Cloud Computing: SaaS ERP Revs Up Auto Parts Supplier
Auto parts supplier Inteva Products opted for a cloud-based SaaS ERP solution over a $15 million SAP project.
Fri, September 09, 2011
CIO — When auto parts supplier Inteva Products LLC spun out from its parent company Delphi in 2008, CIO Dennis Hodges was left standing in a heap of legacy ERP equipment.
Inteva's global manufacturing facilities, engineering sites and Troy, Mich.-based headquarters were each running multiple stand-alone servers. As Hodges explains, "the servers were anywhere from five to eight years old and difficult to keep running and patched."
It was a critical juncture for the fledgling company, which creates closure, interior and roof systems. Its 8,000 workers in 18 countries depend upon data from the ERP system, so it's choice came down to becoming entrenched in a $15 million SAP in-house infrastructure project or head to the cloud.
"We didn't inherit any of our parent company's IT staff and would have to hire an entire infrastructure and application support team. We made the logical choice and chose the cloud," he says.
It's a move that Hodges says has saved Inteva 25 percent vs. the cost of an on-premise upgrade and infrastructure overhaul.
Hodges admits it was an interesting sell to corporate executives. "While moving to virtualized servers was fairly mature at that time, moving to a cloud-based ERP system was not," he says. He argued the positives, including a flat monthly fee, no need to upgrade, and always being on the newest version of the application.
Executives had concerns regarding the performance and security of software-as-a-service as well as disaster recovery plans. Hodges made it a point in his search for a service provider to home in on those two points.
His quest led him to Plex System's Plex Online Cloud ERP service, which is targeted at, among other industries, manufacturing.
While not as complex as his previous SAP installation, Plex Online does enable companies to track orders through engineering, procurement, production, shipping, accounting and other critical stages. The service also monitors and reports on project costs and offers engineering controls for parts and bills of material.
To start with the migration from the legacy ERP system, Inteva and Plex migrated Inteva's master data as well as some transactional data. They also worked together to study business processes so they could be replicated in the new service.
Inteva opted for a phased-in approach vs. a big bang, gathering feedback from each site's deployment to use on the next go-live. "Rather than integrating thousands of suppliers at once, we did small chunks so we could test and use what we learned to improve," he says.