Manufacturing & Logistics IT spoke to a number of experts from the vendor community about recent shifts within the world of ERP – including those related to Mobility and the Cloud. We also consider what the main spurs for these developments have been, and what further ERP innovation could be headed our way in the near future.
Since our last Special Technology Report on Enterprise Resource Planning (ERP) in March 2011 things have moved apace in terms of scope of functionality, increased adaptability and ease of deployment. But they are also joining the Mobility party – making it even easier to access the information needed quickly in the field or on the shopfloor on mobile devices – whether they be tablet PCs, laptops or even smartphones. And the influence of the Cloud is also beginning to gain traction in the ERP space, having gained much ground in related IT areas – including Customer Relationship Management (CRM) – in the recent past. Then the question needs to be asked: what has been the impact of Big Data and social networking on the ERP world? All these issues and more are surveyed in this report. So, to begin, let’s take a high-end view of some of the key current talking points.
Jonathan Orme, sales operations & marketing manager at Exel Computer Systems, comments that there is a trend for extending ERP out into every area within the enterprise and then out into the extended enterprise; especially the increasingly mobile workforce. “For example, you can now have your engineers and your sales team directly accessing the business system from smartphones and tablets, and you can have this all from a single supplier, rather than having to join systems together,” he said.
Orme adds that the benefits to the end user are the ability to do business as and where they are, and in a much quicker time frame – often in real time. “If the mobile sales/service engineer has access to all the live business data when with the customer, business decisions can be taken there and then in full confidence,” he commented. “In the same way, by being able to push live data out to the mobile sales/service engineering workforce, they can have access to the latest customer information which helps deliver the most tailored levels of service.”
Kevin Bull, product strategy director at Columbus, makes the point that the provision of tools that provide access and – more importantly deliver insight – into the wealth of business data in an ERP system have long been ‘hot topics’ for users of legacy ERP systems. “Most managers would agree that the value of Business Intelligence (BI) is difficult to underestimate,” he said. “However, BI tools have traditionally been complicated to deploy, requiring an in-depth understanding of the structure of the underlying data and therefore requiring costly consultancy services. The initial cost of these tools has also been high.” Furthermore, Bull adds that it is usually also necessary to provide end users with a level of training before they can use them. “The end result? – BI tools are provided to a handful of users in the business and covering a small section of business information, usually sales analysis only,” he said.
Bull explains that Microsoft has a different approach to Business Intelligence. “In Dynamics AX all users (subject to security restrictions) are provided with access to a complete suite of pre-defined measures and indicators with coverage across all aspects of the system. Users are able to create security-enhanced reports using drag-and-drop report authoring, and display key performance indicators (KPIs) directly in a management dashboard style view (called Role Centres).”
Steve Tattum, product manager, Sage ERP X3, points to the need to accelerate productivity through Business Intelligence/Analytics, and the need to deliver outcomes for customers; not just a ‘toolbox’. He elaborates: “When CRM was first mooted it was really a toolbox that you could do all sorts of things with, but you often had to become an expert in these sets of tools. You had to understand how your data was actually held in the system and then try to translate that into usable information. One of the big trends we’re seeing at the moment is that companies don’t want to invest in toolboxes and go on courses to learn how to use these tools; what they actually want is outcomes. So they’re looking for pre-packaged Analytics, dashboards etc. and enough flexibility in the tools to be able to adapt them easily for their own requirement. Therefore, the end game is all about focusing on the benefits to the end-user.”
Phil Lewis, business consulting director at Infor, observes that many current approaches to innovation are focused on enhancing ERP core solutions with tools to improve efficiency and decision making for end-users. “Social Enterprise, Mobility and Contextual Analytics are amongst today’s key technologies, which are changing the way work gets done in today’s enterprises,” he said. Lewis adds that Social Enterprise takes the mechanisms seen in the world of consumer IT and brings it into the workplace. “Some vendors are just delivering a messaging engine within the realms of their ERP,” he points out. “Other vendors, such as Infor, are delivering true social business which is in-context to the people, applications, machines, data and documents used in all enterprises. This approach brings context to every social post, and users can use the context to drill back to the important detail.”
According to Lewis, Mobility is now at the forefront of enterprise technologies. With today’s advancements in Cloud and connectivity, he believes there is an opportunity to develop applications for mobile devices which extend the workspace of the user. “Enterprise users should be able to participate in business processes and gain access to the information they need, whether they are in the office or on the road, and irrespective of the device they choose to use; desktop, laptop, tablet or smartphone,” said Lewis. He also believes that Analytics and Business Intelligence are moving into a new era, where these top-end reporting technologies provide value to all members of the enterprise, not just managers, key decision makers, strategists etc. “Today’s analytical reporting solutions are now giving end-users more and more intelligence exactly when and where they need it,” he said. “Some vendors are even delivering dynamic Analytics to the desktop, which are completely in context to what the user is doing in the enterprise application at that point in time.”
Melissa Cook, senior director & global manufacturing industries lead for Microsoft Dynamics, considers that one of the key talking points at the moment is usability. “ERP systems by their nature tend to impact upon most people in your business,” she said. “Having a straightforward, easy to use application is critical and can save businesses a lot of money in training and retraining staff. ERP systems also need to be a lot more agile and capable of keeping pace with the needs of a business as it changes and evolves.”
Cook added that another key talking point is to do with making an ERP system as engaging as possible. “One point here is about making more interesting user information; I’m talking about graphical displays not just data displays that we’re used to in standard ERP systems. It is also important to make the information useful in context of the users and their individual roles; so they don’t have to go looking for the information that they need – rather, the system should actually surface the information that they need in the context of who they are and what they’re trying to do at any one moment.”
Drivers for change
What has driven these changes in the ERP world? With regard to the developments in Mobility,Orme believes this has been driven by the huge growth in web-enabled mobile devices, the underlying communications infrastructure, the ability of the latest generation of ERP to take advantage of the flexibility and connectivity of the latest smart phones/tablets. He adds that alongside this has been the seismic shift in people’s expectations of what they can do while mobile.
Cook points out that traditional ERP systems were only systems of record. “They had very limited capabilities and could only present back the impact of your business,” she said. “There was a need to be far more forward thinking and allow businesses to take action based on the data. A good ERP system should show organisations what they need to do to improve their business and make it simple to action through integration with other applications.” She continued: “The younger generation is coming into the workforce with all its technology knowledge in the consumer space, and Microsoft understands this consumerisation of IT. Users’ expectations of what they going to get at work have dramatically changed, so the power of Microsoft is we’ve got our fingers and all those pies – personal productivity and office productivity. This is in our DNA, and where we’ve made a lot of investment over the past 10 years.”
Bull explains that studies that have been conducted about the implementation of ERP systems within a business show a surprising statistic; only a fraction of the employees actual touch and use the ERP system. “In a rapidly changing world it is becoming increasingly difficult to differentiate between competitors based on product alone – so it is the employees that have increasingly add value to the customer in terms of service and performance,” he said. According to Bull, employees need to have insight into information to be able to identify where an opportunity exists – be it an opportunity to decrease costs, to improve service or to provide a different offering to the customer.
Tattum makes the point that there has been a lot of ERP consolidation within companies that have grown significantly by acquisition. “These companies often find they are running multiple systems of different ages and abilities across their satellite businesses. They often carry on imposing these central Tier 1 systems on them whether they like it or not. But one size doesn’t fit all. We are now seeing the need to put in place a Tier 2 ERP strategy where companies can choose a mid-market solution potentially that is of better size and fit for their smaller businesses; a system that’s easier to deploy, one that offers faster results and still has the capability of providing all the various types of information in the right format – SKUs, general ledgers etc. The smaller business can have just as much complexity as a larger business, but probably doesn’t have the same army of people to run the system. So the ERP has to be pretty agile.”
User productivity is also a key driver for change, according to Tattum. “RoleTailored design is a key component to improve user productivity in Sage ERP X3. At Sage, we believe that the key to helping businesses become more agile and productive in a global economy is to empower individual workers by giving them the information and flexible tools that improve efficiency, and enable them to focus on the highest-value work. Sage ERP X3 and Sage Visual Processes is an excellent example of this.”
Lewis considers that end-user expectations relating to enterprise software are now being set by how they use technology at home, in their free time. “Consumer IT – such as social networking and social media, web applications, Cloud services and subscriptions etc. – are driving software vendors to deliver software tools for the workplace which allow people to work the way they live,” he said. “Social and Mobile, for instance, are prime examples of where the consumer world has directly influenced the enterprise software arena, resulting in a new breed of enterprise applications and tools.”
Other trends
As regards other trends and changes in the world of ERP, Orme explains that Service Management has become a central area of interest for Exel, as manufacturers look to take Product Lifecycle Management seriously. “Service and repair costs are increasingly taken into account by customers, so manufacturers need to be able to demonstrate a commitment to this as well as accurately control costs and ensure timely delivery,” he said.
Bull reflects that the burden of compliance on manufacturing business is growing daily. “Adherence to business practices is coming under increased scrutiny and audit, while at the same time new environmental directives are becoming prevalent; including REACH, WEEE and RoHS,” he said. “Customers too are becoming increasingly demanding, requiring evidence of adherence to best environmental practices; including adherence with ISO 14001.” Bull explained that Compliance Management in Microsoft Dynamics AX helps simplify compliance with one central location for viewing, managing, and controlling business process content, internal controls, and reporting. “The Compliance Centre provides easy access to all compliance-related information and activities, and helps keep business information secure with a comprehensive set of tools to manage and control sensitive data and critical KPIs,” he said. “The user can view graphs representing the efficiency and effectiveness of internal controls, manage action items from alerts or workflow, and add links to important external compliance sites.”
Tattum considers that, in terms of Enterprise Asset Management, it’s not just about physical assets existing in the financial ledgers and managing their value depreciation; somebody needs to service, upgrade and maintain them. He adds that in some territories there are different rules about depreciation methods according to the value and type of asset. “So actually it’s no longer just an asset register and journal for depreciation; it can be quite complex,” he said. “Many ERP solutions don’t have that degree of functionality. Built into the assets module, Sage ERP X3 has a fully-fledged, comprehensive asset module, which is fully multi-legislation multi-company, and it’s therefore straightforward to have all the extensions into asset management.”
Tattum also focused on the ‘green’ agenda, making the point that this is not just important from an environmental responsibility perspective, but also something that makes commercial sense insofar as it can save energy costs and reduce paper usage for businesses. In this regard, he comments that ‘green’ is starting to be felt in the ERP world. Tattum explains that Sage ERP X3 has a partnership with Verteego, a French-based company that specialises in carbon measurement and in REACH compliance. “What we’re seeing increasingly is the need to comply with standards like REACH,” he said.
Lewis reflects that there seems to be a change of direction occurring among enterprises towards the selection of industry-specific applications, as opposed to generic ‘one size fits all’ monolithic solutions. Infor, for example, is delivering industry-specific, loosely coupled application suites, made up of an industry-specific ERP core application surrounded with best-in-class applications, which customers can select as required.
Lewis provides the detail: “The entire suite is pre-integrated using Infor ION, Infor’s information management platform, which provides standards-based integration, process management and data management capabilities. The portfolio of best-in-class applications covers the spectrum of industry requirements, including: Asset Management, Supply Chain Management, Corporate Performance Management, Product Lifecycle Management, Human Capital Management. Customer can chose the elements of the suite they need in the business, and have confidence that they will be delivered as a single solution, without the traditional costs involved with a multi-application integration project. Infor products are delivered with the ability to integrate via ION as standard. They have been developed to publish and subscribe to the OAGIS standard formatted business documents, which are routed and controlled by ION.”
Cook comments that, given the current economic climate, businesses are required to be more accountable than ever before. “Unsurprisingly then, compliance and auditability have leaped to the top of the business agenda,” she said. “Businesses need to make sure they are as transparent as possible and that everything they do is compliant with industry specific regulations. Improvements in Business Intelligence have helped in this regard, giving organisations a helicopter view of everything that is happening across their organisation.”
Integration development
Have ways of best integrating ERP with other systems developed to any notable degree in the recent past?InTattum’s view the importance of Customer Relationship Management (CRM) as a key means of delivering exceptional customer experience cannot be underestimated. He therefore believes that having this fully integrated into the back-office ERP system is a winning formula. But it’s not just about the Sales and Marketing experience, in his view. “Perhaps even more important is the after sales and service element as this drives customer satisfaction, recommendations and repeat and new business,” he said. Tattum adds that Field Service, WMS, SCM etc. continue to be treated as ‘Best of Breed’ solutions by customers and suppliers alike (existing systems in many cases), but the increasing prevalence of web-based and web-enabled solutions has eased the integration challenge through the use of Web Services.
Cook maintains that integration is key and was one of the focus areas Microsoft had when developing its latest version of Dynamics ERP. “A good ERP system should integrate seamlessly with your existing technology and allow users to make the most of their existing assets,” she said. “We have also been able to extend Dynamics ERP’s core capabilities through deep integration with Office and other Microsoft applications. Customers can easily take action, whether that’s by sending an email through Outlook or exporting data into Excel. They can more easily collaborate with colleagues through integrated Sharepoint and Lync capabilities and use Business Intelligence to make sense of the data.”
Orme comments that Open architecture ERP by definition offers a higher level of integration than older systems reliant on cumbersome middleware were capable of. “It remains our view however, that where you have different systems from different vendors, there is always the considerable potential for ‘buck passing’ when things go wrong,” he said. “And while vendor A is blaming vendor B or vice versa, the customer is left with a problem that is not being addressed. As Exel supplies a fully integrated system, if there’s ever a problem anywhere, our customers know who to come to in order to get it resolved. Our job is easier because we’re not having to try and liaise with third-party companies who may or may not be as keen to resolve the situation.”
Lewis observes that the structure of the Internet is now forming a template for how integrated applications should be delivered. “Standards-based, loosely-coupled and asynchronous integration should become the de facto approach, and offers far more agility and flexibility when compared to the traditional point-to-point approaches of the past,” he said. Lewis adds that Infor’s integration platform, Infor ION, takes a unique approach to business software integration that includes enough breadth and flexibility to support integration services, Cloud services, mobile services, and advanced reporting services within a single framework. “Rather than trying to ‘bolt’ multiple applications together with clumsy point-to-point database integrations, Infor ION Connect enables each application to transmit and receive small OAGIS formatted XML documents, called Business Object Documents (BODs), into the ION Connect framework,” explained Lewis. “Each application can ‘subscribe’ to the BODs that relate to its task and ignore all others. In that way every application gets access to business-critical information without being slowed down by information that only applies to the work of a different application.”
Bull has witnessed that, with the proliferation of tablet and smartphone devices, we live in an ‘app-centric’ world where we have got used to being able to use any gadget to gain access to things such as e-mail and social media. “And it’s the same with ERP,” he said. “Employees expect to be able to simply download an app and go look their sales figures, see where their next site visit is, report a service fault, and so on.” Bull adds that theyounger generation arevery app centric and expect to be able to download apps for just about anything. He believes this expectation is increasingly coming to the fore in the workplace as well; not just in terms of Microsoft products but also third-party products where a developer has sought the opportunity to connect to AX and made an approved app available for download from the online store.
Going mobile
And returning to the Mobility theme in more depth, has the increased trend for the integration of mobile/field service devices with back-office ERP systems provided improved business and operational benefits for the end user?In addition to his earlier comments concerning Open architecture and the way it offers a higher level of integration than older systems reliant on middleware, etc., Orme adds that vendors such as Exel who are at the forefront of mobile ERP cover the entirety of mobile workforce needs; from CRM, Call Management & Scheduling, Transport/Route Planning, Stocks/Spares Management etc. “Again, it’s this completeness of service which manufacturers are increasingly wanting,” he said.
For Bull, the primary benefits from deploying ERP-connected mobile devices are reduced costs through better use of employees, increased revenue through live up-sell and cross-sell activities and improved cash flow by allowing invoices to be generated sooner. Something that is a little harder to evaluate, in Bull’s view, is the increase in customer service levels.
In Cook’s view, the key is allowing users to use whichever device they feel most comfortable using at any given time. She adds that the rise of Bring Your Own Device (BYOD) means this may not be a business-owned field device, but rather the individual’s privately owned tablet or smartphone. “Dynamics ERP provides users with a platform for a range of different devices and access to the information they need in whatever way suits them,” she said. Cook also observes that the manufacturing industry is starting to look closely at Mobility. “Of course, manufacturing’s been looking at mobility in a lot of places – sales force automation, especially the front-end retail etc. – but where they have made more recent strides is in mobility on the shop floor. Microsoft’s vision as a device and services company is to take our stack and our DNA about personal and office productivity and bring it to the manufacturing worker. I’m very excited about what the opportunities are here. It’s going to include devices and it’s going to include functionality tied to the role of people that are actually working in manufacturing, not sitting in an office.”
Lewis again stresses that Mobility is changing the way that people work and utilise information in the field. “The consumer world is influencing people’s expectations of how, when and where to access information, and indeed, the richness of the information available,” he said. Lewis also makes the point that field service employees have had the luxury of mobile access for some time now, although the information they have had access to has been somewhat limited; just enough to process the required transaction. “Today’s approach to Mobility is aiming for information without boundaries,” he remarked. “The ability to work from a mobile device – be it a laptop, tablet or even smartphone – should not be compromised. The innovation surrounding Mobility is set to continue, especially when more user interfaces convert to HTML5. This will provide the required coding platform for transportable, device independent user interfaces, which will run across devices. Couple this with advancements in Cloud technologies and the robustness of fibre networks, and the future looks bright, the future looks mobile.”
For Tattum, the key benefits of Mobility are efficiency, speed of response, holistic 360 degree views and information at the user’s fingertips. “The ideal is ‘one conjoined system’ eliminating duplication and providing ‘one truth’,” he said, adding: “Information has to be fully integrated across the entire piece. The majority of business mobile users are in sales & marketing, and they want to have real-time access to current information from the back-office system concerning estimates, product availability and pricing when they’re in front of the customer.”
The SaaS/Cloud effect
Has the Software as a Service (SaaS) model, and the Cloud concept in general, had any notable level of impact on the ERP market so far?In Orme’s experience, there is a lot of talk among vendors with a vested interest in this, and while Exel software can be operated in a hosted/Cloud environment – and it has some customers doing this currently – most are still wanting to operate using the on-premises model.
Cook reflects that it has improved the level of choice that Microsoft Dynamics can offer customers. “It has allowed us to extend the application beyond its core functionality and build in elements to meet individual business requirements,” she said. “But we can also offer customers more flexibility over how the solution is hosted dependent on their requirements.” Cook’s view is that it is all about offering customers choice. “Cloud computing is an exciting area, but it won’t be right for everyone, at least not in the short term,” she said. “We want to offer customers the best of all worlds and provide them with a solution that suits their business requirements.”
Lewis maintains that the journey towards the Cloud is well under way, with software vendors enabling applications for the Cloud “at a considerable rate of knots”. However, he adds that the customer community is not as focused on the shift to the Cloud. “Cloud enablement is now a common requirement on many user requirement documents, but often only out of interest,” he said. “The current trend seems to be that if it’s a peripheral application or service – such as CRM or Expense Management – then that’s OK; a bit like dipping a toe in the ocean. But, deploying core ERP solutions in the Cloud is still met with an element of caution. This caution will turn to confidence in time as the Cloud becomes a key technology, which is taken for granted.” Lewis points out that many Infor customers use the SaaS model as a proof of concept vehicle, where they can run their business processes in a Cloud deployment before bringing the complete live environment in-house, on-premise. “This just goes to show the huge levels of choice and flexibility customers now have. They can decide how and where to deploy software, in line with corporate requirements and direction.”
Bull’s perception is that Cloud storage, although it is increasingly penetrating home and personal lives, has yet to gain significant tractions in the world of business systems. However, he believes it is on the verge of becoming something much bigger. “In the near-future it will be important that ERP systems are capable of being deployed completely Cloud-hosted and as hybrid model – where some elements may be hosted for cost-effectiveness and other elements retained for perceived security,” he said.
Tattum has witnessed a slow Cloud adoption within the world of ERP systems so far, although he points out that Sage is definitely seeing prospects interested in this deployment model, and observes that businesses have become much better informed over the past 12 to 18 months. He considers that most of the benefits customers seek are delivered in hosted or hybrid solutions with SaaS. Tattum also makes the point that come companies see Cloud as an opportunity to cut back or discard their IT staff. However, he stresses that very few customers, particularly ERP (non-service) businesses can eliminate the need for their IT support teams who maintain PLCs, complex plant equipment, scanners, printers, barcode printers etc. And in terms of Internet performance, Tattum comments that this is not as global as users might wish, and can it can be expensive to secure high reliability and high bandwidth for all sites.
Tattum has also seen a trend for people to say ‘why do we have to become experts in running, upgrading and patching your software – can’t you do it all for us?’ There are other changing user expectations too, in his view: “We now have a new generation of users that are totally computer literate due to their experience with consumer games and mobile devices, so they may not expect to be tied to a desk using an old-fashioned desktop necessarily,” he said, Tattum also pointed out that things such as packaged information BI/Analytics reporting tailored to a role with the access control is already in place, which helps deliver a fast user adoption experience easier.
Upgrade or replace?
Is there still a case for updating/upgrading legacy ERP, or is it better to ‘rip and replace’?This depends on the nature of the ERP, believes Orme. “We have many happy customers who have been using EFACS for 10 to 20 years and they of course periodically need to update their system,” he said. “Even when those customers look at it as a system selection exercise as opposed to an upgrade, we find many times they choose to stay with EFACS and upgrade because they value the relationship with us as a supplier because it’s tried and tested.”
However, adds Orme, with some legacy ERP systems, not only are you looking at a huge lack in functionality, you are also looking at data that has cumulative accuracy issues and invariably a whole host of workarounds. “And at the end of the day, many SMEs don’t have dedicated IT departments to oversee this process and many SMEs cannot afford any level of disruption to their day to day running of the business,” he said. “In such cases, it is often less disruptive to rip and replace. It’s the same where companies also have other aging legacy systems that also need replacing – here it can be much more effective to do the implementation in one hit, albeit a well-managed hit.”
Continuing the upgrade or replace theme, Cook considers that it depends on the individual situation. “In some instances it is better to ‘rip and replace’ but often this carries with it greater risk; especially in cases where the legacy system is more than 15 to 20 years old,” she said. “Businesses change year-on-year, so it is wise to be constantly assessing your technology requirements to make sure they are aligned to your business needs, and updating your systems accordingly. In most cases this will be easier than looking to ‘rip and replace’ every 5 to 10 years.”
Bull’s view is that the decision to upgrade should be primarily focus on the business benefit that can be delivered. “The business benefit might be increased functionality or it may be more of a technical nature – the ability to integrate to other systems, the ability to be deployed on mobile devices, the ability to deliver better business intelligence and so on,” he commented.
Tattum believes the upgrade or replace question revolves around three key factors:
- Is the existing system (including updates) supportable (both by the customer and supplier)?
- Does it meet current needs and is it flexible/extendable for future needs?
- What additional benefits will a new system bring versus the time, cost and pain to implement it?
Lewis considers that rip-and-replace approach should not be the ‘top of the list’ strategy for companies, although he recognises that it is sometimes the only viable option, due to modified and bespoke ERP solutions that could be restricting the business. “This must be the worst-case scenario,” he says, “and if considered, lessons must be learnt so as not to end up in the same situation with a new product. An industry-specific approach removes the modification risk, as the product is designed to do the job as standard. This is not something that a generic solution can ever provide.” Lewis added that vendors need to do more to help customers upgrade and migrate to later versions of product. He maintains that there are 2 key areas where things can be improved; putting industry-specific functionality into the product rather than modifying a generic solution, and using modern technology to ease the process of upgrading.
Lewis also makes the point that modern technologies focused around the Cloud can play a key role in providing a reduced risk upgrade path from an old version of a product to the latest version. “The Cloud can be used to host sandbox versions of software at the latest version, then use ION as a bridging platform, enabling clients to run side-by-side environments, and move functionality and process from old to new,” he said. “Ultimately, this gives a mechanism to seamlessly migrate to the latest version on a step-by-step basis. The leap from old to new can sometimes seem like a huge jump, whereas the side-by-side approach promotes a small steps to the new world solution.”
Tattum recommends that users rip and replace if 1) the current system is unsupportable or 2) it cannot meet needs, or 3) the benefits outweigh costs.
Big Data
How can technology trends such as Big Data help to gain the best out of ERP systems?Lewis believes Big Data will be taken to new heights once properly managed within the Cloud. “The ability to process huge amounts of data in the Cloud, via a resource (CPU and Memory) on demand approach, will lead to new and improved information, analysis and strategic reporting,” he said. Lewis then gave his views on the benefits of the Infor ION Business Vault. “Every message that ION processes from participating applications is also saved in a single, optimised business repository called the Business Vault. By providing a secure reservoir for past transaction data, ION gives you an easy way to mine your data for more flexible, powerful reporting, business intelligence, and analytics.” Lewis added that users will also have:
- Easier search. When data resides in one place, there’s no need to index your transactional systems.
- Better reporting. The Business Vault features a master data reference to ensure that your data is always consistent and relevant across your entire organisation.
- Up-to-date data. The Business Vault uses event-driven synchronisation to ensure that data is up-to-date as soon as each transaction occurs in the originating system.
Bull observes that you often have to visit the IT department to find people who have heard of the term Big Data, but nevertheless the concept is widely recognised, even if people haven’t heard the term. He adds that modern Business Intelligence tools, which in some instance are embedded deep in ERP systems, are now capable of making it easy to join business data with external data, such as demographics, climate and market conditions. “This allows the business to not only identify what has happened in the business, but also allows them to identify the reasons why,” he said. “The increasing availability of web sources, or ‘data-marts’, for external data is driving the way forward in this regard. For example, a business can now choose to connect their sales history details by locality with regionalised weather records.”
Tattum believes that while Big Data might not a central consideration in ERP today, the ERP world is already utilising Intelligent Analytics with predefined keyword and ‘rule searches’ to auto-create Statistical Reporting extracts for increased performance related to user queries. “The challenge is real-time or near-real-time information delivery, which is one of the defining characteristics of Big Data Analytics. Latency is therefore avoided whenever and wherever possible.”
Cook points out that the rise of Big Data means that users’ ERP systems are no longer the only data silo relevant to their organisation. “Businesses should be making use of the wealth of information that exists externally,” she said. “To make the most of the opportunity you need a platform that can aggregate those different data sets and help you to make sense of the information that is relevant to your organisation.”
Differentiators
What are some of the main functionality differentiators among the ERP vendor community?Orme remarks that while vendors may make all manner of claims about their functionality, the reality is that Exel often sees manufacturers who tell us that any number of systems could meet their needs from a functionality perspective. “And in those cases, they look to more long-term relationship issues with the vendor, such as where the vendor is based (UK versus US), whether the vendor is a reseller or author, the size and fit of the vendor and manufacturer,” he said. “And at the end of the day, often with ERP it’s not what it does, but how it does it in relation to everything else. Systems like EFACS have been designed from the outset to be fully integrated whereas some systems have essentially evolved over time with different aspects of functionality tacked on.”
Cook comments that, rather than differentiation being an issue of functionality, Microsoft Dynamics thinks it is more about where vendors’ industry focuses are. “We have a strong heritage across a number of varied industry sectors,” she said. “It is important to understand the pressures that are unique to each sector, how businesses in those sectors operate and their approach to market. Without that level of understanding, you won’t be able to provide them with a solution that fits.”
Steve Tattum believes functionality differentiators are relatively few as vendors seek to broaden their offering by development, acquisition and partnering. “The Devil lies in the detail,” he said, “so vendors’ ability to deliver a common business application module across multiple countries and legislations – and to deliver this in a short timescale and to agreed budget – is paramount.”
Bull makes the point that most modern ERP systems have rich and extensive levels of functionality that have been developed over time. However, he adds that not all of these systems have the ability to be deployed in a way that is flexible and agile. “Businesses change and adapt to market conditions or they fall by the wayside,” he said. “And having a system that is able to react to change – easily and effectively – means that opportunities can be quickly responded to and business advantage achieved.”
Phil Lewis considers that the differentiation debate mainly revolves around monolith software versus loosely coupled suites; generic software versus industry-specific software; one-size-fits-all versus dedicated applications for a particular industry sector; and ‘jet planes versus cheese production. Like some of our other commentators, he also references the influence of the consumer world and the impact of Social Business, which is rewiring the way people create, consume and share information.
Possible future trends
What might be the next key developments to look out for over the next year or two? Bull believes fully Cloud-hosted solutions are on their way, with the ERP authors able to host the systems on the Internet for a business, or to have the system hosted by hosting partners or to operate in a hybrid manner with a mix of elements being managed in different ways. He also believes integration and cooperation with social media services such as Facebook and Twitter will make their way into the new releases of the most visionary ERP systems. “A simple example of social media integration might include allowing sales campaigns and promotions to be communicated to prospective customers, offering discount vouchers and processes to redeem them,” he said. “A more complex example might be the identification of negative product coverage and reacting to this with managed communications.”
In addition, Bull points to the extended availability of ERP apps for a wide variety of device platforms as another trend to watch, as is also the case with increasing power and complexity in Business Intelligence tools – not only in the trending of historic data but also in the delivery of predictive information that is based on a wide variety of factors both internal and external to the business.
Lewis’s view is that most innovations will continue to be based on today’s key technologies – Social, Mobile and Cloud. He also references Big-Data as something that will continue to get attention, especially the ability to ‘number crunch’ far more raw data than ever before, due to the on-demand resources capability of the Cloud. “This will provide organisations with far more meaningful analytical results based on massive amounts of raw data, something that was unachievable in the past,” he said. Lewis also anticipates that user expectations will continue to shape the way enterprise application vendors deliver functionality and experiences. He adds that the consumer world will continue to set the way for how people use software.
Orme considers that in the near future there will be the continuing evolution and innovation in the type of devices that people will use to access data in their ERP system. “Whether it’s more sophisticated tablets and smartphones, to more intuitive touchscreens on the production floor, getting accurate data into and out of the system will become simpler and more important in maintaining competitive advantage,” he said. “This will facilitate the ongoing streamlining of existing business processes to enable manufacturers to remain leaner, more agile and more responsive to customer need.”
Cook explains that Microsoft Dynamics is very focused on usability and is in the process of developing a new user interface. She adds that Microsoft Dynamics is also looking at how better to deploy its services through the Cloud. “Everything we do will build on our experience of working with all types of businesses across a broad range of sectors, to ensure that we can provide a solution that is tailored to suit the needs of individual businesses,” she said.
Cook added that ERPs are in transition. We believe we are leading the way with Dynamics because it’s a much more modern architecture,” she said, adding that the market transition is about moving ERP away from the monolithic, slow, expensive, and inflexible representation and into a representation that is about enablement and innovation for manufacturers. “And to enable innovation it has to be able to surface the most relevant information up to all the workers within manufacturing,” said Cook. “In this way, everyone can be engaged in improving processes and product.”
Tattum reflects we are now in the third generation of ERP. He elaborates: “All vendors did a good job and automated nearly all transactional processes. People spend their time in managing exceptions and pursuing opportunities using tools other than their ERP system. The new generation of ‘digital native’ users has joined businesses. Their world is Web 2.0 tools, user communities, social networks, mobile working, dashboards etc. ERP systems must become more user-centric and relevant to all types of users in the enterprise, rather than continuing to focus on the traditional enterprise users.” He adds that a modern business solution taking full advantage of the three Cs of Cloud, Collaboration techniques and Communities can help business reach the fourth C of ultimate Connectivity.
As a final word of advice, Orme suggests that users to see any ERP investment as a business decision first and an IT decision second. “You’ve got to think it through in terms of how it will affect every element of the company and then you need to involve every element of the company,” he said, concluding: “Make sure you’re 100 per cent convinced before you commit. If you’ve any doubts, talk them through with your prospective vendor. If you’re not entirely put at ease, walk away. The relationship is key, so why start with anything other than complete assurance you’re dealing with the right people?”
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