home documents from the office, they might then be the only one in the company with access to them, whereas the Cloud offers open access to employees whenever they need it. Cloud ERP’s mobility advantage extends to the fact that it seamlessly connects across a company’s entire network, whereas an on-premise platform is often limited to an individual facility. Concern No. 4: How Do We Know If We’re Ready To Switch From On-Premise To Cloud? Another great feature of cloud-based ERP is that it enables distributors to move it at their own pace. It’s not an all-or-nothing switch. Take a look at Epicor, which has been providing leading-edge ERP software to distributors and manufacturers for decades. The company’s Cloud Now, Cloud Next or Cloud Future offerings give users the flexibility to pick how much of their on-premise ERP system they want to transfer to the Cloud at a time. This is especially useful for those long-tenured employees who may be more reluctant to embrace any change in the software they use. In a nutshell, cloud ERP means any distributor with an on-premise system is always ready to begin changing to the Cloud. Concern No. 5: Will Cloud Software ERP Keep Up With My Company’s Growth? Growing distributors have many moving operational pieces, including upgrading their software and servers. This is one of cloud ERP’s best advantages. With the vendor hosting the platform, it can take on those upgrade burdens and give the distributor all the space it needs to grow upon request. IWhen considering 3 EASING DISTRIBUTORS’ FEARS ABOUT CLOUD ERP ” “I think with this technology, we can grow in the future because it helps us to teach the new employees. We were with the old system for 40 some years. We were comfortable. We were in a rut. To get out of that rut is tough. But now, I just see so many exciting horizons to go into. It’s exciting what we can do, because in the past we couldn’t do any of it. This will bring our up to speed quicker. As we add new branches we can focus on getting them up to speed. There’s just so much information there, it’s unbelievable. We haven’t touched hardly any of it yet as to what we’re going to get into. — Monatto Smith, VP Sales at Transply, an Epicor customer the threat of Amazon, a relentless high rate of merger & acquisition activity and shifting customer buying habits, distributors face plenty of business disruption. Cloud ERP helps manage that disruption with flexibility in adjusting to customers’ changing needs. Maybe there’s a useful ERP module a distributor needs to add they’ve never used before. With it being in the Cloud, it can be added much faster than with an on-premise system. The same goes for changes in foreign currency or language packages — they can be updated instantly. And as previously mentioned, cloud ERP software’s ability to connect across a distributor’s entire branch network makes managing organic or bolt-on growth easier. Choosing The Right Partner Knowing how cloud ERP successfully addresses each of these fears is refreshing in its own light. But there’s still one more concern distributors will likely have once they move forward and decide to pursue it — how do they find the right cloud ERP software provider? Distributors today have many options when it comes to ERP software providers. But while many of them focus only on cloud ERP solutions, Epicor also has decades of expertise providing on-premises solutions. The company has nearly 50 years of experience providing business software and has seen the evolutions of various markets. It has more than 20,000 customers in 150 countries around the world, so it also has the bandwidth to give distributors exactly what they need. And Epicor lives its “Grow Business, Not Software” slogan, aiming to be a true partner for distributors to grow instead of just giving them bigger and better software. The Epicor Prophet 21 software is widely used across the distribution market, and its cloud version continues to be increasingly utilized by distributors looking to become more agile — whether that’s with customer-facing operations, back-end functions, empowering sales staff, easing the employee onboarding process or all the above. In a nutshell, Epicor makes it easy for distributors to stay current on technology, move to the Cloud, leverage solutions that fit their industry and empower them to drive digital transformation and growth. 4 EASING DISTRIBUTORS’ FEARS ABOUT CLOUD ERP ABOUT EPICOR Epicor Software Corporation (www.epicor.com) provides industry-specific business software designed to fit our customers and how they work. Epicor’s nearly 50 years of experience with its customers’ unique business processes and operational requirements is built into every solution so that distribution businesses can scale, adapt and grow without costly system modifications — in the cloud or on-premises. ABOUT THIS REPORT The information in this report was researched and produced by Industrial Distribution in conjunction with Epicor. Statistical data was researched and compiled by Advantage Business Media in March 2018. ” “Epicor has the software, resources, and support to be a great partner. The key is to use what they have to offer—make the Prophet 21 system a strategic component of your operation. We have grown every year since implementing Prophet 21. A key element of growth is maintaining profitability. The system is an integral part of maintaining our margins in spite of outside cost pressures. — James Davis, President at Industrial Specialties Manufacturing, an Epicor customer