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Epicor rides Southeast Asia manufacturing boom

Midmarket ERP software supplier capitalising on growing investments by Chinese and local manufacturing firms in region to drive business

The expansion of Chinese manufacturers into Southeast Asia, coupled with the growth of local manufacturing in markets such as Indonesia, has been fuelling Epicor’s growth in the region.

The mid-market, manufacturing-focused enterprise resource planning (ERP) software provider has seen its regional business increase by “several hundred percent” in the past seven years, according to Vincent Tang, its vice-president for Asia.

“We see better growth in Southeast Asia compared to North Asia, be it Vietnam, Thailand or Indonesia,” he added.

The company’s software is used by makers of industry machinery, automotive parts and electronic components, among others.

Its local customers include an Indonesian industrial gas producer that recently switched to Epicor from a major ERP software provider. After a successful first phase involving 500 concurrent users, the customer expanded their Epicor implementation to an additional 200 users.

Tang observed a trend of companies transitioning from “tier-one” ERP offerings from giants such as SAP and Oracle to Epicor, adding that this often occurs when businesses realise they are paying high-maintenance costs without fully utilising their software’s capabilities.

“They believed that just because Fortune 500 companies were using those tier-one solutions, they would become a Fortune 500 company,” he said. “That’s not always the case, and when economic conditions tighten, they start questioning if they should continue paying high maintenance costs and only use a certain percentage of the software’s functionality.”

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Tang claimed that the cost of Epicor’s software is “reasonable”, with annual maintenance costs ranging from a quarter to a third of what one would pay for a tier-one ERP offering.

Beyond cost-effectiveness, Epicor’s strength lies in its focus on manufacturing customers. The software offers best-practice templates and configuration options, ensuring a good fit for customer needs and shortening implementation time.

Tang also emphasised the benefits of Epicor’s longstanding partnership with Microsoft. This collaboration allows Epicor to host its applications in Azure cloud regions across Asia and leverage Microsoft technologies such as SQL Server and .NET.

While a majority of Epicor customers currently utilise on-premise deployments, the company has seen the proportion of its revenue from cloud growing from 10% eight years ago to 45% in the first quarter of this year. “Although we remain committed to offering deployment choices, we see a growing customer preference for cloud solutions,” he said.

This trend is fuelled by the increasing stability and security of cloud offerings, coupled with a growing awareness that on-premise deployments are not inherently more secure.

Tang shared an anecdote of an Indonesian customer who hesitated for nine months before migrating their on-premise Epicor implementation to the cloud – until their system was hacked.

“Their data was in a mess, forcing them to spend two weeks cleaning up and restoring their systems,” he said. “It was a painful experience that ultimately convinced them to embrace the cloud.”

Raising awareness

To further expand its market presence, Epicor is partnering with manufacturing industry associations to organise marketing events and raise awareness of its offerings.

The company also collaborates with local universities to train students on Epicor software. By equipping students with ERP knowledge before graduation, they can contribute more effectively to businesses when they enter the manufacturing workforce, said Tang.

Southeast Asia is rapidly emerging as a global manufacturing hub, driven by manufacturers seeking to diversify their global supply chains.

Beyond attracting investments from Chinese companies facing rising costs at home, the region has also drawn global powerhouses such as Intel and Foxconn, which are ramping up their manufacturing activities in markets such as Malaysia and Vietnam.

Read more on Enterprise resource planning (ERP) software

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