Manufacturers Must Adapt to Address the New Financial Frontier
The manufacturing sector is rife with tools and technologies, but our new survey results indicate it’s the sector that has the most to gain in retooling to address the new financial operations frontier.
The 2015 research, commissioned by Epicor Software and conducted by Redshift Research Ltd., is based on interviews conducted with more than 1,500 finance business professionals in 11 countries, who may or may not be using Epicor ERP solutions. Nearly two-fifths of respondents worked in the manufacturing industry.
CFOs in the manufacturing/engineering sector were the most likely to have a basic/legacy financial IT infrastructure and a high necessity to rely on instinct for decision making, as well as pressure-motivated leadership (a belief that tough targets and tight deadlines bring the best results).
David Axson managing director, Accenture, has written extensively on the topic of CFO challenges within the manufacturing sector and how they can help their organizations compete more effectively. In an article published in Industryweek, Axson says manufacturing organizations with good visibility, supported by strong analytics capabilities, are in a good position to support profitable growth.
“CFOs at manufacturing companies face significant challenges in terms of getting their companies on track for sustained, profitable growth. Ironically, many of these challenges stem from the rapid adoption of powerful and disruptive digital technologies in core areas such as manufacturing, customer and supply chain management.”
He emphasizes, “Innovative technologies are reshaping the traditional relationship between finance and operations,” and that “the successful finance organizations that we have studied invest in tools and technologies that can help them to more accurately forecast performance, identify risk and opportunities, and then adjust their investment decision-making accordingly.”
Epicor ERP has always placed a strong emphasis on financials and integration of financial management to other key ERP capabilities.
An October 2014 Aberdeen report speaks to the challenges that face the modern manufacturing environment – such as unpredictable demand and complexity of data – and illustrates how Leading manufacturers make ERP a foundation for efficiency, effectiveness, and growth. According to report author industry analyst Nick Castellina, Leaders saw a 12% improvement in operating margins as a result of ERP.
Castellina also argues that solid ERP functionality helps manufacturers more effectively address the unforeseen. “Leaders use ERP to provide visibility, collaboration, and decision-making. There are a variety of capabilities enabled by ERP that help manufacturers to become more effective. For example, Leaders are 208% more likely to be able to perform a mock or real recall.”
Given the emphasis of continuous improvement in the manufacturing sector, it’s high time manufacturers retool to support improved performance and financial operations.