Smarter ERP options on your smart factory journey

2 mins read

Making smart decisions about your IT strategy on the path to greater productivity. By Emmanuelle Hose, Global Vice President, Industry Solutions, Rimini Street.

As a manufacturing leader in the UK, you're under continual pressure to optimise operations, increase productivity, and drive innovation on the road to a smart factory future. According to a recent article in SDX Central, 86% of manufacturing executives believe smart factory solutions will be the primary drivers of competitiveness in the next five years.

As an Industry 4.0 cornerstone, smart factories promise streamlined processes and production, plus benefits to development, logistics, supply chains, and planning, all of which depend on Enterprise Resource Planning (ERP). ERP systems are integral to manufacturing operations and play a mission-critical role in optimising processes, maximising productivity, and enabling informed decision-making.

Over time, successful manufacturers have extensively customised their ERP to meet unique business needs and to work smoothly with other enterprise applications. But while your smart factory destination can only be reached through modernisation and automation, that journey shouldn't require a disruptive detour of discarding your ERP system and its time-tested customisations and integrations.

Cloud migration mandates: RISE or fall behind?

Unfortunately, some ERP vendors seemingly want to pressure their on-premises customers into SaaS migrations to obtain new AI and sustainability features, putting at risk customisations and integrations crucial to operations. For example, SAP is pushing its RISE with SAP programme, a carrot-and-stick migration campaign to entice ECC customers (and those who have already migrated to on-premises S/4HANA) to cloud-based S/4HANA running on SAP-managed hyperscaler infrastructures.

This strategy of pushing customers to subscription-based pricing locks in recurring revenue, and can give the vendor more control over version upgrades. However, it doesn't necessarily make sense for customers who know from experience that "rip and replace" migrations are sometimes large, complex and risky projects that can cost millions of pounds, take longer than expected, and break existing processes along the way.

And there's some irony, especially for manufacturing, where extensive customisations are the rule, not the exception. SAP aims to convince customers to strip their ERPs down to a "clean core" focused on its cloud-complaint standardisation rather than customisation. Most manufacturers, however, are unlikely to be awash in the people and skills needed to undertake such as cleansing, and rewriting, replacing, or retiring each customisation is likely to entail expensive consulting engagements.

Better ways to fund innovation

Automation and modernisation certainly are priorities for UK manufacturers, many of whom are striving for digital transformation, according to Make UK reports. But investment in automation is sparse, with 38% of those surveyed by Make UK citing high costs/lack of budget as barriers to adoption of automation. Allocating significant funds to unneeded ERP migrations and re-platforming only adds to the pain and further deters innovation.

Instead, start with a shift in mindset: ERP systems are absolutely mission critical, but not typically strategic - upgrades and migrations seldom enhance competitive advantage or drive revenue growth. Instead, they tend to be disruptive, risky, and almost always expensive. The good news its there's a better way to modernise manufacturing without a costly, unproven ERP migration.

Thousands of ERP customers and scores of manufacturers worldwide have discovered they can fund their innovation initiatives by shedding costly vendor-provided support and avoid unneeded pressured upgrades and by instead choosing comprehensive third-party support solutions from Rimini Street. Our clients extend the life and extract the greatest value from their existing enterprise software, keeping their core ERP stable while freeing up resources to innovate around the edges leveraging cloud platforms. Getting to the smart factory you envision requires smart decisions at every step along the way, and that starts where you are today.

Learn more: Discover how Rimini Street can help you reallocate resources to innovation, competitive advantage, and accelerated growth.