An enabler of digital transformation
Himanshu Palsule, Chief Product and Technology Officer at Epicor, a global provider of industry-specific enterprise software discusses Epicor’s focus in enabling digital transformation
Is digital transformation mandatory for Businesses today? What are the driving factors?
Digital transformation is no longer a future trend; it is here today. It is the confluence of many factors that enables it, such as the availability of the cloud, the mobility of data, the ability to visualize data through better intelligence and the ability of very affordable devices that can be inter-connected. When all of these come together, you get digital transformation at a scale like it is happening today.
Large enterprises have had access to decision making information from their ERP deployments in the past but the scale at which SMBs can now take their data and understand their biggest pain points, whether it is labour, pricing, costs, production or supplies etc and to bring in corrective actions very quickly using very affordable set of technologies is what makes the change more interesting this time around.
Digital transformation is here and it is a risk missing out on it because it is the essence of staying competitive.
How would you look at the role of Epicor in the customer’s transformation journey?
The role of Epicor is that of a key enabler in digital transformation. ERP has always been the backbone of any operations- it is the one set of records that you trust and the one set of data data source that CFOs and CIOs rely on when making decisions.
When we picked our area to focus upon, we had to be very clear. We wanted to be device agnostic. At the same instance, we don't want to be so far away that all we are doing is taking data in and putting data out. The area we have picked for ourselves in the value chain is where we can create maximum return of value for the customer. Frankly that changes by industry, changes by size of customer and also by the size of adoption of technology at customer sites. We have had customers coming up to us and telling they plan to automate their entire supply chain and they want to reduce their labor from probably twenty-five to two people, and they want Epicor to partner with them to be able to automate that. There are smaller customers who have come up and told us that they have devices that break down and they would therefore need sensors that are smart enough to collect that data and alert them. So we are obviously going to rely a lot on companies like Johnson Controls, Siemens etc as they do best in what they focus on and then we will also rely on Microsoft Azure as the stack to do a lot of the data aggregation. And, then we are just going to be keep providing the value back to the customer by focusing on what we do best, which is helping make decisions from data.
All the data from the IoT endpoints, come into the ERP system which helps make decisions. We don't have to worry about the stack elements, the encryption of data etc. And we don't have to worry about the nature of data- whether it is filtered or whether it is raw. We can rely on technologies that can help streamline all of that and then we can help make the decisions.
15-20 years ago, when you didn't have the cloud or the availability, the infrastructural costs of IoT were high because you had to worry about the various layers - the service fabric, the IoT servers, the standards of encryption and all of that which could slow down customers from implementing. Today, that has changed and a lot of that gets abstracted - we just deal with incoming data, aggregate it , make it decisions and visualise it so that customers can see their pain points and then sent it back to them.
Does Epicor work with other vendors for the data aggregation from IoT devices?
We have kept the option open today as standards are evolving. Look at the changes that EDI and XML had to go through before finally becoming standards. I think IoT data will go through the same kind of evolution before clear standards are created. Until then we want to stay agnostic and our closest partner in all of this is Microsoft Azure.
So there is the reliance on the Azure stack with the work they are doing on from their services fabric to their IOT and working through that to make meaningful use of data. In addition, we also have our own products- Epicor Data Analytics, Epicor Data Discovery and these products interact with the data to make decisions, to visualize, to predict with some amount of AI that is enabled.
We cannot predict or control what the customers have on site in terms of implementations and the data sources - it could be a large standard implementation to a one based on some cheaper devices, connected to the enterprise systems and sending out data. So we have to treat any of that as a data stream and work with that.
How does it impact security issues, especially with if there are cheaper IoT sensors in the network whose security could be suspect?
The biggest challenge probably that is holding back the mid-market from IoT implementations is that the weakest security link in their infrastructure could be a device. They could have excellent server security, encrypted networks etc but then you could have someone bring their device and literally tap into the network feed. The reason we want to be device agnostic is that we are looking at incoming data and once it comes into the ERP system, it is secured. The data stream could be anything, from XML feed, from EDI feeds, entered manually, from a device or any other means etc but our job is to accept data from authorized sources and once it is in, to be able to secure that. In addition, there is also the need to look at the structure of the data and see if there are any field that could risk exposing corporate data and therefore not access any data streams that are unauthorized. It is left to the service providers of the data to make sure they are authorized. Unauthorized data streams are blocked. Having said that, security is a growing concern with so many devices being manufactured and I think more standards need to be evolved that these devices would need to pass through. There are some standards but they aren't stringent as they should be.
How fundamental is cloud to transformation?
If you are looking for scale, elasticity in data usage, accessibility etc cloud is critical. The advantage with Epicor is we still have options of both, on premise and on cloud. We have many customers using these systems on premise and we tell them as long as they are willing in invest in hardware, load balancing etc manually, on premise will work just fine. The very nature of cloud supports this elasticity. Over the next few years, cloud will become more critical; it is pretty important today but it is still not mandatory today.
Do you follow a cloud first strategy with new customers?
Yes. With every new Business customers, we start with cloud - we tell them the value of the cloud and the growth. And if they want on premises solutions, we are glad to do that. But definitely it is cloud first strategy and the market and demand shift is clearly towards the cloud.
Do you see cloud seeing traction in manufacturing?
Surprisingly it does apply to manufacturing sector as well. the services was the first to move to the cloud. we would thought manufacturing would be a laggard but as a recently Morgan Stanley report suggests while 85% of workloads in the past were on premises and in the next one year, another 15% of workloads could move to cloud. The Manufacturing sector is probably on that level of shift towards cloud adoption. This is also partly because the cloud is more affordable to move into the cloud.
Elaborate on enhancements with your latest product release?
We have come out with Epicor ERP10.2.300 end of October. A lot of industry functionalities have been added. This includes a dealer portal, a PCID for metal stamping, an update on the MES solution, a field service solution etc. We have also worked on the look & feel of the products- a new dashboard, large screen etc. It is more dynamic and has the ability to do data discovery. This is going to be the start of a new journey.
We announced Project Kinetic earlier this year and this new edition of ERP is the first rollout of the new UI. It is not just about the look and feel but about the entire end to end experience from automation of data entry to ease of reporting. We do a release twice a year and customers will see more of the same with improvements.
There are different aspects addressed with every new release. The first is we have to bring in first class cloud products -everything from provisioning, identity, telemetry, we have to be the best. The second aspect is the industry focus, where we need to bring in top functionalities. The third is the look and feel which has been addressed with the new UI. And the fourth is compliance- that is changing and all of that needs to be addressed and included in different markets like VAT here, GDPR etc.