Cloud-based technology has already transformed everyday lives, as well as businesses. From sharing photographs with friends and family and secure document storage that protects people from losing valuable work, right through to advanced solutions that have the power to revolutionise cross-border manufacturing and supply chains, the cloud has become essential to daily life.
Despite the benefits, many UK manufacturers are still reluctant to embrace cloud technology, particularly in supply chain management. Here, cloud-based solutions can enhance real-time supply chain visibility, facilitate access to information from a single platform, and use big data to improve forecasting and strategic planning, while saving on costs and allowing for upscaling.
What is holding manufacturers back?
A survey by Epicor revealed mixed results for cloud adoption among UK manufacturers. While 47% of respondents are ‘very interested’ in cloud-based enterprise resource planning (ERP) solutions and 54% are ‘very comfortable’ with these innovations, only some are planning cloud migration at scale in the next year. Only 23% plan to migrate ‘all’ business solutions to the cloud, although more than half (55%) plan a cloud migration of ‘most’ solutions.
Mark Hughes, Epicor’s regional vice-president for UK and Ireland, says “perceived disruption to business” is a barrier for businesses considering cloud technology, however 96% of manufacturers say they are confident in the purchase journey.
“Manufacturers want to be sure that their cloud solution will be flexible enough to meet their industry-specific needs and prefer a modular approach, in which they can select capabilities that address their unique business flows,” he says.
Trust in the technology itself is another factor that holds back some businesses from investing in cloud-based digital technology. Abdul Rahim, an IT professional and academic who founded the Software Test Tips blog, urges a security-aware approach to ease fears that company information may be exposed to competitors or even saboteurs.
He says it is about mastering the basics, which many companies still neglect: “It’s crucial that businesses implement strong security measures, continuously updating software and firmware, installing anti-virus protection on all computers used for sensitive tasks in the cloud, such as uploading data, encrypting customer data using secure encryption algorithms, and ensuring employees are properly trained on how to protect their data.”
According to Hughes, manufacturers feel more comfortable about using the cloud and its security once they are armed with the right information, receive help with data backups during the transition process, and have a dedicated migration team that provides demonstrations and trials.
“In fact, the top need for industry decision makers in the UK is information on security,” Hughes says, referring to the Epicor survey. “Testimonials from peers already using cloud solutions also bolster confidence.”
Trust between manufacturers and their ERP partners is another important aspect of trust in the entire process, particularly in the early stages, adds Hughes.
“Manufacturers require transparency from their ERP partner during pre-sale and post-sale including thorough training and onboarding,” Hughes says. “This concierge-style partnership ensures that they feel confident in and realise the full value of their cloud solutions.”
Understanding the cloud migration process
It is important to receive the right technical support and understand that cloud migration is not a quick fix, according to PwC’s Reaching Your Full Cloud Potential report. It cites the cautionary example of a European consumer products manufacturer that underestimated the sheer scale of the data migration aspect of cloud transformation.
“Executives want their IT systems to move at the speed of business – to be flexible, responsive and adaptive as the business changes – but they often wrongly assume the cloud is a quick fix for long-lingering problems with the company’s IT systems and data,” the report warns.
In the case of the European manufacturer, large quantities of customer, distributor, supply chain and employee data were shifted to a cloud vendor before it was discovered that much of the data needed to be cleaned and repurposed before it could be used to support any of the cloud’s use cases. As a result, the company was forced to maintain legacy systems for much longer than planned while a new solution was developed.
A UK success story
But many manufacturers have undertaken a smooth, successful cloud migration, such as Hacel Lighting Ltd, an independent lighting manufacturer based in the north-east of England. The company migrated to the cloud in early 2020.
Chris Neal, the financial controller and company secretary, has been responsible for IT since 2012. His experience, in consultation with long-time software partner Epicor, learned from past migration projects, which can be time-consuming, each taking up to 40 days of consultancy time every two or three years. Customisations had been deliberately removed to make future migrations more efficient, which meant the cloud solution was live within two-and-a-half months.
Reflecting PwC’s reminder that cloud migration is not a quick fix, most of the time was spent planning the upgrade and securing parallel internet connectivity from two suppliers to ensure Hacel always has cloud solution access.
Neal says the benefits of the cloud migration “pay dividends.” Applications are automatically updated, which saves on hiring consultants to support upgrades and investment in hardware, middleware and security software, as well as automatically eliminating most bugs. Staff can customise the cloud interface without affecting future upgrades and the company has reduced lost time while booking production for assembly line workers.
“My users and I aren’t wasting our time filing and tracking responses to software bugs, as compared to our on-premises days,” says Neal.
Reporting on daily operational activities has “come on in leaps and bounds” with data pulled directly into Excel and published to users across operations, or automatically emailed via integration with Outlook. Neal says these processes are “very good for any manufacturing business.”
Rahim highlights the data management benefits of cloud migration that Hacel Lighting enjoys as a way to allow companies “to quickly scale up their operations when new opportunities arise by simply adding additional resources rather than investing in infrastructure upfront.”
Encouraging a cloud-based future
Success stories, such as Hacel, play an important role in encouraging wider cloud adoption. According to Epicor’s survey, 44% of UK manufacturers said customer testimonials would support the decision to implement cloud-based solutions. Other factors that would positively influence cloud investment include money-back guarantees (47%), the support of a dedicated migration team (57%), demonstrations and trials with dedicated teams (66%), help with data backups (54%), and providing training material for users (64%).
Hughes is confident that more UK manufacturers will come on board with cloud migration if the specific benefits are clearly communicated. He says: “Without a doubt, the UK exiting the EU has had an impact on supply chains, coupled with conflict in Europe and increased transportation costs.”
Hughes adds: “The need for manufacturers to have better control and visibility into and of their supply chains has increased ‒ having a digital backbone to collect and provide meaningful data to support intuitive decision making is key. Cloud solutions facilitate this in the most time- and cost-effective ways.”
To ease the combined supply challenges UK manufacturers will continue to face, Hughes adds that cloud solutions “enable employees to automate repeatable tasks and focus on strategic growth initiatives.”
“Automation ensures that manufacturers can integrate data and automate workflows within their ERP and as well as with other applications and databases,” Hughes says. “The ability to access this data anywhere, anytime in the cloud allows manufacturers to make real-time decisions and react quickly to business events.”