Silver lining

Was the time, and not that long ago, when the lure – if there was one for manufacturers – of moving some or all of their computing off-site and into a notional cloud environment was predicated almost exclusively on cost saving, in terms of people and infrastructure. Use a hosted service, went the argument, and both the upfront and ongoing investments in machines and support were effectively someone else's problem, with the balance sheet instead seeing a predictable monthly service charge. Even that depended on the business accepting a fairly standard implementation, particularly where ERP was concerned. And anyone considering the option needed to get their heads around issues, such as system availability and data security. To be fair, other acknowledged strong points have long since also included: ease of geographical expansion, with cloud-based system deployment fairly unbeatable; and specifics, such as web store hosting and DR – disaster recovery, using off-site data centres for application and data mirroring. But while all of these still pertain, advocates of cloud can, with increasing justification, now add several more solid reasons for taking the plunge. Among those would be improved overall system resilience, availability and security (even for ERP systems) as well as ease of system development to meet changing business needs. And we might add, providing a better platform for improving customer services – through mobility, for example, but also by wrapping products with add-ons, such as maintenance. Sounds perverse? Surely keeping your hand firmly on the tiller of your business-critical systems, rather than relinquishing direct responsibility, has got to make more sense than putting your faith in a service delivered and administered by faceless individuals somewhere else on the planet? Well not necessarily – not least because they needn't be faceless. It's all about horses for courses: choosing appropriate cloud models (public or private, shared or dedicated) and providers for the functions required. K3, which has been offering cloud-based ERP for several years and claims customers in a range of industries, makes the point that there is a world of difference between shared services, with a back-end covering several clients, and dedicated metered services running over a shared infrastructure. "We isolate and dedicate platforms to individual clients, because not doing so could cause security issues," explains K3 account manager Neil Homer. While he doesn't deny that's more expensive than using a public cloud solution – even possibly than running in-house ERP – there are clear benefits that flow from professionally managed systems in slick data centres. Homer cites higher availability, proper DR, protection over upgrades and greater flexibility. Also, if you add in the rest of your computing estate – Exchange, desktop, etc – cloud charges start to look very reasonable. For those concerned about internet connectivity, his answer is unequivocal: "As long as you're running a business-grade internet connection with a decent SLA [service level agreement], you're fine." And he points to the fact that even 10 years ago, when running ERP systems on-premise was the only game in town, many manufacturers chose to have their websites hosted, "because they were aware of the risk of running their web presence in-house". For him, and for many others, moving mission-critical systems to the cloud is as natural as toast and marmalade. "Manufactures are wholly reliant on their ERP and associated business systems being available, so this is the way to go. Also, your IT department can then add value to the company, focusing on business challenges, in line with business strategy, instead of keeping the IT infrastructure alive." Thereafter, cloud's benefits are about the relative ease of everything from meeting customers' changing supply chain and compliance requirements (through cloud-based provisioning) to replacing local legacy and/or standalone applications with centralised, integrated systems, via a cloud deployment. In times of austerity, they're also about getting over the hurdle of system migration, when management recognises that IT is in the way of essential business improvement. As Martin Perry, managed services managing director at K3, puts it: "A lot of companies now prefer opex to capex. So we can take their applications, upgrade them, put them on our hardware and then farm them back with an SLA attached." Given the sheer number of companies now launching cloud services for serious manufacturing and engineering IT, it seems he's right. Among the most recent are Autodesk, Balloon One, In2Grate Business Solutions, Infor, KeyedIn Solutions and Kronos. KeyedIn, for example, chose the recent Subcon show to launch KeyedIn Manufacturing, its enterprise application developed for SMEs "looking for low-cost implementation, quick availability and a system that integrates with their existing financial software, rather than replacing it". Roy Shooter, KeyedIn vice president of sales in Europe, says it's the result of looking closely at the needs of UK manufacturing. "The result is a 100% cloud-based, SaaS [software-as-a-service] product that provides on-demand visibility of all processes, with a powerful estimating and quoting tool," he states. He confirms that there is no on-premise installation and cost is per user, per month – which also frees up manufacturers to license as many users as makes sense, without incurring high costs. Shooter suggests that a company would typically access estimating, purchasing, inventory, production and warehouse functionality, as well as its reporting suite. In2Grate's cloud-based managed service for ERP (also launched at Subcon) is similar, with what Dave Renshaw, CEO of parent company Anisa Group, calls a "touch the cloud" approach. Why? Because it's hosted at the firm's own ISO 27001 accredited UK data centres, he says, so users know exactly where their system and data reside. Indeed, just like K3, each client has its own instance of the system, which means they enjoy all the cost and resilience benefits of scalable, robust shared resources, without being impacted by the needs of other users. Infor has gone even further, by signing a deal with IBM, such that its business-critical applications can now run through IBM's public, private and hybrid SmartCloud services. That means 24-hour customer service, security and high availability, and the software involved includes Infor's CRM, ERP, financial management, HR and business intelligence, in the form of Infor LN, M3, Infor Lawson and Infor HCM – whether on Windows, Linux, AIX or IBM System i and z. "This is a tremendous opportunity for Infor clients to extend the value of their enterprise apps on IBM's cloud, with its built-in resiliency and redundancy to protect mission-critical operations," comments Ali Shadman, senior vice president of business cloud and upgrades at Infor. "We think it's especially well-suited for clients who are looking for more enterprise-class cloud support and assurance." Who said cloud computing was airy fairy? Power of cloud For proof of the benefits of cloud computing, look no further than a recent survey of 1,300 UK and US companies across industries, conducted by cloud-based services firm Rackspace Hosting and the Manchester Business School. They found manufacturers agreeing that cloud has helped them in everything from increasing profits to reducing the cost of IT, improving disaster recovery and increasing business agility. Indeed, 57% said cloud helped them increase profits, with one third citing improvements from 1-10% but just over half (52%) stating that profits had increased from 10-50% since their move to a cloud environment. Even more impressive, 66% said that they had reduced their direct IT costs, with nearly two thirds claiming savings in the 10-50% range. Also, more than half (57%) said the cloud had improved not only the robustness of their disaster recovery but also their ability to make the most of business opportunities – with 45% confirming that cloud was helping them punch above their weight. As for why, reasons cited range from employees being able to access information anytime, anywhere, to more time for IT teams to work on strategy and innovation. Incidentally, nearly three quarters of respondents (70%) stated that enabling remote working reduced office spend by an average of £237,000 a year.