ASIA has been a darling region for businesses for some time now. And software provider Epicor is similarly investing in the region as it sees a strategic shift in the opportunities available here.
As more companies look into the adoption of new technologies, Epicor Software Corp chief technology and product officer Himanshu Palsule says there is room for it to grow by enabling these businesses to address their pain points. SMEs, in particular, are looking at ways to leverage digital transformation to leapfrog to Industry 4.0.
“There is a new global competition. Traditionally, a lot of small businesses have competed in the domestic market. They knew who their competitors were, and the location of their buyers. But with the likes of Amazon and Lazada coming in, their concern is that they can’t predict their competition the same way they used to.
“They can’t manufacture their goods in the same way or distribute them from the same centres or have stores in the same areas. So there’s this whole advent of digital ERP (enterprise resource planning), where they want to take their business further, they want to conduct e-commerce, they want instant fulfillment, they want rebates and discounts that are applied at any point of their supply chain.
“So our goal since two years ago is to be the leading cloud vendor in the markets we serve, where we really go to these SMEs and help them compete with some of the global guys, ” he says.
Palsule notes that SMEs are looking for more insights from their information. There is higher demand for an ERP that can provide them with better business intelligence and help them compete in this new competitive market.
But one of the challenges often cited by small businesses in adopting new technology is the upfront capital to purchase the necessary infrastructure. Here is where cloud-based ERP would come in handy, he says.
“The other thing is, ERP has a broad spectrum. It covers financial, operations, manufacturing, supply chain, e-commerce and so on. We want to enable them to get started with their biggest pain point. If your issue is you can’t predict inventory demand, for example, just get going with basic warehouse management and financials.
“As your business grows, you can bring in the other elements, ” he says.
This will also help reduce upfront cost for companies.
With more companies embarking on their digital transformation plans, businesses in Asia will eventually catch up to firms in more advanced markets such as the US, where the use of technology in their operations is more specialised.
“For example, manufacturing in the US has become very strategic with the advent of technology. Cost has really been squeezed down because of off-shoring. So they are very specific in what they need and their requirements are more specialised and boutique-ish, like how do we design the product to optimise cost.
“In the Asian region, it is more on mass manufacturing.
So there’s more focus on manufacturing that is generic and built to scale, but manufacturers want the performance. They are processing large orders and need something that’s very fast, ” he adds.
Certainly, there is room for companies in Asia to move up the value chain, which would also give software providers like Epicor room to grow with the specialisation needs in the region.
Currently, the manufacturing and distribution sectors make up the bulk of Epicor’s business – about 60% – followed by retail and services.
However, one of the challenges the region faces in utilising technology to move up the value chain or to leapfrog is the slow development of infrastructure here.
“According to reports, it seems that development of infrastructure is unevenly distributed in the region. There are certain countries, like South Korea, Taiwan, Singapore and parts of China, where this has been largely solved. Countries like Hong Kong are at the cusp of making the change. And Indonesia and Malaysia have some catching up to do.
“Ten years ago, the focus was largely on outsourcing of manufacturing where it was a volume business. Now, with things like the Internet of Things (IoT), it is the strategic nature of manufacturing that is happening here. So I feel the country that starts to figure that (infrastructure bit) out, will have an advantage.
“So countries have to look at technology and decide what is that one thing that is going to differentiate them and make the investments in that and double down.
“Malaysia’s opportunity in catching up, and also to leapfrog, is to start thinking about the aspects of digital transformation. Malaysia really needs to focus on infrastructure. If infrastructure is solved, given the proximity to some very large markets, I see the advent of the same advanced manufacturing happening here. I think it’s a matter of time, ” he shares.
On the progress of 5G technology, Palsule says Epicor is waiting to see how it evolves before it makes any decisions on corresponding product developments as it is early days yet.
“I think if you want to adopt 5G, you’ll have to make some pretty significant changes to your infrastructure. And along with it comes risks. We need to understand the use case of 5G and blockchain and look at how can we help a company make better decisions.
“I think it remains to be seen, if it will have any impact or if it has an impact, when will it be materially important. The trick for any software manufacturer is not the technology, it’s about the adoption and use cases that make it viable, ” he says.
Palsule advises SMEs not to be carried away with concerns about technology.
Instead, he says they should focus on identifying the problems that they need to solve and then apply the relevant technology to solve those specific needs.