ERP for the agile business: Innovations in mobility, business intelligence and cloud computing
November 7, 2011 by Jonathan Gross
Whether businesses like it or not, they have to be agile to succeed. If managing extreme economic volatility wasn’t challenging enough, businesses also have to contend with shifts caused by natural disasters (e.g., the Japanese supply disruption), faster cycles of technological innovation and obsolescence, and structural shifts in the labour market.
Modern ERP systems provide businesses with significant opportunities to become more nimble. How? By providing the ability to close gaps at all levels of business — with their customers, with their suppliers and among their various departments. Many of the most notable — and recent — innovations in ERP are materializing in the areas of mobility, business intelligence and cloud computing.
Mobility – Enterprise access any time, any place
With many legacy ERP systems, users can typically only access a centralized system two ways: through a computer that’s connected to the internal network and through a virtual private network (VPN). The problem, of course, is that these options are overly restrictive relative to today’s needs. Travelling salespeople, for example, can no longer wait until the end of a business trip to enter sales orders. In today’s hyper-competitive, just-in-time world, these types of delays — whether measured in terms of days or weeks — might mean the difference between won and lost business.
The mobility features in many modern ERP systems help minimize those delays by making the enterprise accessible from almost anywhere. In many cases, all a user needs is a smartphone and an Internet connection.
Let’s go back to our earlier example and assume that our travelling salesperson has access to ERP features that allows him to place an order via his smartphone. Once the prospect has executed the contract, the salesperson can enter the order via a mobile app on his smartphone. This can trigger automated processes that ripple through the entire organization, including the cutting of work orders and purchase orders. In other words, it offers the company an opportunity to reduce the amount of time it takes to process an order.
With the amount of work that’s now being done remotely — whether as a result of travel or home-based workforce scenarios — many companies are finding it imperative that they give their users anytime, anyplace access. The realities of the business world are causing many companies to push mobility-related features from the “wish list” category to the “must have” category.
Business intelligence – Timely analytics for better decision-making
Business intelligence is another area that offers opportunities for improved agility. Many companies that operate legacy systems often have to wait until the end of certain periods to see budgets, forecasts and results. These reporting periods can be monthly, quarterly or even semi-annually.
In today’s business climate, leaders don’t have the luxury of being able to wait weeks or months for analysis. And, even if they did, volatile market conditions might render projections based on stale data virtually meaningless. Consider, for example, a situation where a VP of sales is asked to approve pricing for a new sales order. Let’s also assume that the pricing needs to support a certain margin. With the high volatility of raw material and freight costs, the VP of sales needs current data to make an informed pricing decision.
Modern business intelligence applications can give this VP of sales an opportunity to review the near real-time, accurate insights he requires to establish an appropriate price. These applications allow timely and relevant data to be extracted from far-reaching corners of an ERP database, as well as from external sources. Of equal importance is the trend to make analysis and report generation user-friendly. This allows companies to push the power of analytics to their end-users. In other words, it gives them an opportunity to eliminate an extra layer of IT support — and the associated time — that was historically required to generate a new report.
Cloud computing – Reduced infrastructure constraints and scalability on-demand
Finally, a conversation on modern ERP and business agility wouldn’t be complete without a discussion of cloud computing.
If companies want to use technological innovation as a springboard to make themselves more agile, the barriers to adopting those innovations need to be low. And cloud computing can help lower those barriers.
Unlike traditional on-premise software, cloud computing offers companies an opportunity to unshackle themselves from depreciating hardware, software and infrastructure that they used to need to run their ERP systems. Under the old regime, companies would plan to invest in a particular software and hardware set for 10 years. During this period of ownership, they’d have no choice but to watch certain ERP innovations pass them by.
Cloud computing allows companies to significantly minimize the cumbersome technology and infrastructure constraints that were historically required. Nowadays, businesses can reap the benefits of ERP without the heavy investment in servers, storage rooms, infrastructure and IT maintenance staff.
Another benefit of cloud computing relates to scalability. True cloud is delivered on-demand, meaning that companies can scale up or down usage on an as-needed basis, without human intervention. In effect, this gives a company the chance to modify its ERP requirements as soon as the business conditions demand change. In contrast, on-premise capacity is generally determined by pre-defined contractual obligations. If companies want to add users in an on-premise environment, they would typically have to get a hold of their sales representative, purchase additional rights and, oftentimes, negotiate new terms.
Notwithstanding the above, companies should do their due diligence on whether cloud in general — or a specific cloud offering in particular — is appropriate for their business. For example, the process of tailoring or customizing cloud ERP systems is generally more cumbersome when compared to its on-premise cousin. This should be an important consideration because most companies will find that even the best-fitting ERP system will be incapable of supporting all of their key requirements.
Finally, it’s worth paying lip-service to oft-cited cloud concerns relating to data security and reliability. In general, ERP vendors have far more sophisticated and well-developed practices than the end-user companies. However, in my experience, companies’ concerns aren’t about real probabilities and risks of breaches or service interruptions. Rather, they’re about giving up control over mission-critical systems and data. My advice to these companies: do appropriate due diligence on security, privacy and reliability. Let the analysis guide your decision.
In the final analysis, ERP software innovations in mobility, business intelligence and cloud are giving companies opportunities to become more nimble than ever. However, selecting the right innovations and the right vendor for your business is the tricky part. To succeed in those endeavors, businesses should take the time to truly understand their needs, as well as how the various vendors propose to satisfy those needs.
Jonathan Gross is vice-president of Pemeco, Inc., a consulting firm specializing in ERP selection and implementation. He can be reached at firstname.lastname@example.org.