Why Manufacturers Are Switching To Cloud Computing

Improved Business Performance, Better Security & More. For years now, many manufacturing companies have used Enterprise Resource Planning (ERP) systems to manage their finance and shop floor information.While these systems have been popular, a new ERP system is now entering plants around the nation, and that's cloud ERP systems.These have proven to provide deep functionality and flexibility at a much lower cost than traditional on-premise systems.   Cloud solutions also offer cross-functional visibility and consistent data across functions, faster low- or no-cost upgrades, lower operational costs, and guarantee security of critical customer and internal data.“The majority of our work is now setting up cloud ERP systems for clients, which is really the way to go, and particularly in manufacturing,” said Stuart Nottingham, Director of Technical Services of Management Applications Inc., of Raleigh, N.C., which has been providing businesses in all industries with ERP solutions and other consultative network services for more than 20 years.  “Cloud ERP software such as Acumatica, which provides an ideal SaaS scenario for most, are changing the way manufacturers run their operations.”Why Cloud ERP?As a manufacturer, you likely use an ERP or other software to manage the customer, production, and financial information to run your business.  Unfortunately, you may lack insights and miss efficiencies due to the limitations of your existing software system.These software systems are intended to improve the efficiency and sustainability of the business process.  Regrettably, what often occurs is the software and supporting technology infrastructure itself becomes the focus, rather than a tool to enhance business processes and customer experience.  In other words, your employees work for the system, instead of the system working for your employees and your company.Rather than providing information to help identify ways to cut costs and become more agile, running and maintaining your ERP software can add costs and impede the business.And costs can keep coming.  Speaking ballpark, add another 15 to 22 percent on top of the purchase price for annual maintenance paid to software and hardware vendors – and this for a system that combined with the historical statistics of traditional on-premise software system implementations – deliver value to the business only 25 percent of the time!Advantages Of Cloud/SaaS Solutions Cloud-based or SaaS solutions are delivered by the provider via the Internet and counter many of these issues.  Cloud solutions leverage technology to bring agility and speed to the business, rather than maintaining the technology.  Significantly lower costs are an additional benefit.Top prospects to consider then examining your needs, according to Nottingham:1 – Functionality and flexibility that meet the needs of your businessn  For most manufacturers, the last major ERP upgrade occurred years ago.  Many use manual work-arounds to help retrieve needed information when the insights are not provided by their existing software systems.  Cloud solutions, due to their flexible platforms and customer-focused product development approach, offer robust functionality out of the box, often eliminating side spreadsheets which are found in nearly all organizations today.  In addition, Cloud architecture enables rapid development.n  Some vendors have made their development tools available through Platform as a Service (PaaS), creating partner ecosystems of add-on applications.  These development partners create industry or functional extensions of the software in the native development technology to meet needs not delivered out of the box.2 – Cross-functional visibility and consistent data across functionsn  Cloud solutions provide integrated data across all functions of an organization, which is a top concern of executives when asked about their company’s use of internal information.  As a result, this reduces the instances when an order date is changed by the sales team but not communicated to production.  Likewise, no longer will two team members attend a meeting with two versions of the same report because they were using different data.3 – Faster and nearly no-cost upgrades to new functionalityn  System upgrades with an on-premise system often take several months to complete due to the testing and re-building required for customizations made in the initial implementation.  This type of upgrade timeline and effort is not required when using Cloud solutions.  Due to multi-tenant architecture, upgrades happen seamlessly behind the scenes and customizations are carried through in the new release.4 – Lower software purchase and operational costsn  Traditional on-premise systems charge an up-front license cost plus on-going maintenance fees between 15 and 22 percent of the license cost.  They also require highly-paid specialized IT resources and expensive upgrades.  Cloud vendors charge a monthly, all-inclusive subscription fee.  The result?  Over 5-7 years, we often see organizations save 25 to 50 percent compared to on-premise solutions.  Hidden costs and opportunity costs are also eliminated.5 – Improved ease of use and higher user adoptionn  Cloud software screens are typically intuitive, based on consumer-based web browser experiences.  This means the system is naturally familiar and easy for users to navigate.  Increased usability and user adoption translates into accurate and complete information efficiently being entered into the system, resulting in improved decision-making.6 – Critical customer and internal data is securen  Cloud vendors take the burden of data security and backup off of your company and let you focus on your core competency.  Using advanced server authentication and data encryption technology, users access Cloud solutions with more security and safety than most manufacturers can provide themselves.  The vendor runs the software on their servers, in their data centers, with their disaster recovery procedures.  Backups and the necessary data center infrastructure are no longer necessary for your company to build and manage.According to Nottingham, perform a diligent analysis of your current system, considering all direct and indirect costs associated as it compares to productivity and efficiency.  Analyze the direct and indirect costs of your existing systems.  Identify the existing maintenance costs for your software licenses as well as the cost for the staff to support your existing systems.  Consider the cost associated with manual processes and workarounds.  Indirect costs include lower customer satisfaction due to delays in timely responses to customer requests, lost production time due to a lack of integrated data across functions, and lack of insights into efficiencies or opportunities to grow with existing customers.Then speak with a specialist that knows Cloud technology.  These external organizations can help review your initial assessment and identify the potential opportunities.  “But make sure you're working with an outside source that knows not just Cloud solutions, but the potential process improvement opportunities when implementing the new solution,” stressed Nottingham.  “The two go hand in hand.”

How Much Longer Will Low-Price Contracting Be In Vogue?

This Type Of Procurement Strategy Presents Long-Term Challenges

Utter the phrase “low-price contracting” these days to any government contractor, and you're bound to get a painful response.

Yes, the economy needs to improve – while budgets and tax revenues also need to stabilize – in order for this to become less of a liability in the bidding marketplace.  But the fact of the matter is that low-price contracting is going to be around “for at least another 2-3 years,” predicted Stuart Nottingham, Director of Technical Services of Management Applications Inc., of Raleigh, N.C., which has been providing government agencies and companies in all industries with accounting software, ERP solutions and other consultative network and business services for more than 20 years.

Why?

“It's the nature of the beast, but low-price contracting can potentially lead to failed projects, which heightens the awareness of the pricing, even if read between the lines,” added Nottingham.  “It's no secret that as price is pushed downward, performance risk goes up.  Eventually this is going to come full circle and likely be viewed as a detriment.”

Yes, many government executives are embracing low-price contracting, and in fact view it as an opportunity to bring low-cost, innovative solutions to the government.  This procurement strategy shift for technical and professional services bids is using lowest price, technically acceptable (LPTA) evaluation criteria rather than the more traditional best-value tradeoff criteria.

Now while there is always rooms for low-price strategy in federal procurements, it 's really not suitable for procurements with complex services or uncertain performance risk.   When a government agency applies such a strategy to unsuitable procurements, both the government and the bidders lose.

Here's some actions to keep in mind when presenting with this:

The LPTA Evaluation Criteria – When Is It Best To Use?

This is really a best value.  In traditional best value procurements, the government allows tradeoffs among non-cost factors such as technical approach, management plan, past performance, etc. and cost when determining best value to the government.  These tradeoffs give the government the latitude to award a contract to other than the lowest priced offeror when the tradeoffs show there is additional value to the government in these factors.

When selecting the LPTA criteria for procurements, the government determines before the release of the request for proposals (RFP) that there is no additional value in trading off the non-cost factors versus cost.  Also, LPTA evaluations specifically prohibit evaluators from making these tradeoffs and restrict evaluators to only scoring proposal factors and subfactors as either acceptable or unacceptable.

The end result?  There's simply no value in the bidder exceeding any requirement in the RFP.

Establishing Minimum Technical & Performance Requirements

Procurements run into trouble when LPTA criteria is applied to technical and professional services bids because the work is complex, minimum acceptable technical and performance requirements are difficult to describe, and the consequences from failure can be considerable.

In LPTA procurements, setting higher standards for acceptability becomes important because each bidder who meets the minimum acceptable standards has an equal opportunity to be selected for contract award.  If standards are too low, every bidder will get through the acceptable hurdle, leaving only cost as the evaluation factor.

A Higher Standard Of Acceptability

To raise standards of acceptability, for example, an RFP might prescribe that the bidder have CMMI or ISO certifications or require proposed key or technical staff to have specific undergraduate degrees, advanced degrees, and/or professional certifications.  Past performance might require evidence of several completed contracts of a minimum size or completed within the past 12 months.  If the bidder doesn’t meet these requirements, they must be evaluated as unacceptable.

As a result, each higher requirement raises the bar of acceptability, but because the evaluation is LPTA, the government can't give additional consideration to companies exceeding a requirement by considerable margin over those who barely meet the requirements

The Win Goes To The Lowest Price

When an offeror’s proposal has been found acceptable, all that stands between the offeror and victory is having the lowest evaluated price.

Bidders use many tactics to lower their evaluated price. With the application of these tactics, each bidder takes on more risk in contract performance. Generally, as price is pushed downward, performance risk goes up, and the satisfaction of having awarded to the lowest price offeror can soon be overshadowed by the burden of poor contractor performance. 

“All parties lose when all is said and done,” noted Nottingham.  “The best approach is to educate procurement officials, and particularly about using LPTA as a strategy.”

Utilizing The Cloud To Increase Your Business Value

A Hot Topic Of Late, And Rightly So For It's Compelling Benefits

Cloud computing is a hot topic of late, with many IT professionals certainly all ears when learning the benefits that are inviting for all types of operations and business.

And utilizing the cloud is not just a trend – it's very much a business practice that has helped organizations to both develop and grow.

“Cloud computing has radically simplified business computing over the last 3-5 years, and it's just the tip of the iceberg,” said Stuart Nottingham, Director of Technical Services for Management Applications Inc., of Raleigh, N.C., which has been providing companies in all industries with accounting software, ERP solutions and other consultative network and business services for more than 20 years.  “Our customers are always quite pleased at the ease of use when implementing any application, including accounting software.”

In short, cloud computing can:

·         Drastically increase flexibility.

·         Provide more deployment options.

·         Significantly reduce costs.

And that's just for starters.

A closer look at some of the many improvements over the past 3-5 years that Nottingham mentions above are:

• It's A Hot Topic – Nottingham notes that many organizations were looking to move systems for accounting, HR, sales and otherwise to a third party provider in attempt to reduce equipment, storage and cost issues, so were in a sense moving to the cloud already “before it was called the cloud,” according to Nottingham.  So as this is occurring more, it's more top of mind for IT professionals, which obviously spurs interest in further improvement the cloud.

• More Options – Before cloud options, in-house storage included hardware with applications on top, which comes with it the usual maintenance and upkeep issues, not to mention costs.  Now with the cloud, “more options are available on both how applications are deployed, but also how they're consumed,” noted Nottingham.

• Flexibility – The cloud adds another deployment option for companies.  Many companies opt for a combination of local vs. cloud, but a trend toward more cloud is obviously happening.

• Speed – “Everything's brought to market quicker with the cloud,” said Nottingham.  With a couple clicks of the mouse, an application can be deployed on the cloud.  And with the cloud, “everything also feels faster, because it is,” added Nottingham.

• Cost Reduction – Nottingham notes a recent study which tracked IT spending of companies who went to the cloud four years ago.  Operating costs were reduced in every case.

And perhaps above all, the cloud has simply eased the IT operating burden and it's associated headaches with automating functions even more.  Nottingham points to one client whose IT team was able to focus on key internal issues, such as improved security, once it deployed the majority of its applications to the cloud.

But there's more!  Running low on storage on the cloud?  Simply add availability from another consumption model. 

Expanding globally?  Previously this involved travel to those locations, physical setup, and hoping it worked.  Now with the cloud, in-house data centers are eliminated (or streamlined) in virtually any corner of the world.

So that's a thumbnail look at the power of the cloud.  If you're not utilizing this yet, look into it today.  “There's really no downside,” recommended Nottingham.

How To Determine Your Media Budget

Overwhelming?  Perhaps.  Absolutely Necessary?  Yes!

The question of how much money to spend on media & marketing is one that is very subjective and always dependent on a number of factors relevant to a particular business and its specific needs and goals. 

Easier said than done, in fact. 

“Determining a media budget is one of the toughest concepts many of our clients try to tackle,” said Stuart Nottingham, Director of Technical Services of Management Applications Inc., of Raleigh, N.C., which has been providing companies in all industries with ERP solutions and other consultative network and business services for more than 20 years.  “Some marketing initiatives just require your time, like networking and asking for referrals, while many require a financial investment.  It's a recipe that mixes differently according to your resources and needs.”

Nottingham notes that from online marketing and print ads, to direct mail and broadcast media (radio/television spots), it's an obvious fact that you have to spend money to make money. 

Thus, it's best to first determine a general budget range to start with.  While many clients are quick to ask “how much” they should spend, Nottingham notes beginning with a range saves time in eliminating media options that don’t make sense.  Then more time can be spent planning the very best way to allocate the media budget. 

There are two general ways to go about determining your media budget, according to Nottingham 

The first way to figure your media budget is as a percentage of projected annual revenues.  With this, having access to annual national media ratio reports to help determine how much to spend is paramount.

A real-life example is a media budget for a medical practice.  In examining the ratios, the percentage range for most medical practices is 4-13% of projected annual revenue.  And in 2011, physicians who marketed their services primarily through referrals from other physicians tended to spend from 4-5%, while physicians who marketed directly to patients spent between 8-10%, because they spent more on media buys including broadcast, print (newspaper and magazines) and online pay-per-click campaigns. 

A second good way to determine a media budget is to base it on Return On Investment, or ROI.

Generally, it makes sense to figure somewhere between a 3:1 ROI (earn $3 for every $1 spent), and a 10:1 ROI (earn $10 for every $1 spent) from media. 

Larger, more established brands and consumer brands can expect to get a higher return, while smaller, less established brands, B2B service businesses and companies that are re-branding will experience a lower return.  This is a good method to use if you want to gain significant growth over the course of a year. 

For example, if you want to grow your business by $200,000 over the next year,and you are a small, but established company, you could logically figure a 5:1 ROI, so your media budget should be $40,000. 

Nottingham stresses that the sooner you carve out a media budget, the sooner you can start to truly measure and understand the impact of the spend to your bottom line results.

And ALWAYS make sure to review your budget on an annual basis and adjust the numbers as your business grows or your media mix changes.

“Especially during these days of the economic roller coaster we're riding, it's always important to keep your media budget and planning top of mind, and ready to change things as business dictates,” cautions Nottingham.

How The “Fast 50” Can Benefit Even More

Effective ERP Solutions Are Key

Each year, WashingtonTechnology.com, the online authority for government contractors and partners, releases its “Fast 50” rankings, which celebrates the success of small businesses in the government market.

Through a process of nominations and data analysis, such as five years of government contracting revenue to determine a five-year compound annual growth rate, the Fast 50 has become a benchmark for determined growth in the government contractor sector.

This year's list, released in early August, highlights the fastest-growing small businesses  in a tough market, and diversity and resilience are the themes.

With the current budget environment and uncertainty about when projects will get funded, the companies listed are acutely aware of the many challenges, and have planned accordingly with a visionary approach.

And that's a tribute to this type of thinking, according to Stuart Nottingham, Director of Technical Services of Management Applications Inc., of Raleigh, N.C., which has been providing businesses in all industries  – including government contractors and partners – with ERP solutions and other consultative network services for more than 20 years. 

“We've worked with several of these companies,” said Nottingham, “and a common theme is preparing for current conditions, as well as future growth, with the proper ERP mechanics, such as Microsoft Dynamics SL.”

Indeed, Microsoft Dynamics SL has been the “go-to” enterprise resource planning software products for project-driven small- and medium-sized business, as its comprehensive business management solution provides project-, service-, and distribution-driven businesses with project management and project accounting functionality to help organizations effectively manage projects and improve profitability and efficiency.  Functionalities of Microsoft Dynamics SL include finance, project accounting, manufacturing, field services, supply chain management, analytics, and electronic commerce, among other growth-oriented features.”

“This is the first thing that jumped out when I saw this year's Fast 50 list – how so many of these companies are not using this resource, and how they improve even more by doing so,” added Nottingham.

Nottingham noted that they've been working with companies for more than 20 years in implementing Microsoft Dynamics SL (in fact, Management Applications is one of Microsoft's longest-standing certified partners for this ERP product), and how it's made all functions of a business operate more efficiently and profitably.

“It's a wonderful solution, and one that provides so much flexibility for tailoring and growth,” he added.

As for this year's Fast 50 list, 15 companies are making return appearances.  Last year’s top company, SAVA Workforce Solutions, moved just one spot, from No. 1 to No. 2. 

Others making repeat appearances and proving they are more than one-year wonders are Integrity Management Consulting, Innotion Enterprises, FedSys, Soft Tech Consulting, Evoke Research and Consulting, VAE, and MicroTech.

MicroTech, which is also on Washington Technology’s Top 100 list of the largest government contractors, is making its fourth consecutive appearance on the Fast 50.

The No. 1 spot this year goes to newcomer Universal Understanding, whose growth has skyrocketed in the past five years, from $122,698 in 2007 to $102.7 million in 2011.  The company’s compound annual growth rate is a whopping 437.91 percent.

And keep in mind that the Fast 50 isn’t about raw revenue or bulk.  The report notes there are only three companies on the list with more than $100 million in revenue, “but those small businesses have found a way to grow rapidly in a very tough market,” according to the report.

As well, the Fast 50 group represents a well-oiled economic engine, as the total aggregate revenue they earned in 2011 is $1.4 billion.  In 2007, the same companies brought in a total of $65.6 million.  As a group, their compound annual growth rate is 115.32 percent from 2007 to 2011.

But again, despite these successes, Nottingham sees even more growth despite challenging economic conditions and a lack of a Federal budget, and that is the best ERP solutions such as Microsoft Dynamics SL.

“It's really a no brainer,” concluded Nottingham.  “And one by one, companies are starting to see it.”

…more information from “The Cloud”…

Hey, folks, we are back sending you more info on “the Cloud.”

Here is an ERP System that has some real depth and breadth.  It includes Financial, Distribution, CRM and soon-to-be-released Project Series.  The report writers are built in rather than an ‘add-on’ (that may be discontinued in the near future).  I have met with the programmers and they are amazing – really on-top in designing for companies doing business today---the new century, not decades ago.  This is totally customizable and multi-language. 

This software can be deployed in-house, in a datacenter, or in “the Cloud.”  It is your choice.  AND, in the future, an in-house system can be changed to one of the others.  In any case, the data remain under your ownership and is retrievable.  This is a really important point. 

This software can be access from anywhere in the world with any workstation, including a MAC, and on multiple browsers. 

This company is Acumatica.  Acumatica has experienced people running this company and it is well-funded.  I am On Board.  Take a look at our website ..ManApp1.com…and check out the .pdf on Acumatica.

I am in The Cloud again

….just about the time I think I am finished researching The Cloud, some one sends me more data.  So here you go.  Grab some of these articles and check out some of the interesting ideas I have been sent.

I have been in the business world for many, many years and most of the industries have some kinds of Standards.  I have even been a part of those who set those Standards.  In the “olden days” of the PC Network, there were no Standards.  It was pretty much “get your stuff out on the market and who ever sells the most sets the Standards.”

We are in a new era with more and more applications having the ability to run in The Cloud.  So, who now sets the Standards and what will the Standards look like?  I received an interesting article written by Rutrell Yasin entitled “How standards could get cloud out of the 1970s.”  Check out the following URL and read the whole thing.  He feels the standards are either non-existent or based on mainframe technology. 

In the same group of articles is one on security.  Check that one out, too.  The really good  article I read, and am passing on, is one entitled, “At last, a solid definition of what a cloud looks like.”

Most of these articles are written from the point of view of what the Federal Government is trying to do.  But, take a look at the ideas they are trying to implement and whether all of The Cloud providers already clash with each other, what they look like and how can they be standardized world wide. 

http://washingtontechnology.com/articles/2011/07/26/cloud-2-commission-2-roadmap.aspx?s=wtdaily_280711

When you are ready to join accounting in The Cloud, get in touch through http://ManApp1.com