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Insight

Software Bridging the Technological Gap of SMES

Mon, 09/01/2014 - 13:10

“The Mexican market has two faces: automotive manufacturers with high-end technologies and local companies that are yet to incorporate sophisticated technological advancements in their processes,” explains Gunther Barajas, Commercial Director of Epicor. His company has undertaken the task of levelling this digital playing field between hyper connected companies and emerging ones. As an enterprise resource planning (ERP) software provider, Epicor strikes a balance in its solutions. “We have different versions of our product. The enterprise solution is aimed at multinational companies while the Express solution is for smaller, national players.” Epicor has identified that transnational companies established in Mexico often come equipped with their own software. Barajas says it is important for international companies to adopt local software solutions since they are then able to control local production and assembly lines far more easily. “We are a bridge that connects the company in Mexico to its headquarters’ ERP system,” he explains. According to Barajas, another practice of OEMs is requesting all its suppliers to adopt a particular software solution to ease the interaction. “With the new technologies we use, the company can be connected to any old software platforms. This is why foreign companies entering Mexico are open to working with us and adopting a local solution while maintaining ties to their general ERP,” he says. However, Epicor sees the SME segment as offering the most potential. “Our prospective clients are SMEs that wish to increase efficiency and incorporate automated processes to enhance their competitiveness and gain the ability to evolve based on industry needs,” Barajas notes. In order for them to be able to weather the fickle winds of change in the industry, Barajas believes SMEs have to see flexibility as a must have quality. A peculiarity Epicor has perceived is that many such companies are family owned, and there are instances where the original founders are set in their ways and prefer to follow an outdated methodology. “Local companies sticking to their traditional roots can actually be an advantage for Epicor,” says Barajas. “Most of these companies want their information to be presented in a clear, visual, and concise way. This is possible since the core technology and software of the company remains unchanged, the only variable is how information flows.”

The software provides a classic electronic data interchange (EDI) connectivity, which can control a wide spectrum of factors ranging from demand to supply chain management. This solution applies to both market segments, as it allows companies to track how many items they have shipped and control each machine in terms of what it will be producing and its running time. “In terms of supply chain management, the system notifies the company’s supplier when raw materials are needed. This in turn creates just- in-time operations,” says Barajas. “This can then ease the transition toward lean manufacturing. Even if the company already has modern equipment, this can be easily connected to the PLC systems and then controlled. The information is online regardless of the equipment running in the sites, so our contribution brings easily applicable, high-tech solutions.”

The biggest hurdle Epicor and SMEs both have to overcome during the sales process is cost. Barajas believes mid-sized companies willing to invest in technological tools often look to big corporations. “They see the millions invested in software and, as a result, believe it is out of their reach. To overcome this entry barrier, Epicor offers financing options to customers so they do not have to provide all the money upfront,” Barajas explains. Epicor notes that customers sometimes do not necessarily focus on the cost of buying the software but on the ongoing cost of running the software. “To keep costs further down, we manage all professional services within our sphere, covering software support, maintenance, and development.” To encourage maintenance, the company has an annual support and upgrade subscription. First year customers are asked to subscribe as most questions arise during this period, but a subscription becomes optional for the second year on. “90% of our customers renew their subscription in order to maintain their software,” Barajas states.

Finally, Epicor feels that the biggest hurdle that is yet to be fully overcome is Mexico’s low broadband penetration. While the company’s express and cloud solutions put SMEs on the right track, the varying Internet connection speed across Mexico is the biggest deterrent for Epicor to seal deals with small companies. But Barajas sees a silver lining. “The telecommunications reform will encourage competition in Mexico that should lead to better communication services over time.” For the company, it is without doubt that the Mexican government is making an effort in helping the automation and productivity of SMEs. “The government is now stepping in and helping companies obtain certification, financing, machinery, and equipment through different funds and programs” says Barajas. As the Mexican government puts forth financing solutions that encourage the investment in new technologies, Epicor is also benefitting from the financing scheme from the Secretary of Economy that will in turn further support the technological rise of Mexican based companies.