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Epicor ERP sheds stodgy image in cloud makeover

At Epicor Analyst Day, Epicor customers described how the company has transformed into a cloud-first industry-focused ERP company, while still supporting on-premises deployments.

A few years ago, Epicor was considered a bit of an also-ran in the ERP market.

Epicor ERP was largely built by acquiring legacy on-premises products with deep industry functionality and aimed at small to midmarket companies.

These products -- including Epicor ERP for general functionality, Prophet 21 for distribution and logistics, and BisTrack for building materials management -- were seen by some customers and industry observers as being stuck in an on-premises past.

But in 2018, Epicor began a cloud-based modernization makeover. First, it standardized its on-premises legacy product portfolio as multi-tenant SaaS products on Microsoft Azure, then modernized the UI and rebranded the flagship Epicor ERP as Epicor Kinetic.

The company has also added new capabilities that can be deployed across the Epicor product portfolio, including e-commerce and configure, price and quote (CPQ) visualization with the acquisition of KBMax this year.

The changes have helped Epicor shed its stodgy image, according to customers and analysts at its recent Epicor Analyst Day in Boston. And they may have come at just the right time, as the COVID-19 pandemic forced manufacturers -- particularly, midmarket companies in the industry verticals that Epicor serves -- to rethink their ERP strategy.

Panel at the Epicor Analyst Day event in Boston.
(l-r) Nicholas Mueller of Enjet Aero, Tessa Kalarickal of Coghlin Companies, Chris Brackett of C.W. Hayden Co. Inc., and Lisa Pope of Epicor speak at the recent Epicor Analyst Day in Boston.

Epicor cloud ERP unifies multiple facilities

Enjet Aero, based in Overland Park, Kan., recently implemented a cloud Epicor ERP system in order to unite its six facilities under one system.

The aerospace and defense systems manufacturer has grown by acquisition, and the cloud makes it easier to integrate new companies into the ERP system, according to Nicholas Mueller, Enjet Aero director of ERP systems.

"The move to cloud has been strategic for us because of our acquisition strategy," Mueller said at the analyst day event. "We don't have a large IT infrastructure. We try to keep our HQ organization lean, so we have a smaller IT staff and they had to deal with several layers of network security. By moving to the cloud, we're actually flipping companies that we've acquired to our Epicor system before we even get them off of their old systems. It was a game changer for us."

The disruption of the aerospace manufacturing industry -- first, with the groundings of the Boeing 737 Max airliners and, then, with the COVID-19 pandemic -- slowed Enjet Aero's business considerably, Mueller said, but the company used the opportunity to retrench with its cloud ERP upgrade.

"We needed to make ourselves better, so we invested in ourselves, rather than sitting around and waiting for it," he said. "We used that time of slowness to build our company to be adaptive for the coming growth -- and that has come -- so it allowed us to be on the front end of that. We've made two acquisitions since the pandemic, and our growth pattern is continuing."

Moving to the cloud is enabling Enjet Aero to standardize processes across its manufacturing sites, Mueller explained.

"We try to run as vanilla as we can and, now, we're working on standardization -- getting our plants to talk the exact same and doing their processes the same," he said. "Before, we did a lot of standardization of the back office and let operations run their way. But we found that by helping them standardize that and the communication between the sites, we've improved our output to our customers."

Dealing with pandemic-related market changes

Going to the cloud has helped C.W. Hayden Co. Inc., deal with the changes brought on by the COVID-19 pandemic.

In early 2020, the small industrial supply and distribution company based in Auburn, Maine, was in the process of moving its long-standing Epicor Prophet 21 ERP system to the cloud, according to Chris Brackett, vice president of operations and general manager at C.W. Hayden.

"We paused the process because of the unknown of what was going to happen next. But a few months into it, we realized that we were going to be OK and we turned the process back on," he said. "We got rolling and went live just in time, because about two weeks after we went cloud-based, we went completely remote for our entire office staff."

All of the ERP vendors -- Epicor, Acumatica, Infor -- are putting more and more into the vertical industry segments because they have to, because it's not cookie-cutter.
Laurie McCabeCo-founder and partner, SMB Group

At the same time, a customer that makes COVID-19 test kits saw demand explode overnight, and C.W. Hayden's business with the manufacturer went from a few hundred thousand dollars a year to more than one million a month, Brackett said.

"With all of us being remote, we couldn't sit there and talk amongst the group. But being cloud-based allowed us to access the systems, work with our suppliers and ramp up the raw materials that we were supplying to them overnight," he said. "Then it died overnight, but it's starting back up again. So, we've been able to use the data to try and forecast the anticipated usage going forward."

As a small business, C.W. Hayden is not rolling in IT resources, so migrating its ERP to the cloud has also helped in areas like security, Brackett explained.

"We deal with a lot of smaller manufacturers, and a large chunk were having issues with hackers and ransomware," he said. "It hasn't happened to us yet, so going cloud-based really made our ERP system more secure for us than it would have been if we kept it on premises."

Epicor's investment in modernizing its ERP products, including Prophet 21, was a key factor in C.W. Hayden's decision to stick with the system when it moved to the cloud, Brackett said.

When the upgrade discussions began a few years ago, C.W. Hayden debated switching ERP systems because it seemed, at the time, that Prophet 21 was not a priority for Epicor, he said.

"Then, about five years ago, we noticed that it seemed like a light switch had gone on, and there were some changes that we liked, and it's snowballed since then," Brackett said.

For example, one advantage of being on Epicor now is that customers can add capabilities to ERP applications. C.W. Hayden implemented Epicor Eagle e-commerce because it became increasingly important to have online sales during the pandemic. The company is also starting to use Epicor Data Analytics (EDA) to improve business intelligence.

"It's easier for bigger companies that can throw 10 or more data scientists at the analytical data to try and figure things out, but that's tough for smaller companies," Brackett said. "EDA is going to allow for us, as a smaller company, to get a much better grasp of where we're at and help us do a better job of buying, pricing, various things like that."

Not everyone's going to the cloud

But not all Epicor ERP customers are ready for the cloud, and the vendor professes to be more than happy to support whatever decision works best for them.

Coghlin Companies, a make-to-order contract manufacturer in Westborough, Mass., stayed with an on-premises deployment when it decided to upgrade its Epicor ERP system.

Coghlin has two main verticals: capital equipment and medical devices; the latter of the two made a cloud move complicated, according to Tessa Kalarickal, director of business systems at Coghlin Companies.

"Currently, we are evaluating an upgrade, so we looked at going to the cloud with Epicor software," Kalarickal said.

However, because software used by medical device manufacturers needs to be validated against international standards, going to cloud software can be complicated, as the software needs to be validated every time a SaaS system is updated, she said.

"Because these systems need to be validated, we have decided to remain on premises at this point, but we will look at it again," Kalarickal said.

Coghlin is a long-time Epicor ERP user, but when it began to evaluate an upgrade and possible cloud move, it decided to also look at other ERP systems such as the cloud-native Acumatica, according to Kalarickal.

The company decided to stay with Epicor primarily because of new capabilities that helped Coghlin pivot from manufacturing one of kind medical device that fell out of favor due to the pandemic for another, she said.

"When the pandemic started, it affected our medical device manufacturing business more than our other business," Kalarickal said. "We are in optics and laser medical devices, and we saw a shift in that market, but we stepped in and started building ventilators, so we were able to adapt and move into the ventilator market for the time being."

An image makeover for Epicor ERP

Epicor's transition out of its legacy on-premises past has been largely successful, analysts said.

Epicor has transformed its core products and is now offering new functionality like e-commerce and the CPQ visualization tool it added with the acquisition of KBMax, said Laurie McCabe, co-founder and partner at SMB Group, an enterprise computing research and consulting firm in Boston.

"Epicor has always had a good focus on the verticals that they're in," McCabe said. "They weren't the first to the party with the cloud, but it seems to me, based on the customer input, that they've really turned the corner there."

Two years ago, nobody was thinking of Epicor as a cloud ERP vendor. ... But, now, they are getting there and they're also getting into some larger deals.
Predrag JakovljevicPrincipal analyst, Technology Evaluation Centers

The vertical focus is important because that's what customers are demanding today, she said, particularly the small to midmarket enterprises that Epicor serves.

"All of the ERP vendors -- Epicor, Acumatica, Infor -- are putting more and more into the vertical industry segments because they have to, because it's not cookie-cutter," McCabe said. "It's way different to be a distributor than a professional services company, and there are even differences within those subverticals."

Epicor has likely benefited from the pandemic, as many of their customers operate in verticals, like distribution and lumber, that have historically been seen as technical laggards, said Predrag Jakovljevic, principal analyst at Technology Evaluation Centers, an enterprise industry analysis firm in Longueuil, Quebec.

"They had products for those industries that were functional but difficult to use. But all of a sudden, these became essential businesses, so that gave them a shot in the arm," Jakovljevic said. "They were able to take some technology from the manufacturing ERP product and add it to the old products like Prophet 21, so it now has that ease-of-use and cloud capabilities."

After the rebrand, Epicor is finally getting recognition as a cloud vendor, he said.

"Two years ago, nobody was thinking of Epicor as a cloud ERP vendor," Jakovljevic said. "It was NetSuite, Acumatica, Microsoft Dynamics. But, now, they are getting there and they're also getting into some larger deals."

Epicor is not the same old Epicor anymore, agreed Cindy Jutras, president of Mint Jutras, an enterprise systems research and advisory firm in Windham, N.H.

"Even though they had changed quite a bit, there were still pockets within the organization that acted as if it was an old-style ERP company," Jutras said. "They've turned the corner on that, and COVID might have helped them to do that, because it forced the remote work and it forced them to sell differently and support differently. Because you couldn't just go out and show up on someone's doorstep, they had to rethink the sales process, which they probably should have done a few years ago."

Jim O'Donnell is a TechTarget news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.

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