Manufacturing smes need cloud more than ever

5 Reasons Manufacturing SMEs Need Cloud More Than Ever

The business environment for sales teams in manufacturing and engineering industries is increasingly demanding: IT infrastructures have become complex, at the same time that everyday sales activities claim simplicity and ease. Additionally, CEOs demand a clear overview of incoming opportunities and the business process.

So how do cloud solutions help sales teams in manufacturing and high-tech industries to survive?

Before looking into the specifics of cloud solutions for sales teams, we need to understand the current situation:

Outsourcing of IT has failed

In the last decade, there was a major shift in IT operations. Starting in the late 90s, companies optimized their IT budget by shifting personnel costs to project costs via outsourcing. Furthermore, decisions of “buy vs. build” often were made in favor of building software. At this time, standard software often did not exactly match the companies’ demands, and they preferred a custom-tailored solution.

The outsourcing and custom-tailored solutions approach of the past is now becoming a legacy of many companies. As a result, IT is sitting on outdated solutions that are either expensive to maintain or are not maintained at all. Upgrade projects often fail since they do not offer additional benefits to the business. At the same time, sales people are left to standard office software such as Microsoft Excel to price quotes and calculate discounts, and to MS Word, which is prone to errors and lacks efficiency, to create proposals.

However, the rise of software-as-a-service changed the availability of new specialized software as well as the IT operations model dramatically. Chances arise even for small or medium enterprises (SMEs) to support their sales people in a way that is not only affordable but also the least disruptive in regards of their current sales practices. 

As business becomes more demanding, the role of IT grows more strategic than ever

In the past, IT was more focused on operating internal systems and developing custom solutions – or managing outsourced teams. Being faced with fast-paced business environments and CEOs demanding transparency and control over business processes, their mandate is becoming more strategic. Nowadays CIOs are key to strengthen and optimize business processes and thus take over a more consultative role, which supports the business owners’ decision-making process.

Performing this shift in responsibilities, CIOs must also balance and reorganize their financial and human resources to cater for more consultative workloads. Cloud software can facilitate this shift as the operations, maintenance, and support responsibilities move to specialists, which are rented in the sense of software-as-a-service (SaaS). At the same time, the recurring costs are shared among the customers of a software product and shift from CapEx (Capital Expenditures) to OpEx (Operational Expenditures) via a monthly or yearly subscription fee.

erp on premise vs cloud erp

Centralized internal systems do not work for sales people on the road

Another trend that emerged during the last decade—not only in manufacturing—was to centralize major systems like orders and material being maintained in one ERP system. This worked out nicely for personnel with a fixed work place, but is a problem for mobile people such as the sales force.

Opening up central systems for external access to provide sales reps with relevant information where they need it poses many security and data compliance risks. IT departments try to cover this issue by management of the internal network, reverse proxies, and VPN. However, secure operations of complex network setups remain complex, and users often experience these approaches as slow and cumbersome. Sales reps depend on fast and reliable access to sales relevant data anywhere and at any time.

Cloud applications can be the answer as they offer standardized, securely managed ways to synchronize or access internal systems data like ERP data and make these accessible in the cloud. Managing bandwidths and network to the users are both off the shoulders of IT, and become part of the SaaS package.

Collaboration needs vs. ad-hoc processes

Nowadays, especially in manufacturing, the value chain of a company with several locations can appear scattered, hence hard to support by IT. Sales reps are located where the customers are, while manufacturing premises are built and operated in lower-cost areas. Nevertheless, the need for collaboration between sales reps, manufacturing sites, and engineering experts is key to produce marketable solutions in an engineering-to-order scenario and to produce accurate customer quotes.

Supporting this essential part of the business process is no major feature of traditional software, but rather managed externally. Employees use email or other collaboration tools and applications. These gap fillers do not only pose security risks to sensitive data, they also don’t help structuring the often ad-hoc initiated collaboration process. Mailboxes are clogged, data gets lost, and IT finds themselves surrounded by a jungle of shadow IT.

A cloud solution can tackle this challenge when the respective collaborative processes are backed deeply into the system itself. Collaborative processes such as information exchange, collaborative quote inputs by different parties, document sharing, and approval processes happen directly in the software and on the objects that run the business processes rather than externally; for example, via email. Leveraging the numeral integration capabilities of a reasonable cloud solution, the users such as sales reps and managers can enjoy seamless integration with email programs like Microsoft Outlook.


Usability is key for sales people

As reality shows, IT cannot force users to stick to outdated software with insufficient features to support their everyday business challenges. Furthermore, users also stop using given software or tools if the usability is not satisfactory. The so-called “consumerization of business software” describes this trend and explains the resulting behaviour: Sales people go back to using pen and paper, look for easy-to-use applications running on personal devices like tablets, or don’t document their sales process at all. This is not only inefficient and non-scalable for an entire company, it also leads to a lack of transparency of the sales process, and managers are unable to pull production forecasts or make accurate revenue predictions.

Cloud software usually covers only a small business process in comparison to the much bigger on-premise suites of the past. This enables cloud solutions to focus on the specific requirements of users like sales reps and sales managers. Hence, usability is backed into the DNA of cloud companies, and this term does not only cover design and interaction patterns, but also general performance and response times which are essential in fast-paced business environments. The integration of existing workflows via Excel uploads and Excel, Word, or PDF downloads further help to increase the user adoption rate, thereby increasing productivity.

The 5 reasons to shift sales operations to the cloud

Summarizing the main challenges that CIOs in manufacturing and engineering businesses face nowadays, the following chances for a shift of the sales operations to the cloud arise:

  1. For SMEs, cloud solutions are an affordable and least disruptive way to replace legacy custom solutions or error-prone and inefficient gap-filling solutions.
  2. With the software-as-a-service model, IT operations, maintenance, and support can be shifted to experts while costs are moved from CapEx to OpEx, and the total cost of ownership (TCO) decreases drastically.
  3. Cloud solutions relieve the negative effects of data centralization for sales reps on the road, and deliver relevant sales knowledge to them in a reliable manner and under high security standards.
  4. A reasonable cloud application not only fulfills collaboration needs among the users, but also deeply backs collaboration processes into the system and ensures compliance with security standards and internal company approval structures.
  5. A strong focus on usability in cloud solutions leads to a high user adoption rate, and thus enables an efficient sales process in the organization.

Confronted with the role shift for IT departments from operations to strategic responsibilities – a fast-paced and highly competitive business environment and a highly demanding user group – CIOs of today need to invest in cloud solutions if they want to keep up. Leveraging smart and lean cloud solutions that limit costs and multiply productivity can be seen as a road to business success for SMEs in manufacturing and engineering industries.