Andrew Buckley, Sages recently appointed director of Sage Manufacturing Solutions describes why the company has seen fit to launch a new business unit to assist a well-established market sector.
The competitive challenge for UK manufacturers has never been greater. But industry is fighting back. Even the normally pessimistic Engineering Employers Federation recently dismissed gloomy prognoses for manufacturing as wide of the mark by some margin.
Sage is so confident of the industrys future that it has just launched a new manufacturing division. Its brief is to provide even better support for its 80,000 manufacturing customers in the UK and to win the new manufacturing business that is undoubtedly out there.
It is manufacturers vertical markets, not their size, that dictate the business processes they use, and the IT these businesses need to support them must accommodate--not dictate--these processes.
Small and medium sized industrial enterprises are entering a new, more demanding era and they know they need robust technology to underpin their business processes. Many manufacturers have already made core IT purchases of accounting and other systems, and they want to build on that by automating other business processes. Still more have accumulated a number of so-called best-of breed applications, often purchased by different departments without reference to each other. Some of these applications are effective, others less so, but they tend, overall, not to work particularly well with each other. These businesses want a better return from these investments.
Others invested in IT in the Y2K frenzy and now believe their systems are not up to the current challenge. They are inclined to cut their losses and replace all or most of their existing IT infrastructure with the truly integrated tools made possible by the latest generation of computing.
Whichever group they are in, moving away from familiar systems is a traumatic prospect worth contemplating only if they can be sure that what comes after provides a truly integrated alternative. Yet despite intense competition among IT suppliers, mid-size manufacturers find they are not particularly well served. Though huge multinationals can afford the software and implementation cost of a SAP or Oracle enterprise-wide solution, this is not an option for most of the companies in the multinationals supply chain. But where else can they go?
Too few suppliers really understand that manufacturers have specific requirements which separate them not just from non-manufacturing businesses but from manufacturers in different sectors to their own. A chemicals company doesnt operate the same way as a food processing company or one in rubber and plastics, and these are all completely different from a company making garden furniture or washing machines.
It is manufacturers vertical markets, not their size, that dictate the business processes they use, and the IT these businesses need to support them must accommodate--not dictate--these processes.
Whatever their sector, the range and functionality of the applications they need is considerably greater than even five years ago. Globalisation has created extended supply chains with multiple, widely-spaced users dealing in different languages and currencies. Industry needs not just generic back office automation for accounting, payroll or financial forecasting, or front-office systems like customer relationship management (CRM), but industry-specific automation providing warehousing and distribution functionality or scheduling and job-status information on the factory floor. All these applications must integrate with the business intelligence software that mines data from throughout the extended organisation to provide a single view of key performance indicators and makes possible problems instantly visible. Finally, industrial users expect to be able not just to automate and integrate these business processes but to customise their applications to accommodate their own situation. This configuration is a continual process which user companies expect to be able to carry out without having to call on an expensive consultancy resource.
All this means that manufacturers need reliable suppliers with deep knowledge of the issues faced by particular customers in particular sectors and a strong resource that can talk the language of bills of materials, works orders, materials requirements planning and sales- and purchase-order planning.
Manufacturing is already critical to Sage, whose core offering is already well represented in industry. Though in general one in 10 UK businesses is in manufacturing, manufacturers account for 14 per cent of Sages installed base for the entry-level instant accounting package. For the Line 50, Line 100/MMS and top-of-the range Line 500 systems the figures rise to 21 to 34 per cent of Sages installed base.
The new division will build on this commitment by adding to already strong manufacturing functionality. The additions come either from its own internal resources in R&D, technical support or the professional services team, or, to develop mission-critical specialist applications, by acquisition or furthering close partnerships with specialist providers. As part of its Line 500 offering, for example, Sage is already marketing a scheduling solution based on its partnership with Preactor.
Sages manufacturing solutions will be available through the biggest and most professional channel in the market. Through its extended community of resellers and business partners, Sage and its third-party developers can offer small and medium sized manufacturing businesses everything that a tier one ERP vendor could offer--but at a much more palatable price, with faster implementation, and with a greater chance of success.
Andrew Buckley is the director of Sage Manufacturing Solutions. In the UK, Sage has over 80,000 customers within the manufacturing sector, representing 40 per cent of the UK market. Its goal is to help manufacturers automate and integrate their business processes, internally and across their supply chain, helping them run at optimum efficiency and profitability.
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