ENTERPRISE RESOURCE PLANNING SOFTWARE IS GETTING MORE EFFICIENT AS IT MOVES TO THE CLOUD

If you have postponed implementing Enterprise Resource Planning (ERP) software, waiting for costs to come down, your patience may now be rewarded.

ERP suites are increasingly being offered in the cloud, making their acquisition, implementation and upgrading much more affordable and efficient.

“What we call post-modern ERP has brought about a more dynamic change in the ERP landscape than we’ve seen in the last 20 years,” says Carol Hardcastle, a research analyst at information technology (IT) provider Gartner.

“Moving to cloud-based platforms drives huge levels of efficiencies,” adds Shanton Wilcox, vice president of the Supply-Chain Practice at Capgemini, a French-based IT company. “It has allowed midsize and small companies to take advantage of advanced ERP solutions at a much lower operating cost.”

Traditional ERP systems combine functions such as manufacturing planning with financial reporting, human resources and order management. “Nowadays, we define ERP as a technology strategy,” says Hardcastle. “It’s a set of business functions and not a singular technology.”

ERP systems still include core elements such as financial reporting and human resources but then diverge to support companies in different sectors such as manufacturing or distribution. “Some ERPs are best suited for specific industry segments,” says Wilcox. “You have to evaluate which is best for your organization.”

Companies also have the opportunity to pick and choose functionality from multiple vendors, a process which has been facilitated by the move to the cloud. “Traditional ERP implementations involved picking a vendor and implementing that vendor’s suite,” says Hardcastle. “These days, companies can implement specialized modules from different vendors that best suit their needs.” This can be accomplished, in the case of cloud implementations, by integrators called cloud-service brokers.

Many smaller companies will continue to opt for a single-vendor approach, according to Wilcox, because of the ease of implementation. “One vendor means a single data model,” he says. “Multiple vendors create challenges in getting data from one part of ERP to another.”

Exporters need their core ERP to communicate with trade management and logistics solutions. “The easier and quicker you can get data from one system to another, the quicker and more efficient your cross-border shipments are going to be,” says Wilcox. On the other hand, some companies may require more sophisticated trade-management functionality than is available in their core ERP.
In general, ERP promotes efficiencies within businesses by automating business processes. “Suppliers get paid automatically,” says Wilcox. “You don’t have to touch the invoice and that promotes efficiency from a labor perspective. Consolidating data within ERP means you get a single version of the truth. You don’t have to spend time and effort pulling data from different sources and trying to align them. You can use that data to understand how the business is performing and where to make improvements.”

“Companies are using data to provide insights to themselves and their customers,” adds Hardcastle. “The promise of post-modern ERP is to process and use data in real time.”