With the COVID-19 pandemic raging through the world, remote working has taken centre stage as companies and organisations scramble to protect their employees and keep their operations running.
During these trying times, organisations are therefore more reliant on their IT systems. Many of them are realising the value of having a good ERP (Enterprise Resource Planning) system, as this software system, apart from its many benefits, greatly facilitates remote working.
ERP has become an essential toolkit in today’s world of dispersed supply chains and workforces as it brings together various vital functions like planning, purchasing, inventory management, sales, and human resources, as well as providing for consolidated financial reporting.
ERP software gives managers a complete picture of the company’s operations at any given point in time, as well as the necessary business intelligence (BI) to plan for future growth and take care of bottlenecks – in the supply chain for example – even before they happen.
It is little wonder, therefore, that the global ERP software market is expected to be worth US$78.4 billion by 2026, growing at a compound annual growth rate (CAGR) of 10.2 percent from 2019 to 2026, according to data from Allied Market Research (AMI).
AMI notes that the factors behind the increased demand for ERP software include the need for operational efficiency and transparency in business processes, and the rise in demand for data-driven decision-making. In addition, AMI expects that a surge in the development and use of cloud and mobile applications will drive growth in ERP software adoption.
On-premise ERP software is still used by many companies due to various factors ranging from data privacy and data confidentiality, security and other reasons that may be peculiar to a specific company or industry. However, overall, it is becoming increasingly clear that cloud-hosted ERP solutions provide more flexibility and are better suited for remote access – not only for employees but also suppliers and other stakeholders.
Cloud ERP for the Electronics Sector
All industry verticals benefit from having a good ERP system. For the electronics industry, in particular, it is an especially vital requirement. Decision-makers require a 360-degree, real-time vision of all business processes, which only a good ERP system can provide. This access is vital in an industry that faces rapid obsolescence due to technology changes, is at the cutting edge of automation, and is a market leader in the use of Industry 4.0 manufacturing techniques.
A typical electronics company must deal with complex and fast-paced operations within an extremely competitive market space. Choosing the right ERP can therefore be crucial in determining success or failure.
Kyoei Denki, a Japanese electronics materials trading company, founded in 1951 and headquartered in Tokyo, felt the need for a good ERP system more than 10 years ago. The company has 17 offices spread across Asia and provides a wide range of industrial materials, optical products like LCD backlight modules and touch panels, and processed goods like adhesive tapes, cable tubes and heat solution products. It is also a value-added reseller.
In 2007, the company invested in the SAP Business One ERP solution. Back then, this on-premise ERP solution helped the company to stay on top in what has always been a highly competitive market of wholesale distribution for electrical apparatus and equipment wiring supplies. Over the years, as the complexity of the business grew and more competitors moved their operations into the cloud, Kyoei Denki started to realise that their existing ERP system, despite some upgrades, did not meet the present day requirements expected of supply chain distributors. The company sources materials from multiple vendors around the world and hence needed a real-time, data-driven and highly automated ERP system to remain competitive.
Transforming from On-premise ERP to Meet Modern Business Requirements
As pressure on its on-premise ERP system grew, the company’s small IT team found it increasingly difficult to respond to server issues that started cropping up. The system was down, usually at least once a month, and this was negatively impacting Kyoei Denki’s business operations.
Apart from maintainability issues, Kyoei Denki was facing another critical problem. ERP for small businesses are often used not only by office staff but other stakeholders along the supply chain. Giving seamless access to these stakeholders, as well as employees working remotely, was proving to be a major headache for the company. These users had to connect using a virtual private network (VPN) to access information from the server. The company found that the process was too time-consuming and error-prone, and this hampered the speed of business.
Kyoei Denki also realised that their version of SAP Business One (version 8.8, released in 2011) was outdated and this denied them access to the latest features and upgrades available for SAP Business One customers.
The Cloud Migration Decision with Axxis Consulting
In 2017, Kyoei Denki contacted systems integrator Axxis Consulting, an SAP partner and value-added reseller, for help in upgrading their ERP system and providing a pathway for cloud migration.
Axxis’ mandate was to help Kyoei Denki identify the best solution for the business and to implement it across the company, including rolling it out to their other businesses in Philippines and Malaysia. The Japanese company was looking for a solution that would provide users with web-enabled access from anywhere, at any time.
After discussing the issue in detail with Axxis, Kyoei Denki decided to move their ERP system to the cloud to reduce cost and friction for the business. Based on the clearly defined scope of work, Axxis was able to provide Kyoei Denki a fixed price project cost that included all the critical features required.
The new ERP solution adopted by the Japanese company was the cloud version of SAP Business One hosted on the AWS cloud. Both Kyoei Denki and Axxis felt that this was the ideal ERP solution to meet the company’s growing requirements. The feeling was that the AWS cloud was a good choice to host the service because it provides a highly reliable, scalable and low-cost infrastructure platform that already powers hundreds of thousands of businesses in 190 countries around the world.
Together with AWS, Axxis was able to quickly and efficiently move Kyoei Denki’s IT infrastructure to the cloud. The consulting company helped to identify main requirements needed to upgrade existing systems while migrating them to the cloud and extending the features to its other businesses in Philippines and Malaysia.
Cloud-hosted SAP Business One Delivers Significant Productivity Improvements
With the migration to the cloud and an upgrade to SAP Business One version 9.2, Kyoei Denki is already reaping the benefits of a significant improvement in their productivity.
Kyoei Denki’s daily operations have become more streamlined and optimised since the move to the cloud. The cloud-hosted SAP Business One ERP solution runs faster with less glitches and is conveniently accessible from anywhere. Whether a Kyoei Denki employee is in the office in Singapore or at home in the Philippines, access to the solution isn’t a problem and they can carry out their daily responsibilities.
Moreover, its IT team no longer has to worry about potential system downtime and grapple with the hassle of maintaining on-premise servers. As a result, Kyoei Denki estimates that its IT costs will proportionately reduce over the long-term. It can now innovate faster and more easily develop its business environment and manage services. A good example of this is that since Kyoei Denki moved to the cloud, reports that previously took one to two hours to generate and print now only take 10 to 15 minutes.
Kyoei Denki is working with Axxis to explore more ways to improve its SAP Business One solution. One area they are looking at is an enhancement in their financial consolidation reporting.
Thanks to help from Axxis Consulting, Kyoei Denki now has a strong ERP system that streamlines their business operations by increasing the availability of its services and products. This helps the company to remain at the top of its game in its highly competitive industry.
Consultants like Axxis, who offer a range of services from strategic consulting and technical development to implementation and support, can help businesses identify and deploy leading-edge technology solutions to ensure success in their digital transformation projects. Such projects, as in the case of Kyoei Denki, enables companies to undertake the technology transformation required to run their operations in a simpler and faster way, with access to more insights than ever before.