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One of our key software partners in a recent post reminds us of the long-standing value of a “product configurator.”  Because we work so much with manufacturers and distributors (almost exclusively actually) we see the value in these products every day, and find our own manufacturing software solutions well-equipped, either intrinsically or via third-party add-ons, for them.

As our partners at Insight Works https://www.dmsiworks.com/products/configurator/ (formerly DMS – Dynamics Manufacturing Systems) explains theirs…

A Product Configurator significantly simplifies the creation of production Bills of Material (BOMs) and Routings, or assembly BOMs, to make quote and order generation more efficient.

In the Insights product, new features include:

  • Easily Configurable Rules: Set combination rules for specific products. For example, when building a bicycle, if a specific style of handlebars is selected then a specific lamp will be included while the bell will be excluded.
  • Apply Multipliers: When it comes to bulk material usage, multipliers can be used to ensure automatically generated BOMs include waste and trim material. For example, a window frame may require an additional 10% of frame material for production purposes which will be cut and trimmed for the final product.
  • Build Sophisticated Rules: For anyone who may require more sophisticated rules not supported by the user interface, Product Configurator includes an API… so that rules can be done without a developer license, allowing end-users to create “scripts” for rules.

 

It all adds up to the ability configure a bill of materials so that end products can be built according to the rules that you specify.

These are ideal for companies that make to order or who build assemblies.  They typically support thousands of functions.  Whereas early configurators of the 1980s and ‘90s in large scale systems once ran in the hundreds of thousands of dollars, today’s solutions are a tiny fraction of the cost, with far-ranging capabilities available on PC-based systems.

Using pre-configured items saves lots of time… eliminates countless data entry and keyboarding mistakes… greatly simplifies order-taking for the sales team… and ensures product accuracy by ensuring that build-rules are always followed.

If you build to assemblies or make to order, you owe it to yourself to look into the world of product configurators.  They frequently pay for themselves quickly, and many times over, while increasing your competitive edge in terms of improved order accuracy, reduced order and build times, and greatly simplified order taking.

We’ve written here before about the powerful capabilities of the emerging science of quantum computing – the idea that computers using the properties of sub-atomic particles can perform calculations many orders of magnitude faster than the speed of today’s computers.  This opens entire new worlds of computing power, and of course, potentially failsafe encryption.

Today, we’ll look very briefly at the latest developments and opinions.

According to The New York Times, China is moving forward at a rapid pace, working on building the first actual quantum computer while focusing on “encryption that relies on the same concepts from the world of physics.”  That raw power could break current digital encryption, putting at risk everything from billions of dollars in e-commerce to national secrets in government databases.  Thus, the race is on for quantum encryption to protect data too.  Quantum encryption would make it evident if a message had been intercepted.

As John Prisco notes in the TheHill.com, this has to be a national priority and could turn out to be “as important as previous national contests such as the arms or space race.”  China has invested “tens of millions of dollars building networks that can transmit data using quantum encryption.”

Others think the fears are overblown, since there are currently no functioning quantum computers.  Indeed, there are “gargantuan technical challenges” to be overcome and researchers have been saying we are 20 years away for 20 years now, according to Mikhail Dyakonov in IEEE Spectrum.

But most experts are not so pessimistic about quantum.  Martin Giles in the MIT Technology Review says our nation needs to be prepared, and a recent report from the U.S. National Academies of Science, Engineering and Medicine says “we need to speed up preparations for the time when super-powerful quantum computers can crack conventional cryptographic defenses.”

In the end, the biggest challenge may we be developing quantum-proof standards and then getting industries to upgrade their hardware and software to meet them, according to a recent tech article in The Week.  “If hackers get their hands on quantum-computing technology before there’s widespread quantum encryption, the result could be a security and privacy nightmare.”

Just what the world needs to worry about now.

 

Rather than our usual business/tech post today we’d like to announce that Productivity Strategies & Solutions, Inc. (PSSI) has at long last launched our new website, which you’ll find at:

www.pssiusa.com

Besides a more up-to-date look and feel, we think it speaks more directly to our core strengths in using ERP software as a tool for business improvement – not an end in itself.

We are excited to offer a couple of very strong ERP solutions to our clients.

We are proud to back up our offerings with over 31 years of strategic business counseling experience.

And we are delighted that those solutions can be delivered by a team that has stayed together for so very long and enjoyed so many years of business improvement insights and consulting.

Thank you… And as always, let us know how we can help!

If our “old-fashioned” Christmas scene below puts you in mind of warm memories, happy times and a cozy day of rest, then we’ve done our job here today…

 

We appreciate all our families, friends, customers and partners on this day and throughout the year.

We thank you, and wish you the very merriest of Christmases, the happiest of Holidays, and the warmest regards for you and your family!

The Inventor of Search

first search photoDone searching for Christmas gifts by now?  Then here’s a little anecdote about the real first search engine –long before Larry and Sergey became billionaires building Google.

In the fall of 1963, two men send the first known long-distance computer query (this, according to a sidebar article by April White in the September 2018 issue of Smithsonian).  Six years even before Arpanet (the precursor to today’s Internet) and more than thirty years ahead of Google, Charles Bourne, a research engineer who built the first online search engine, and Lenoard Chaitin, a computer programmer, sent the first query (the actually question they asked is, amazingly, lost to history!).

Here’s what we do know.

Bourne and Chaitin achieved their breakthrough at the Stanford Research Park in Menlo Park, California, with funding courtesy of the United States Air Force.  At that time, most information retrieval was physical, where for example data would be stored on punch cards and then sorted by a computing machine.  But the Cold War era demanded a more efficient process, and the Air Force wanted to be able to sort through its treasure trove of literature about Soviet technology quickly and efficiently.

In solving the Air Force’s dilemma, the researchers were ahead of their time, designing a program to work more or less the way Google does today.  A user could search for any word in the existing files – a database of seven memos that Bourne actually had typed into paper tapes and then converted to magnetic tapes.  350 miles away, Chaitin sat at a bulky computer terminal with a 32 character-wide screen and sent a search query.  The request went over the phone lines (that apparently were about 1/10,000th the speed of our smartphones today).  A few moments later, the correct reply was returned from the search of the distant database.

The two had proven for the first time that online search was possible.

Ironically, the Air Force shut down the project a short while later.  The world, apparently, wasn’t ready.  They estimated that an entire file search could be completed in about 30 seconds, but that “it was not envisioned that the user would always have a continual need for on-line computer facilities.”

Today Bourne, now 87, says that “You really couldn’t imagine, at that time, doing a lot of things with a computer.”

 

 

8 years ago we first published a series of posts entitled “Software That Matters.”  It was an ERP implementer’s point of view, culled from long experience, on why and how to purchase a business management software system.  Later, we turned Software That Matters into a popular white paper that has since been viewed hundreds of times.  

Now eight years later, we thought it was time for an update, to reflect lessons learned since then.  (We also did a 2015 update three years ago.)  Much of what we wrote then remains every bit as true today.  But we decided again to carefully retrace our steps, re-edit our paper, add some comments and present it as a series of blog posts that will carry us through November, 2018.  We think that’s timely, as many companies at this time of year tend to reconsider the software they use to run their business — and how they might do better.

In our series we will again try to convey what’s important, what to measure, how to buy, what works, what it costs… and the many other business considerations required of this strategic investment, in what is probably the most important (and expensive) software a company will ever buy.  In other words, the Software That Matters.

 

Key Conclusions About ERP

Our purpose has been to set down in writing the fundamentals for how you know when you need an ERP system (or a new system)… its strategic importance… the key motivators that indicate the need for ERP… a few client success stories on ERP’s benefits… what it costs for software and services to get started… how to get started… key performance indicators… the importance of turning information into action… and what your business management system should provide.

We’ve covered a lot of ground.  While covering the broad spectrum of ERP in the small to mid-size business requires dealing in some generalities, we’ve tried to be specific as possible about why to do it and what a typical project might cost — of course, there is no ‘typical’ project, but our guidelines should certainly give you a few key objectives and a manageable budget from which to work.  A few key takeaways:

  • Remember, ERP is a strategic investment in your company’s long term health, even survival. Thus, it is a long-term business improvement strategy.  It is essential to sound growth.
  • You’ll know you need ERP if: You have information scattered across many independent ‘silos’… You frequently key and re-key data… You rely on spreadsheets to run your business… Different parts or your business do not have equal, common access to others… Information is hard to find, organize or retrieve… You don’t know what it costs to complete a project or build a product… You have no common database or history of projects, products, customers. In short, if you don’t have all your information under the fewest possible umbrellas, then you need to look into an ERP system.  How else will you be able to discover, report, and turn information into actions that lead to significant business improvement and growth?
  • Done right, ERP pays for itself – many times over. ERP will make you money.
  • Start small. Where possible, segregate one or two key functional areas for early-stage implementation.  Work from a project plan.  Review and assess regularly.  Build, a step at a time.  Remember, like continuous improvement (which ERP really is), it’s a process not an event.
  • Recognize the costs. Each project is unique, but a business in the $10 to $30 million dollar (revenues) range can get all the software it needs and a good foundation in services for around $100,000.  Again, user counts and complexity greatly affect the final figure.  But it’s a good starting point for a strong foundation that you can build upon for years to come.  You can probably even get started for less than that, but have realistic expectations.  Oh, and don’t skimp on training.  Scale back the scope of your efforts if need be, but don’t shortchange the very people who will make (and save) you money when ERP is intelligently implemented.  Train them well.
  • Your mother was right – if it sounds too good to be true, it is. Trying to go it alone or ‘do it on the cheap’ yields failure stories, not success stories.  Do your homework.  As W. Edwards Deming said: “It is management’s job to know.”  That’s how companies get to ROI.

 

 

8 years ago we first published a series of posts entitled “Software That Matters.”  It was an ERP implementer’s point of view, culled from long experience, on why and how to purchase a business management software system.  Later, we turned Software That Matters into a popular white paper that has since been viewed hundreds of times.  

Now eight years later, we thought it was time for an update, to reflect lessons learned since then.  (We also did a 2015 update three years ago.)  Much of what we wrote then remains every bit as true today.  But we decided again to carefully retrace our steps, re-edit our paper, add some comments and present it as a series of blog posts that will carry us through November, 2018.  We think that’s timely, as many companies at this time of year tend to reconsider the software they use to run their business — and how they might do better.

In our series we will again try to convey what’s important, what to measure, how to buy, what works, what it costs… and the many other business considerations required of this strategic investment, in what is probably the most important (and expensive) software a company will ever buy.  In other words, the Software That Matters.

 

What about the cloud?

The cloud, which simply refers to software served up via the internet, is clearly the future of computing.  But what about today?  Like any technology provider today, we have our own opinions.  You should read others’ too and form your own conclusions.  And as famously noted long ago, “Follow the money.”

Realistically, the internet (i.e., cloud) will be to this century what the electric ‘grid’ was to the last: ubiquitous, always on, ever-ready.  (Except, of course, when it’s not.)  It’s still early days in the journey to always-on applications, but if you look closely, you see it already – in your phone and tablet apps, perhaps in your email or your picture sharing sites, in the voice over internet protocol for telephony or Skyping.  Apps served via cloud will continue to grow and improve over time.  Count on it.  And make no mistake, cloud in the ERP space is growing rapidly, even though on-premise solutions still make up the largest share of sales, for now.

But let’s start with the money.  For a few decades, companies that provided business software could reliably count on adding numerous new users annually.  Selling software to new users was, in itself, intrinsically profitable.  And for a while, there was always a new customer to be found around the corner.  Predictably over time the share of new customers (i.e., first-time buyers) dwindled.  In the accounting software arena, which is at the core of today’s ERP systems, growing software companies could see a point of diminishing returns in which revenues would necessarily shrink as the number of new “customer adds” slowed down.

Eventually, to stem the loss, publishers came up with software maintenance programs – added revenue they could extract on an annual basis in return for keeping customers current on their software.  This annual revenue stream helped pay the salaries of their software developers while motivating publishers to continue to build new, improved releases.  The annual revenue thus earned helped offset some of the loss of dwindling “new” sale revenues.

More recently, as technology followed Moore’s Law in terms of dramatically increasing scale and capabilities, hardware prices declined and vast server farms and data centers began to proliferate.  Advances in both hardware and software began to make it possible to serve up applications to many clients on a massive scale.  Today, virtually any type of software you can think of is available in a browser-based, web-friendly manner.

But does that mean it’s right for you… or that you’re ready for cloud?  Much has been written about the pros and cons of cloud.  Here’s what we think you need to know.

  • The cloud is already great for a number of applications including email (a lot easier than running your own Exchange Servers), files sharing and storage/archiving, sales automation and even light duty accounting systems – especially when you’re fine with an out-of-the-box solution.
  • Cloud will save you money on hardware, at least in upfront costs. With cloud, you’re paying someone else an amortized cost essentially to rent their hardware.  In the long run it adds up, but if you’re faced with immediate server and workstation investments, you can eliminate much of that initial cost by going with a cloud solution.
  • The world is moving towards a cloud-based “rental” model – slowly. Again, follow the money: cloud purveyors have two goals: your monthly revenue stream, and locking you in for the long haul. The more you begin to depend on them, the more you will depend on them.
  • Remember, with cloud, you pay every month: for the hardware, the applications, the business software, the middleware layers, the services, the operating system, and on and on. You pay by the user, by the month, for the services proffered.  And you’re never ‘done.’  Do your homework, and your own math.
  • Also a plus with cloud: updates are frequent, built-in, and often automatic.  If you’re running a vanilla version of the publisher’s software, upgrading becomes a fairly easy, and regular, matter.
  • By contrast, if you buy the hardware and software upfront, you pay once (or over a period of time if you lease) – but at some point (just like a car), it’s actually yours. If you’re the type who buys a car and pays a few years on the note and then keeps driving long after it’s paid off, then you appreciate this kind of thinking.  You know it saves you money, and gives you ownership, in the long run.
  • The promise of cost-savings in the cloud architecture (besides the hardware savings of renting someone else’s) lies in the concept of multi-tenancy wherein one software application serves many customers (tenants) or companies; and multi-threading, in which a single processor can push out multiple threads of instructions, potentially leading to faster overall program execution at lower cost. It’s a single instance of software licensing running multiple customers, all managed from a single location.  This is ideal in a situation where you – and all the other companies on that system – run mostly identically, with no need for unique customizations for example.
  • On the downside, when the internet is down at your location – for any reason – then you’re down.  You can back up power with a generator, but there are no internet generators. If your shop floor production is depending on it, this could be a problem.  A very costly problem.  If internet reliability is a problem at your location, this needs to be considered.
  • Customizing your software and its internal processes to match the unique requirements of your business tends to run against the multi-tenancy grain of the cloud. If your software requirements are different from those of the other tenants, then you likely require a separate instance of the software.  This is especially true in customized environments like manufacturing and distribution, to name just two.  And that creates issues (read: costs or capability) in the cloud.  Those customizations are very often one of the keys to what makes your company unique, your service better, or your margins better.  Without them, you’re not entirely you.

So as you do your due diligence, be sure to take a hard look at the numerous pros and cons of the cloud.  Ask questions and seek a variety of viewpoints.  Work with your providers and consultants to determine the deployment method that works best for you, both now and in the long run.  You only want to make this decision once.

We’ll wrap up our entire series on Software That Matters with some “key conclusions” in our final post, next.  Stay tuned, one more time…