ERP in the cloud, a solution on managing “technical debt”

Now, manufacturing companies with complex needs, can move their ERP system into the cloud, “says Aage Ramstad, CEO of Mazeppa Consulting. Ramstad has 30 years of experience from the ERP industry, and digitalization of the value chain has always been a key focus. The renewed focus on digitization that we currently see is very good, and the Norwegian industry, especially SMB companies, must make sure to get rid of its technological debt before it’s too late.

It has become easier

– It has become easier than ever to exchange ERP systems. With a cloud-based system, investments in infrastructure and servers in the start-up phase are eliminated. Instead, you subscribe to a subscription that runs from the time you start working on the system. The result is more predictable costs, as opposed to the traditional pricing models most businesses are used to today. Upgrades are implemented automatically, at no additional cost, and the backup and security operating environment is handled by the supplier, says Ramstad. The upside of this is that more customers share a common system, thus sharing costs. The downside is that you must stick to the standard solution, which must therefore be relatively functional.

To achieve these pricing benefits, the system must be “Multi Tennant” –  simply having one’s own complete installation in the mountain of a supplier doesn’t do it. Many of the major ERP vendors, with systems written in the 80’s and 90’s, have a significant task in front of them, adapting these systems to a new era and a new technology.

The implementation process and review of the business processes will still require customer engagement and effort, but as all the definitions of how to set up the system for the individual business are eliminated, it may still require less effort than with a traditional system. The main effort is in defining users and their roles.

– It is therefore important that such an implementation takes place together with a review of how the business is working. The world around us changes rapidly, and the market conditions have changed the last 5 to 10 years. It is a great opportunity to trim these work processes while implementing a new ERP-system. This is a very important part of a digitization process.

ERP as a driving force for digitization

-We are entering a time when the requirements for conversion will be higher. Implementing new business solutions that support new business models is important to avoid set-backs. I would recommend companies to use the implementation of new ERP solutions as the driving force for digitizing the value chain.

A Norwegian industrial adventure

Hatteland’s ERP-system RamBase is a state-of-the-art solution for the industry segment. Hatteland is an innovation company that has demonstrated its ability to develop modern and high-tech solutions for an international market. Rambase was developed because of Hatteland’ s own need for a superfast and feature-rich ERP solution for the electronics business, a business that was later sold to Arrow, one of the world’s largest electronics distributor. Arrow is today RamBase’s biggest customer, and their system runs in the mountain hall in Nedre Vats. This is an important feature with RamBase – data is stored in a secure mountain hall in Norway, giving you full control of valuable data.

– In Mazeppa, we have been working on the implementation of ERP systems for several years, and have good experience with manufacturing companies. We have worked with large customers like Kongsberg Aerospace and Defense on the ERP system Infor LN, and we have smaller customers like Norxe AS at Rambase and Topro AS at Infor M3 (formerly Movex). Our business consultants’ expertise is now been offered to small and medium-sized businesses, and we base our ERP-recommendation on customer requirements and needs.

How big is your company’s “technical debt”?

Many Norwegian industrial companies made their investments in ERP solutions 5 to 10 years ago, and as such projects are demanding for the customer organization, it is a known issue that companies postpone upgrades and updates. Upgrades have been halted since the last project, which have created a gap between today’s requirements and the initial requirements at the time of the investment. Many businesses are still running solutions that have expired, and the longer you wait the bigger this gap will become.

This situation can be described as “technical debt” because the lack of adjustments of functionality results in a very demanding upgrade, and the whole process repeats itself.
– Technical debt describes the distance between ideal and the actual functional and technical solutions in your business. Having a modern foundation in the form of a modern ERP engine that supports your business strategy is essential for survival in an ever-changing and internationalized world.

As the right use of modern technology is becoming increasingly more important in meeting customer demands and expectations, technical debt is an issue that every company must consider. Businesses that have the will to adapt, will be able to keep in control of their technical debt, and will be more likely to succeed in the future.