If several ERP systems are used simultaneously in the company, this is the software version of the saying: "Too many cooks spoil the broth." Nevertheless, this is the reality in many companies. Because as soon as the data sets differ, all business areas suffer: From accounting and sales to procurement and logistics through to management, which is supposed to make decisions based on supposedly consistent data. The solution to the puzzle in this case is a secure cloud solution, such as the Secure Automotive Cloud. In this article, TCI partner Bernd Ettelbrück summarizes the biggest challenges that existing ERP systems all too quickly bring with them - and presents a solution approach with impressive advantages.
The dilemma with existing ERP systems
You have spent a lot of time and money adapting the functionalities, reports and statistics of your ERP system to your company-specific requirements over the years. The maintenance costs increase from year to year and your ERP system is no longer the leading system, but part of a network of systems for your product data, logistics, customer and service management. Most systems manage their own databases. Consolidating and improving this now costs a lot of money and will take a long time. You don't have the time, nor do you want to spend the money on it because it could be missing elsewhere.
If you recognize yourself in these points, we can tell you from experience that you are not alone. Generally speaking, the challenges that our customers face can be categorized into five areas:
1. data input
Manual and multiple data entries are time-consuming and error-prone. The data has to be maintained in several independent systems and there are several "leading" systems that claim to have the correct data. Just think of your accounting software printing the correct invoices while the sales department sends offers to new contacts in other locations for the same existing customer.
2. data management
The data is stored in several systems; the key account manager naturally has the latest customer data on his computer. A data center only stores important central data and, of course, data that does not need to be constantly accessible. A data backup concept only exists for some departments or systems, not for the entire company.
3. decision
Leads need to be collected, sales need to be controlled, loading lists need to be managed: there are lists everywhere in the company and they contain the data that is needed for precisely this function. And then the company management asks for data and a list with the aim of developing a better business logic. Naturally, the management receives a special list for this, hand-crafted from extracts of other lists, because time is short and no completely new research is started. Ultimately, nobody knows for sure whether the data is really comparable. And the figures from budget control and marketing success measurement are ultimately not exactly comparable; in the end, the management decides intuitively.
4. release change
Software providers no longer continue to develop installed products and new releases are offered. Due to the individualization of the software, new releases and product changes are often not affordable, new technologies cannot be used and the interaction with other systems is at risk. The ERP system is part of a system network consisting of product databases, logistics systems, warehouse information data and production computers. It is no longer the only or even the leading system.
5. maintenance costs
Over time, companies invest in several cloud solutions. Protected data, for example for development or component breakdowns, is selected for private cloud solutions, while some useful applications are only available as cloud applications. This creates a heterogeneous cloud landscape alongside some on-premise solutions. All solutions need to be maintained. That is expensive.
The solution is a secure cloud solution
All these issues are signs of uncontrolled growth, which experience has shown can happen all too easily. To resolve this ERP system dilemma the introduction a secure cloud solution. In this respect, the Secure Automotive Cloud is the contemporary answer with four important features:
1. flexibility
A cloud solution is flexible. Data is stored centrally and is easy to extract. Bottlenecks hardly ever occur. Central monitoring adapts capacities to data volumes and process requirements.
2. focus
Cloud solutions are tailored to industries; 80 to 95 percent of standard industry processes are covered by cloud solutions, depending on the manufacturer. OEMs are increasingly switching to the cloud.
3. economic efficiency
Standard processes with open application interfaces work with standardized and cost-effective workflows and offer cost-cutting potential. Complex adaptations due to individualized processes are eliminated, as are high initial investments.
Compared to on-premise solutions, the cloud offers a higher ROI and turns constant fixed costs into flexible variable costs.
With on-premise solutions, the monthly license costs account for nine percent of the total costs. The running costs are not so obvious, but they are very high. Almost half of the monthly costs are attributable to customizations and their implementation. Expensive hardware has to be purchased and maintained - that's another 33 percent of the running costs. Employees must trained and educated This is working time that has to be paid for. Finally, maintenance costs account for a further seven percent, which rise continuously with the age of the system.
This is also different with cloud solutions: the monthly usage fee accounts for two thirds of the costs. The third third is for the training and implementation of the system.
4. timeliness and security
Central updates and constant new releases keep the software up to date. Cloud solutions also offer mobile applications, which is not possible with most on-premise solutions. Cloud solutions are also secure against outages and attacks thanks to high standards and professional service.
Furthermore, the following applies to the individual division
- he can put the system into operation more quickly
- receives updates more easily
- ties up less capital.
To summarize: Standard industrial processes save a good fifth of operating costs.
Secure Automotive Cloud: advantages and examples
A secure automotive cloud is low-maintenance, as there is no need for in-house hardware. The cloud solution is backed up centrally and data is distributed across multiple locations. Data and information security that meets the high requirements of the automotive industry is already guaranteed by a successful VDA assessment (TISAX) of the Amazon Web Services (AWS) cloud infrastructure. AWS and other major providers work with several firewalls and encrypt internal data traffic. This is a higher security standard than most user companies meet with on-premise solutions and express doubts about the security of cloud solutions.
What's more, cloud solutions are more cost-effective and tie up less capital. Multi-tenant-capable or multi-client-capable cloud solutions are flexibly scalable. They grow with requirements and can also shrink if less performance or data volume is needed temporarily. They differ from so-called "lift and shift" solutions, where the server in the company is replaced by a server with a cloud provider is replaced.
Customers use an up-to-date application at all times, as the operator of the cloud solution benefits from regular updates and modernizations that reduce maintenance costs. Cloud solutions are also sustainable. A one-stop concept and open interfaces make it easier to use new technologies, such as blockchain or Industry 4.0.
The Industrial Cloud, for example, can provide an important additional boost. VW and AWS (Amazon Web Services) reach agreement have. The strategic partnership between the two companies networks 122 VW plants and warehouses and is intended to further strengthen production as an important competitive factor. By consolidating software systems and integrating applications for suppliers and warehouses, production at VW factories is set to increase by 33 percent by 2025.
Successes with the Secure Automotive Cloud
Here are some examples that the team of authors has already successfully implemented with secure cloud services:
A TecDAX company has acquired a Global file structure specified and a Document management created. The basic idea was implemented with a cloud architecture. All data is now up-to-date and available worldwide. The sales department has mobile access to product and price data, logisticians can optimize stock levels and product managers know that all product modifications are always up-to-date and accessible to everyone - worldwide.
A multi-stage migration process was carried out for one of the world's largest automobile manufacturers to convert a monolithic enterprise portal service into a Multi-tenant capable, Highly scalable cloud application to convert. This means that real-time monitoring and diagnostics of mobile services and back-end services remain easily expandable and performant as service and user numbers increase.
Please contact us for further information!
The partners: Implementing a secure automotive cloud with the right support
Sulzer is an automotive expert and full IT service provider: owner-managed since 1978 and a long-standing partner of numerous international premium car manufacturers.
TCI Partners are transformation specialists and have been successfully supporting SMEs in the manufacturing sector for many years. As process experts, TCI enables its customers to use cloud services even better and with less effort using standard processes.
Both partner companies successfully combine innovative topics such as Industry 4.0, Smart Factory and Blockchain with ERP systems.
About Bernd Ettelbrück
Bernd Ettelbrück is a partner at TCI and an experienced business head. In the area of product management, he focuses on Industry 4.0, cyber security, ICT value added services, business case and innovation management.
(Cover picture: © Sulzer)
