The cloud has revolutionized the way online retail, B2B services, and commerce are conducted. Many companies decided that adopting the cloud was a smart move, enabling them to cut costs, access data and provide better customer service. Unfortunately, some companies were too slow to react, leaving them far behind their competitors.
Manufacturing has been slow to change so far, but cloud adoption is picking up — and another shakeup is coming. While forward thinking mid-market manufacturers will use the cloud to stretch their budget, improve business intelligence and respond to customer demand, a lot of the more traditional organizations will be left in the dust. However, managed cloud services can help you lead the pack.
Cloud Adoption in Mid-Market Manufacturing is Speeding Up
The business community has seen the cloud as a disruptive technology for years, but the biggest changes are still in the works. A recent Gartner Survey found that only 2% of surveyed CIOs had moved ERP to the cloud, but an additional 45% of respondents planned to do so in five years or less, and a majority would eventually like to make the move. Other studies predict even faster growth; Compass Intelligence shows 40% year-over-year cloud growth among SMB, and predicts 78% adoption by 2020.
Although only 30% of Gartner respondents planned to keep ERP onsite “for the foreseeable future,” the number for mid-market manufacturers was more than twice that (62%). In this climate, managed cloud gives a decisive advantage for manufacturers to get ahead of the curve.
Why Mid-Market Manufacturers Have Been Slow to Move to the Cloud
Lack of Perceived Benefit. In industries such as banking, SaaS, and retail, the benefits of the cloud are obvious. Organizations need to be able to rapidly analyze data, interact dynamically with customers, and respond quickly to changing business conditions — all of which are facilitated by cloud computing. Additionally, cloud adoption has grown so fast that it’s become the norm. The onus is on executives who don’t want to adopt a managed cloud to make their case, not on those who do.
For manufacturers, the advantages of rapid communication and data access are less obvious. They operate on longer timescales, after all, so the speed with which they can process and respond to analytics and customer demand is less crucial than it is for, say, online retailers. Mid-market manufacturers are understandably wary of adopting a new way of doing things. After all, if it isn’t broke, why fix it?
This conservatism is reinforced by the considerable investments most manufacturers have made in building and maintaining on-site systems to run integrated ERP infrastructure. And of course, there isn’t the same level of competitive pressure to move to an enterprise cloud as in other industries.
Security Concerns. With the amount of proprietary information mid-market manufacturers store, many are apprehensive about security in the cloud. The manufacturing industry isn’t subject to the same IT Security and Compliance standards as the financial industry and consequently, their systems tend to be far less secure. As a result, hackers are increasingly targeting them, stealing anything from employee data to cutting edge intellectual property.
In addition, most industrial control systems don’t have good, modern security measures. Instead, they’re designed to be protected by being physically isolated. If hackers have access to them, they can potentially sabotage and cause major damage to machines. Faced with these threats, many mid-market manufacturers mistakenly conclude that they’re safer keeping their core systems out of the cloud — a belief we’ll address below.
Lack of Information. “Cloud computing” encompasses a huge range of services. There are Software as a Service (SaaS) apps like email and cloud storage, Platform as a Service (PaaS) apps like AWS where companies can build their own systems in the cloud, and Infrastructure as a Service (IaaS) solutions for companies that just want virtualization and full-service managed cloud hosting.
On top of that, some vendors tend to overstate their level of hosting, advertising a “managed cloud” while providing little help designing, administrating, optimizing or troubleshooting. Most providers cash in on hype and don’t do a good job of communicating what they offer and how they can meet the needs of mid-market manufacturers — and many of them simply can’t.
Likewise, once enterprise cloud customers decide to host SAP® installations or other ERP software, they have to choose between the public cloud, private cloud, and hybrid cloud, which can seem confusing. Public cloud hosting keeps data in a server farm where computing resources are flexibly allocated, but the degree of data isolation and performance guarantees can vary dramatically.
Likewise, the private cloud — which hosts data and applications on dedicated hardware — can be implemented in radically different ways from vendor to vendor. With all the confusion, many businesses decide to just stick with what they know. Unfortunately, they’re missing out on some powerful benefits.
Why Mid-Market Manufacturers Need to Adopt the Cloud:
Better Security. Mid-market manufacturers could secure themselves by staying out of the cloud, if it weren’t for the fact that they’re probably already in it. Because the cloud is becoming such an integrated part of the workplace, it’s likely that their employees already send emails and access files in the cloud — and their servers are connected to the Internet, which means hackers can attack them just as easily as they can attack cloud applications.
The difference is that on-site legacy servers tend to be much more vulnerable than cloud installations. They generally use out-of-date encryption and DLP — not to mention the potential for unpatched vulnerabilities lurking beneath the surface. They’re easier to hack into, and successful breaches tend to be much more damaging.
Industrial control systems like SCADA and PLC are also endangered by the status quo. They’re inherently vulnerable to malware, meaning that employees could unintentionally compromise them simply by going about their daily business. Once malware installs itself on a computer, it can steal data and spread to industrial control hardware. Even if you don’t connect your ICS to the Internet, using a thumb drive to update hardware or get data logs can be enough to corrupt the system’s hardware, potentially allowing hackers to sabotage equipment on the factory floor.
A managed cloud can protect ERP, ICS, and even basic SaaS applications like email. Just by keeping software up-to-date and implementing good encryption and DLP, a managed cloud partner like Symmetry can neutralize the vast majority of threats.
As security and compliance experts, we can even prevent sophisticated attacks. Symmetry’s cyber security services deploy cutting edge firewalls, anti-malware and intrusion detection software, and are backed up by 24-hour monitoring and threat response.
We can detect and neutralize intrusions while hackers are scanning your hardware, stopping attacks before they’re launched. We’ll be watching your network and server traffic too; even if malware gets in (by an employee using an infected personal device, for example), we’ll be able to catch it before it compromises your data.
More Affordable. While investing in a managed private cloud might cost a little bit extra up front, doing so will likely prevent you from having to waste money on old legacy systems. For mid-market manufacturers, hardware costs generally eat up 30-35% of the budget. Add in the cost of the time it takes internal IT to setup, update, optimize and backup your system — along with the productivity lost when something breaks, forcing your IT staff to drop everything to fix it — and you’ve got a massive capital expenditure.
Symmetry can do it quicker and more affordably. The scale of our cloud platform cuts costs, and our ERP experts can give you better uptime with less labor, slashing your IT labor budget. And because you only have to pay for what you use, you won’t have to pay to keep extra hardware on hand to prepare for future growth.
Better Support. When you choose a managed cloud partner, you’re not just investing in infrastructure and software; you’re also choosing a service model, range of skills, and level of support. Most commodity cloud providers provide very little support with their managed hosting, and they don’t understand more complex applications like ERP. Their clients are responsible for setting up and running their enterprise installations, and fixing things when they break.
Symmetry has a different model; we’re not just a hosting vendor, we’re a partner, functioning as an extension of your internal IT team. Need an IT consultant to help you plan the next stage of growth, or just someone to fill in for an employee on vacation? We’re there. Need SAP certified experts to run your network, so your internal IT can focus on writing code instead of chasing bugs? We’re on it. Need a partner to design your managed cloud infrastructure from scratch, and handle migration and testing? You’ve got it!
We offer 24-hour support, using long-term, U.S. based employees who know your system. That means we’re there when something goes wrong in the middle of the night. It’s no wonder we have a 94% customer satisfaction rate with our support team’s technical knowledge, a 93% satisfaction with incident response, and the highest SAP Basis satisfaction in the industry. Because we put you first.
We also over-invest in the hardware that runs our managed cloud, providing better reliability than you can get with on-site servers. We partner with both IBM and HP, using the most dependable hardware available. Unlike commodity cloud vendors, we monitor our network closely so that we can prevent dangerous hardware faults from causing downtime and data loss. If we have to swap out your server, it won’t even slow you down.
Better Analysis. Cloud computing can vastly improve the ability of
mid-market manufacturers to collect, analyze, and respond to Business Intelligence (BI). With on premise systems, each division needs to gather and analyze their own data before they send a report up the chain. It’s slow, and it tends to obscure the most important trends — the ones that impact the company as a whole.
Cloud ERP enables mid-market manufacturers to connect divisions, subsidiaries and partners into a global network, giving management near-instantaneous access to BI across the company. Symmetry can help you build and run a managed cloud that gets the most out of your data. You’ll be able to analyze key factors like demand, quality control, and price fluctuations on a global scale. That means better quality, higher profit margins and a heightened ability to respond to a changing market.
Better Supply Chain Management. The combination of data access and connectivity can simplify logistics, increasing profits and reliability. Managed cloud supply chain management gives you real-time access to data on warehouse and transportation costs, inventory, equipment, utilization, and more. Rather than using several different TMS and WMS systems, you can use one system to run your entire supply chain.
It’s hard to overstate the benefits for mid-market manufacturers. It lets you optimize utilization, eliminate redundant equipment, and cut transport and warehousing costs. It also gives you more control over merge-in-transit, ensuring you have the right components together when you need them. That means more efficient utilization of employee time and fewer delays.
With a better ability to anticipate demand, it’s easier to stock inventory where it’s needed with less risk of over-producing. You’ll also be able to anticipate transportation, storage and material needs for your organization as a whole instead of leaving it in the hands of each division. That puts you in the position to negotiate better deals with fewer partners, saving money on scale.
Buyer’s Guide: What Symmetry Can Do for Your Business
The managed cloud isn’t one-size-fits-all. Your enterprise cloud needs to be designed around your goals and infrastructure needs, hardware and software assets, and competencies. Symmetry works closely with our partners to plan cloud IT solutions to maximize benefits and minimize disruptions. Here are a few of the IT managed services we offer manufacturers:
1. Managed Private Cloud
Your online ERP software and critical business applications need to meet the highest standards of security and reliability. With a managed private cloud, we can host your core applications on dedicated hardware and take over all software maintenance tasks. We’ll take care of updates, patches, and performance tweaking, leaving you free to focus on business. Likewise, we’ll keep IT security tight, minimizing compliance and data loss risks.
2. Hybrid Cloud
The reality is, many mid-market manufacturers can’t afford to immediately move everything in the cloud. Additionally, for certain tasks, it may make sense to retain some hardware on site. With a hybrid cloud, we’ll be able to connect your local servers to the cloud, complementing them with cutting-edge hardware and software in our data centers. We can boost the security and performance of your legacy systems, give you powerful new tools, and help you move to a managed cloud that meets your budget and needs.
3. Cloud Disaster Recovery
Although an on-site backup can do the trick if your main system fails, a major disaster like a fire or flood will destroy your backup along with your servers. Backing up your assets in the cloud ensures they’ll be there, no matter what happens.
Our cloud disaster recovery team can back up your core systems and information in our secure data centers. Instead of having to make a major investment in backup hardware, you’ll pay a low monthly fee, covering only what you use. In the event of a disaster, we can help you scale up quickly, allocating whatever resources you need to get your business up and running again. We’ll design a system to meet your needs, from basic backup and testing, to a hot site with real-time mirroring.
The managed cloud is a strategic asset, and it needs to be planned with the same amount of care as other parts of your business. We offer a full range of consulting, project management, and Managed IT Servicessolutions to help you get the most out of your hardware and software.
We’re available to assess and tune your system to increase performance and connectivity, or completely overhaul your IT infrastructure. We can plan and execute complete migrations, or create a multi-stage plan to upgrade as you grow. Whether you’re planning a major change or just need a little advice, we’re here to help.
Stay on the Cutting Edge with a Managed Cloud
Cloud computing is going to change mid-market manufacturing forever. Companies which can use the technology to cut costs and increase flexibility and responsiveness will gain a decisive advantage over late-adopters. Symmetry’s managed cloud services can cut the learning curve, helping you transition to a better way of doing business before your competition can. Manufacturing has always been driven by innovation; we’ll help you keep your edge.