Following on from the latest run of WhichPLM articles on end-to-end solutions, WhichPLM opens the floor to some of the the vendors who offer both ERP and PLM systems for their view on how the two systems can function together.
This week, Rob Smith meets with Mark Burstein, President of Sales and Marketing for NGC Software. NGC has been making apparel based systems since 1982 and its current Global Enterprise System offering is a fully integrated, end-to-end suite of solutions that includes (amongst others) PLM, SCM and ERP.
WhichPLM: With the recent downturn in global economies, are you finding that your customers have recovered quicker than some other industries with less resilient products portfolios and what do you believe are your customer’s key business drivers now moving forward?
Mark: Yes, without question. Most of our customers source globally and have used NGC’s Extended PLM (which includes SCM components) to not only focus line development and increase adoption rates, but to also track production, improve quality, and increase on-time deliveries.
WhichPLM: As a rule of thumb, we would look to lifecycle of around 3-5 useful years from an enterprise system (whether it be ERP, PLM, EPOS etc..), do you think we are going to see this “value window” being forcibly extended by consumers from their implementations? Do you think enterprise systems can still deliver a beneficial value over 5 years from go-live in the current market?
Mark: NGC has customers that have been live with PLM for 8+ years. Once a system is rolled out globally, and it is successful, there is little reason to attempt a replacement. PLM has been one of the hottest technology categories for the past five years, and most vendors continue to add functionality with each new release. The bulk of NGC’s development efforts are focused on our Extended PLM solution, so many customers plan upgrades every 2-3 years. I see the “value window” continuing indefinitely.
WhichPLM: What regions/areas are NGC themselves forecasting or experiencing strong demand for PLM and other enterprise level IT solutions? Why do you suspect the market is buoyant here ahead of other regions?
Mark: In RFA, I believe that the mid-market in North America (US$250 million – US$1billion) offers the greatest potential. Most large North American enterprises (>$5 billion) have already committed to a PLM system. Some of the Tier 1 PLM vendors are putting less emphasis on this vertical and are starting to wind down their sales operations. At NGC, the bulk of our customers fall into the mid-market segment, and we see tremendous growth going forward. We also have clients in Asia and Latin America and have seen interest from Europe as of late.
WhichPLM: …so how are you helping to deliver these customers better value from an enterprise system now against the market pre-2007?
Mark: I believe that market conditions have made most brands and retailers hyper-sensitive to all options that can increase top-line and bottom-line growth. These days, companies are looking for “quick wins” that boost performance – such as locking in raw materials prices, reduced sampling costs, improved margins, fewer markdowns/closeouts, and improved product quality. NGC performs extensive discovery during a sales cycle to identify the greatest areas for ROI related to a PLM project. In most cases, the payback is less than a year.
WhichPLM: The media is rife with case studies of catastrophically failed ERP and PLM projects, (albeit 1st generation projects) do you think running a full end-to-end system implementation project is a better value proposition than running separate projects independent of each other?
Mark: Most companies that have “vision” see the value of a full end-to-end system, but realize that they cannot wait years to see realized benefits. Most NGC customers select our products based upon the full scope of the enterprise application, but implement in phases rather than waiting/hoping for a successful “big bang”.
WhichPLM: Do most customers have the available capacity (both financially and at a resources level) to run dual projects? Do you think customers are fully aware as to what their own capabilities are for running enterprise level projects?
Mark: Many customers do not have the in-house staff to handle simultaneous enterprise implementations. That’s where software vendors with experienced consulting staffs can take on the bulk of the project workload and with it a lot of the delivery risk. Of course you have to ensure the consultants themselves have the suitable skills. Due to our heritage of nearly 30 years in the fashion industry, NGC’s consultants have extensive experience which combines deep apparel and technical expertise.
WhichPLM: …but surely not every customer has the correctly aligned company strategy and board leadership to implement such widely encompassing changes?
Mark: The direction and commitment must come from the top. Very few projects fail when the key stakeholders are engaged.
WhichPLM: So what specific benefits can a customer expect from integrating NGC’s PLM and ERP end-to-end ahead of the competitors in this space?
Mark: The scope of NGC’s Extended PLM is much broader than most other PLM applications, so benefits go beyond speed to market and improved efficiency on the front end. The SCM modules provide visibility into the production, quality, and logistics areas as well. Additional benefits include reduced markdowns, fewer closeouts, improved product quality, and more on-time deliveries.
WhichPLM: …would it not be better for a customer to look at the market and say “what’s the best ERP for my size, what’s the best PLM, what’s the best EPOS (or any other system segment) Etc…?” and plumb them together? Surely the database or data warehouse behind the scenes is equally accessible for all?
Mark: In some cases, it is best to own “best-of-breed” systems, but there are also great benefits to dealing with a single vendor. In most cases, TCO will be much less, the vendor will understand how each of the applications must communicate with each other, and the relationship between the customer and vendor will be much stronger.
WhichPLM: …but do you not think it’s risky for a customer to be fully dependent on one supplier? Doesn’t familiarity breed contempt after all?
Mark: No, however companies should select vendors that have a long track record of financial strength and stability, along with in-depth industry and technology expertise.
WhichPLM: At the technical level, is the NGC end-to-end system: one complete single system; separate systems seamlessly integrated or modular systems operating on a common platform? What influenced the design decision for this over the other options?
Mark: NGC built our products as stand-alone applications (for customers that do not require a full end-to-end system), but has seamlessly integrated them to handle all the areas required to run an enterprise. Further, each of our applications is modular, so the solution can be tailored to meet the specifications of the client. Our Global Enterprise Suite has over 50 modules from ERP, PLM, SCM, and Shop Floor Control. It is not uncommon to “mix-and-match” different modules in order to give the customer exactly what they want.
WhichPLM: Finally (and perhaps crucially), if you had a very immature client who had neither PLM nor ERP, and only had the resources to run one system project, which would you advise to start with and why?
Mark: That’s simple. ERP provides the functions that are required to do business including accounting, order entry, purchasing, and inventory control. If those areas are not handled properly, the client is missing the fundamental business systems and processes that will allow it to streamline productivity and efficiency. Without ERP, companies can’t be viable for the long term. With ERP in place, however, PLM will enable companies to grow at a much faster rate, make better decisions, and become market leaders. Due to the strategy that NGC has employed in developing its solution platform, whatever module our client adopts, future modules can be easily deployed with full, seamless integration across the platform guaranteed.
Read Rob Smith’s articles on this subject matter: