Small to Medium-sized Businesses (SMB) makeup almost all of the metal casting market. While the definition of SMB varies, a good range for the metal casting industry would be Small, 1 to 49 employees; medium (low-end range), 50 to 249 employees; medium (high-end range), 250 to 499 employees; large, 500 and more employees. 

Most SMBs, and indeed most metal casting companies are privately held, with ownership with a leg on each side of multiple generations, and are business focused on niche markets or discrete set of customers. SMB also tend to deliberate their resources on their core business objectives, in this case, providing high-quality castings, engineering services, etc. They do not have the luxury of expanding wide resources on IT systems and infrastructure resources for not only the initial purchase but also the often underestimated, ongoing costs (product and people) associated with maintaining high-end computer hardware and software systems. This is why “the Cloud” is such an important development for these businesses.

But first, what does the term “cloud” mean in this discussion?

The National Institute of Standards and Technology (NIST) defines cloud computing as “a model for enabling ubiquitous, suitable, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” This is a more formal way of saying, “accessing information systems through an Internet connection.”

Why is the Cloud such an important development for metal casters?

It allows small and medium-sized metal casters to realize the benefits and power of integrated business systems, historically reserved for much larger organizations, at a relatively reasonable cost, without the IT resource requirement, meaning the initial conjecture cost as well as the ongoing operating and preservation costs. Business systems in service in the Cloud offer the following benefits:

  •          No cost to purchase and maintain computer hardware components
  •          No cost to purchase and maintain computer software systems (operating and applications);
  •          No need to manage daily backups, database tuning and other system maintenance;
  •          No need to implement and administer disaster recovery technology;
  •          No need to invest in or to check and maintain security, anti-virus, anti-ransom ware systems.

The advantages go beyond cost, however. Cloud-based business systems enable small and medium-sized metal casters to put into practice feature-rich, robust, integrated application software for a fraction of the cost of a few years ago. If implement properly and fully endorsed by all levels of management, these systems can significantly improve customer service, on-time delivery, product quality, inventory reductions, cash flow, and numerous other business system improvements, according to the specific needs of your organization. And, all that the business needs to make these advantages available is an Internet connection and web browser to access the system which can be done anytime, anywhere, from any device.

What kinds of business systems are deployed in the Cloud?

Just about all major categories of business software are performing effectively in the Cloud, including:

  •          CRM – Customer Relationship Management,
  •          SCM – Supply Chain Management,
  •          HRC – Human Resource Capital (including Payroll functions),
  •          ERP – Enterprise Resource Planning (including Financials), and
  •          MES – Manufacturing Execution Systems.

One of the more exciting aspects of Cloud-based business software implementation involves shop-floor management systems. You might think there is limited application for linking your manufacturing equipment, e.g. die-casting machines, mold making and core making machines, etc., but actually the ability to monitor activity, adjust set points, diagnose errors and fix problems, either by the mechanism supplier or the casting producer, creates a more immediate and cost-effective solution. Also, by coordinating these work centers in the Cloud, it is easier to establish interfaces for them with other cloud-based systems.

For example, a diecasting machine monitoring system in the Cloud would be very easy to interface with an ERP system in the Cloud, providing instantaneous awareness of shot count, good pieces, scrap pieces, etc. all with a simple Internet connection, at anytime, from anywhere, with any device.

But, what if Cloud computing products and services are just a fad? Today’s business journals are filled with pertinent facts forming an argument that Cloud capabilities provide SMBs with more opportunities to improve capabilities and performance:

  • In “Why your company may dump QuickBooks this year,” for Forbes, author Gene Marks offers the argument that on-premises software is quickly becoming an artifact of the past, especially for small and medium-sized businesses (SMB). “The Cloud has caught up to the accounting and ERP world,” Marks writes, “and there are many competitors to QuickBooks standing by ready to pounce.”
  • Cloud based ERP software is expected grow 10% annually for the period 2014-2020. On the far horizon of the business software world, venture capitalists are not investing in companies that are not established in the Cloud. According to Inacct CEO Robert Reid, “VCs are not investing in on-premise software companies anymore.

“In the next few years it’s inevitable that you’re going to replace your on-premise QuickBooks system for something cloud-based,” he predicted, adding for emphasis: You won’t have much of a choice. And you’re going to take that chance to look around. And you’re going to discover there are some interesting alternatives.”

  • According to a survey by Gartner, a research firm that specializes in the IT sector, 47% of small and medium-sized business have moved or will move their core ERP software to the Cloud by 2019.

InformationWeek‘s 2014 State of Cloud report found that 64% of companies (all with 50 or more employees) using some form of cloud technology. Companies’ widespread embrace of the Cloud– seem ready to finally bring ERP into the fold in the coming years.

In Forbes’ “Roundup of Small & Medium Business Cloud Computing Forecasts and Market Estimates, 2015” Louis Columbus reported that: 78% of American small businesses will have fully adopted cloud computing by 2020, more than twice the current rate of 37%.

As with any new technology, there are some implementation questions. Two concerns commonly raised when considering a Cloud ERP solution are 1) Access Reliability and 2) Data Security. These points should be addressed by any business considering any software in the Cloud:

1.Access Reliability

  • What level of redundancy is built into the server hardware at the data center?
  • Should a system component fail at the data center, how “fresh” will the data be after it’s restored?
  • What level of redundancy is built into the power feeding the data center?
  • What level of redundancy is built into the network (Internet lines) feeding the data center? What is the disaster recovery plan should the data center experience “an event”?
  • Does the Cloud ERP provider offer an uptime guarantee?
  • Does my local ISP (Internet Service Provider) offer an uptime guarantee?
  • What options do I have if my local ISP goes down, e.g. redundant line, hotspot, etc.

2.Data Security

  • Who has access to the data center?
  • What is the physical data center security, e.g. key card, biometric, video, security staff, etc.?
  • What level of firewall protection is provided?
  • Can email attachments be opened on the Cloud servers?
  • Is Denial of Service (DOS) protection enabled?

The appropriate party providing the service should answer all of these questions adequately. The technology exists to address these concerns and most reputable providers have addressed these issues, and then some. Realistically, an SMB would find it difficult, if not impractical, to build and maintain a world-class