Broadening horizons- ERP Special Technology Report - March 2017

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Manufacturing & Logistics IT spoke to a number of experts from the vendor and analyst communities about recent trends and ongoing areas of development within the world of ERP – including those concerning integration, Cloud/SaaS and Big Data.

The Enterprise Resource Planning (ERP) landscape has changed substantially in recent times, and this momentum shows no signs of slowing down. To get the discussion started in terms of some of the key areas of development and debate within this all-important technology space, Evan Quinn, principal director – marketing, QAD, made the point that innovations such as Cloud, Big Data/advanced analytics, Internet of Things (IoT) and modernised, mobile user experiences have been hot subjects over the past few years in ERP.

However, he added that perhaps we have put the cart before the horse. "At least in the manufacturing sector, there are plenty of companies stuck in the death spiral of ERP – that is, stuck in an old version because of unwanted but apparently necessary custom code, poor data quality or misunderstood data, and inflexible processes," he said. "Getting rid of the old and moving to the new ERP takes discipline, training and a willingness to think differently about the notion of ERP."

Quinn added that, historically, ERP has been a monolith. He elaborated: "Today, given the incredible rate of change in essentially all global industries, ERP must be flexible. It must interoperate, extend and integrate with little effort – for the needs ERP addresses today are out of date tomorrow. Thinking of ERP more as a platform that includes core processes and data but can be extended securely to address customer last mile needs is where ERP is headed."

Quinn believes that depth will beat breadth long-term in ERP. "Some of the larger ERP providers are throwing all kinds of technologies, an array of technology widgets and kitchen sinks, into their portfolio," he remarked. "They have forgotten about the most important fundamental of ERP, which is having ERP that matches and flexes to your business. Too many ERP solutions lack the feature depth for a given vertical industry, and those ERP purveyors seem bent on developing beautiful demo ware and not addressing customers' needs. Pushing into industry-specific and even sub-segment specific capabilities is what ERP needs. Those vendors paying real attention, not just lip service, to vertical depth will survive and thrive long-term."

Opening up ERP

Michiel Schipperus, CEO, Sana Commerce, explained that Sana Commerce looks at the ERP space from an e-commerce vendor's perspective, and what the company sees is user organisations and vendors seeking to open up the ERP much more widely across the organisation. "This is really driving increased value from what is already a very valuable but underutilised tool," he said, adding: "ERP is really on the cusp of giving more decision-making power to people across the business, rather than just being something used by a handful of people in the back office or supply chain. After a long time in the shadows its true potential is finally being unlocked."

The role of Cloud ERP ecosystems

Schipperus believes much of this ERP transformation is down to the creation of broader Cloud-based ecosystems with ERP at their core. "It's become much easier for valuable add-ons, including e-commerce, to be developed in-sync and integrated with ERP systems – 'feeding' off its rich data for the business' gain," he said. Schipperus also made the point that mobile development and use of apps based on ERP data is expanding, which is furthering the opportunity to put this valuable data in the form of business intelligence and insight in the hands of wider ranging people when they need it to make important decisions.

Merging worlds

Schipperus added that, from Sana Commerce's perspective, the worlds of e-commerce and ERP are also merging together. "Some ERP systems are expanding into these areas, realising that they can become more to organisations as a combined offering," he explained. "As e-commerce becomes much more important to businesses too, it makes more sense for vendors to offer both. "For years, ERP has been the vital backbone and over time many third-party applications – including ours – have integrated with it. Now that we're seeing the market move to Cloud and development ecosystems being created vendors like us on the periphery of ERP can do even more to develop really intuitive tools and help customers extract more and more value from their ERP."

Digital transformation

Schipperus considers that more digital business being done also means more use of digital technologies; whether that is new employee processes, supply chain collaboration or sales channels to customers. "All of these new digital processes and digital transformations are absolutely interwoven with ERP data," he said. "Access to the ERP is about driving all stakeholders to have maximum control. Employees need to be more productive through access to information and processing power, customers want a more personalised and tailored 'journey' and so on."

ERP in the customers' hands

Schipperus believes that, ultimately – and although they don't know it – customers should be leveraging the data within the system instead of duplicating it and trying keep two sources of truth, which is not sustainable. "With the necessary apps and user-friendly interfaces, certainly in a B2B setting the ERP can become a customer facing tool. Give customers more choice, in line with what they need, and build loyalty. Give customers more information, make them more in control of the buying process and you can remove pressure internally in the organisation."

Movers, shakers and partners

Schipperus explained that Sana Commerce partners with Microsoft and SAP, and is seeing both these vendors really invest in the Cloud and develop partner-based philosophies around development of tools that hook into the ERP. "They're really empowering partners like us to get the maximum out of their ERP solutions, through their ecosystems hosted on Cloud platforms like Azure, where you're collaborating and sharing tools to build systems really closely knitted with these ERP platforms," said Schipperus. "Take Cortana with Microsoft for example. It's a great function to have within an e-commerce system and being part of the Azure platform we're able to look at building tools like this into our own systems.

"Think how fast technology is changing. Empowering their agile ERP partners is a really smart way for these vendors to stay ahead of the game. They remain focused on the powerful ERP core and their customers take advantage of a growing network of tools to shape how they drive ERP value."

David Titterington, account manager, Prodware, commented that end users are always looking for ways to reduce administrative burdens and the time it takes to switch tasks. "There has more an increase in the demand for fully integrated applications, so that users don't waste time switching between tasks and applications," he said. "For example, within Microsoft Dynamics 365, Power BI which was is an integrated but standalone application has now been embedded into each application, ensuring users have all the tools to complete their daily tasks in a timely manner."

According to Titterington, there has also been an increase in the demand for mobile applications in the business context, with the ability to work from where-ever you are. "Work and home life are now integrating further without the once clearly defined boundaries," he said. "This means employees expect more from technology at work and true mobility within ERP applications is key to this."

Brendan Read, senior industry analyst – digital transformation, Frost & Sullivan, commented that companies now expect simplified architectures from their ERP systems that can be readily upgraded and/or changed to evolve without consultant and vendor assistance. "They are looking for ERP products that reduce complexity and manual tasks to permit smarter working, and also to help managers make faster and more effective decisions," he said.

Internet of Things – a game changer

According to Read, companies are looking for ERP tools that will allow them to efficiently tap the Internet of Things. "IoT is a game changer for ERP as well as for CRM systems in that it supplies real-time usage data from connected devices," he said. "IoT systems manage product replenishment, including with data as granular as when specific product types were consumed, service; and support, alerting users of potential issues; and by providing wear-and-tear patterns that could help with procuring parts, scheduling repair personnel, to make design, manufacturing, and service improvements. IoT usage data permits companies to provide highly targeted and hopefully successful offers to customers that will result in fewer returns and greater satisfaction."

However, Read added that IoT complicates the supply chain when there are complex products and multiple vendors involved. "Customers want the vendor who they transacted with to manage their entire purchase," he said. "Sellers have to organise their vendor partners."

Stuart Hall, sales director, Epicor Software UK and Ireland, said that with new trends such as IoT, 3D printing, robotics and increased automation in the manufacturing sector, he is seeing ERP solutions continually evolve in order to keep pace. "In 2017, expect to see more applications that analyse business data collected from various sources to offer business insight," he said. "Applications will be able to support improved collaboration and facilitate data access through responsive interfaces. In addition, artificial intelligence (AI) and advanced analytics will transform business applications, making them even more predictive and prescriptive."

Hall explained that Epicor is also continuing to see ERP systems extend to the Cloud. According the Hall, these systems will eventually become Cloud only (Software-as-a-Service or SaaS-based), or available as a hybrid solution. In addition to being a cost-effective solution, Hall commented that a SaaS model provides great flexibility and access to data at any time from any location. "Businesses of all sizes are transitioning their infrastructure and data ecosystems into the Cloud to minimise the burden of upgrades and management; freeing up valuable resources to focus on innovation and business growth," said Hall.

Nick Castellina, vice president and Research Group director, Aberdeen Group's Business Planning and Execution practice, commented that the Cloud continues to be an important part of the ERP conversation, pointing out that over the years, he has witnessed an increasing number of organisations switching to a Cloud solution for their next deployment rather than an on-premise solution. Another area of development highlighted by Castellina is the verticalisation of ERP, where many ERP vendors are building solutions that are now better suited to more tailored industries. "There is now greater maturation of functionality when it comes to individual industries' use of ERP, he said.

Castellina added that there is also a lot of talk about Industry 4.0 and how ERP can be used to support that technology. Additionally, he explained that there is much discussion around the Internet of Things and desire to have one complete source of information for automating a manufacturing organisation from end to end. Castellina also observes that there is a lot of focus on usability, cleanliness, the ability to do more with data and the ability for end users to consume that data more effectively.

Phil Lewis, vice president, solution consulting EMEA, Infor, made the point that ERP has seen incredible change and progress recently. "Cloud has become table stakes, although we do continue to see some customer requirements for on-premise deployment as well," he said, adding: "Gone are the days when customers will endure three-year implementations which go out of budget."

Lewis explained that Infor is continuing to see strong demand for specific last-mile industry functionality 'out of the box' as nobody wants customisations. "The importance of consumer-grade interfaces (and the attendant improvement in productivity, and therefore competitive edge) also continues to drive a lot of interest," he said. Lewis added that what Infor's prior focus on integration (with the likes of Infor ION) has now evolved into is a reflection that the company sees the future of businesses not just within the four walls of the company but across the Network of suppliers and partners.

Growth development

One trend that has re-emerged, according to Lewis, is the use of ERP to help develop growth. "Forward-looking manufacturers are paving the way to increased capacity and reinforcing the infrastructure to manage larger volumes," he said. "Investing in modern ERP solutions helps manufacturers identify growth opportunities and take action to seize those opportunities and capitalise on them quickly. First, advanced analytics help spot trends in markets, including upward swings in regions or among target markets or new products. Once upward trends are spotted, changes can be made to enhance the product line, expand into new regions or focus greater attention on a target market in order to tap into the potential. Because modern software promotes efficiency and increases productivity, manufacturers can often increase output in these new areas, without adding headcount."

Andy Brown, SCS divisional leader, Access Group, stated that when it comes to ERP, the one thing that today's end users care most about is having access to information in real time so they can make better decisions. "To make the most of this data you'll need great business intelligence tools, and increasingly also the ability to manage and analyse Big Data," he said. "From a production and planning perspective, it will mean having robust processes in place to capture data on the shop floor."

According to Brown, the ability of applications and machines to share data – often referred to as Industry 4.0 – has become central to this process. "With manufacturing frequently outsourced, ERP systems need to be able to talk to live machines, analyse constraints and track any operating malfunctions so that production planners can arrange for delivery times to be altered or supplies of materials redirected," Brown pointed out. "The same applies to labour capacity; they have to be able to identify bottlenecks and predict shortages if they are going to meet their OTIF {On Time & In Full} promise."

James Speer, strategic alliance director, Capgmini UK, commented that organisations with an existing on-premise ERP solution (this might include or touch other areas such as finance, supply chain or HR) – SAP and Oracle e-business Suite, for example – maybe looking to upgrade, and using this as a justification to move into the Cloud. "These organisations have two main options; they can re-implement with SaaS or they can do a 'lift and shift'," he explained. For organisations looking to move to SaaS, Speer believes it is important to understand that although SaaS can be configured, it cannot be 'customised'. "These organisations have to consider how they can move from a heavily customised ERP into a vanilla SaaS ERP, which inevitably involves a higher degree of business change," he said.

Shashi Subramanian, management consultant, Capgemini, commented that companies looking for an alternative ERP model should ask themselves where they are in terms of their innovation and differentiation activities and goals, and how they can best ensure that they can continue to do that in the future. "So, they need to determine whether the best option would be to move into the private Cloud or move to a SaaS service," he said. "If companies want to constantly innovate and differentiate then it could sometimes restrict their ability to do this if they move to a SaaS model. This is definitely worth bearing in mind."

Subramanian made the point that there is a high level of competition among the vendor community and constant improvements are being made within their core platforms. "Part of the conversation is about which elements of functionality requirement should become part of these platforms," he said, adding that the advantage of staying vanilla to some extent is that users are able to take advantage of those developments in a slightly easier fashion than if they heavily customise.

Speer added that, for organisations who want the benefit of the public Cloud while also retaining all of the familiarity of the product that they are already using – including the customisations they have made – a 'lift and shift' may be the best way forward. "We are seeing a number of SAP customers move onto Amazon Web Services," he said. "As far as the end-user is concerned, it is still SAP offering the same user experience and all the customisations that may have been made to SAP. However, what is largely invisible to the end-user is that SAP is running on Amazon Web Services, which can provide a much lower total cost of ownership and other benefits."

Chris Devault, manager of software selection, Panorama Consulting Solutions, made the point that software publishers are driving the current push towards Cloud applications. "Major players in the industry such as Oracle, Microsoft, Epicor and Infor are combining typical on-premise ERP system functionality into one platform that will eventually be their solution for all industries," he said. "Vendors are looking to reduce the overall entry cost of software and by implementing out-of-the-box best practices they are attempting to drive down implementation costs and duration."

Pat Phelan, research VP, Gartner, made the point that postmodern ERP strategies offer more ways to satisfy business needs with greater agility and flexibility. Yet, she stressed that postmodern ERP is not easy. "The greater number of options creates challenges that many IT enterprises have not focused on in the last decade or more," said Phelan. "One of the most significant is integration — not just application integration but the management of data and process integrity. As postmodern ERP becomes pervasive, many enterprises will face increasing complexity, risk and cost that they had not foreseen and are not equipped to deal with."

According to Phelan, enterprises must become more flexible and agile to seize business moments. "Traditional ERP approaches are no longer tenable to meet the pressures to support increasingly dynamic business needs as digital business models evolve," she said. "All ERP initiatives are now postmodern ERP initiatives as a result of the market forces that have transformed the traditional ERP world. A well-defined ERP strategy that responds to the disruptive challenges created by changes in the business strategy is key to success with postmodern ERP initiatives. A business-owned ERP strategy is crucial to properly evaluate and select the right solutions and services from the many options available before launching deployment activities. ERP investments are long term, so after implementation it is equally important to manage and govern the ongoing operation and evolution of the solutions to meet new and changing needs – always with the goal of optimising business outcomes."

Integration

Have ways of best integrating ERP with other systems developed to any notable degree over the past year or two? Schipperus believes the key challenge is integrating, not interfacing, with ERP. He commented: "There's no doubt that integration between ERP and a widening range of other systems is absolutely vital. What's in question is the quality and type of integration being used in many cases. We call this the difference between interfacing and integration. Interfacing involves extracting data out of the ERP system to use within other tools or for analysis.

However, this is limiting in that you're missing the value of the ERP's full data set. It's also dangerous in that it creates duplicate data and logic which can quickly become difficult to maintain and out of date. You're creating extra work essentially. True integration is where the integrated tools are actually driving within the ERP. They're plugged into them and using the processing and logic within the core system. Nothing is extracted, copied or duplicated; all activity occurs within the ERP, utilising its true value and ensuring the best possible information is available."

Single stack approach

Schipperus added that, whether within one system or tightly integrated separate systems, Sana is seeing more customers wanting a single stack approach to e-commerce. "This is becoming imperative and is why we're working so closely with our ERP partners Microsoft and SAP to deliver a single solution," he said.

Castellina commented that the goal of an ERP strategy is really to have a one-stop shop for all of the data users need within their business from end to end. "So, either micro-vertical type functionality is being built into the ERP system, or users are being told by the vendor that their ERP system can effectively integrate with the point solutions they require; solutions that are maybe more robust than those that are contained within the ERP solution that they have purchased."

Castellina added that some ERP vendors can only take users so far when it comes to, for example, warehouse management, where it might be deemed necessary to look to an additional solution to help beef-up the user's IT capability. "But the goal is to still retain that one source of information," he said.

Read has observed that companies and vendors are looking to deeply integrate their ERP solutions with other adjoining applications, such as CRM and CPQ (configure, price, quote). "They want single and actionable view of their business processes," he remarked.

Quinn pointed out that the well-designed, document and flexible API is what has changed in the realm of integration, extensibility and interoperability for ERP. "Integrating ERP solutions not using modernised APIs is like using a hammer to drive in a tack," he said, adding that Cloud integration, like Dell Boomi, has also changed the game.

Flexibility, relevance and cost-effectiveness

Titterington explained that Prodware sees a lot of third-party products acting as connectors between applications bringing together detached systems. "Of course, it has become increasingly important to provide your workforce with a consistent user interface and experience in order to increase productivity and collaboration between teams," he said. "With Microsoft Dynamics 365 users can purchase individual role based applications which integrate seamlessly with each other using a Common Data Model. So, businesses get flexibility, relevance and cost-effectiveness."

Devault commented that major ERP vendors continue to enhance out-of-the-box capability by developing new functionality within their systems, channel partners also are continuously developing enhancement functionality for their clients. "Some IP from channel partners does make it into enhancements when/where appropriate," he said. "Vendors are also assessing and acquiring third-party products that are proven in the market place, embedding these solutions into their ERP."

Lewis remarked that integration – and the user experience of the integrated system – now needs to be seamless. He added: "Tools such as Infor Ming.le that take the user through applications that all contribute to the completion of a task, across disparate groups of people and can even take data from applications or machines themselves – mean that integration under the hood has to be world-class. But even more important is that it must be invisible to the end user and that the integration should allow a smooth journey to task completion regardless of the systems involved. It is this interface/experience that has seen the most progress."

Constant improvement

Subramanian made the point that many ERP companies are investing in the next wave of both capability and architecture. He commented: "They are on that journey so not all parts of their solutions are currently as refined as they would like. There are a number of leading players in the complementary solutions marketplace; warehouse management solution providers such as Manhattan Associates and JDA, for example. These companies are also constantly improving their solutions and the functionality on offer. Then, there is of course the conversation about how ERP and WMS solutions etc. can integrate together. For the most part, there are now many instances of these different types of systems integrating well together. Some challenges still remain but in general integration is improving all the time."

Speer said that within the context of integration, the whole concept of digital transformation is important to consider. He commented: "In the case of organisations who claim to have a digital transformation agenda and strategy, the conservative or less visionary organisations often tend to think about this more in terms of some sort of veneer customer experience solution that maybe allows them to do both B2B and B2C business through typical channels such as mobile and the web. I think the more forward-thinking organisations need to look at digital transformation much more holistically; not just in terms of breadth but also in terms of depth. This means going right down into the back office and the mission-critical systems of record; including ERP.

"This means that whether you're an employee, whether you're a customer or whether you're a business partner you have that real-time joined-up integrated experience across any channel anytime anyplace anywhere. For that to happen, organisations need a solid platform that links all these different systems; including ERP. For instance, if you are a utility company and you are embarking on an IoT (Internet of Things) strategy how do you consolidate and aggregate that data in a way that doesn't overwhelm the ERP but at the same time gives recent meter readings? Similarly, if you're an employee how do you get access to pay slips on your mobile phone if you're out of the field as soon as they are available – given that ERP is often buried deep down in the business.

"I think the main point here is making sure that each of these mission-critical systems of record, including the ERP, are integrated with the rest of the business in the most efficient way to enable these types of scenarios."

Information sharing through a single solution

Andy Briggs, technical director, BEC (Systems Integration) Ltd., commented that the better ERPs try to address all of the business needs in terms of putting together various operational or application strands such as CRM, Sales & Marketing Management, Enterprise Asset Management, WMS, Supply Chain and Service & Maintenance – i.e. putting together different systems that may have been separate systems with integration links into one common environment. In this way, said Briggs, all the information can be shared across the business through one solution rather than many. "The better ERPs are achieving this by having a common architecture upon which all of these modules are built," continued Briggs. "This is called 'Service-Oriented Architecture.' – the platform that brings all of these parts together as it has been written purely to achieve this."

In the case of BEC's customer Raleigh, for example, BEC has enabled warehouse functionality in Raleigh's ERP system so the company hasn't had to purchase a WMS. As a result of bringing this into the ERP system, Raleigh now has the real-time business intelligence it would not have had if it was part of a separate system.

Mobile/back-office integration

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? Titterington commented in the affirmative. "One of the biggest customer complaints with field service is poor first-time fix rates followed closely by cost," he said. "With machine learning capabilities, you can also distinguish fault patterns, forecast when a maintenance issue is likely to occur, and detect a solution. We always suggest reviewing these areas as it saves your customer time and money whilst optimising your own business performance." For manufacturers who are diversifying into servicing what they produce, Titterington explained that Microsoft Dynamics 365 for Field service provides monitoring through the Internet of Things allowing companies to replace costly break-fix service with a proactive service which follows self-healing steps.

Schipperus explained that field sales is one of the areas that has been highly automated and digitised through apps and devices. However, he added that what is essential is that these remote tools absolutely link into the ERP and are not just synchronising data.

He continued: "The full ERP data, processing power and pricing logic should be accessible in real time to make them really useful, but also to stop multiple versions of data being created that then require constant updates back into the ERP to ensure data is not lost. Doing this also enables external sales agents to work with the correct data around customer specific pricing, stock availability, order history and customer agreements, which we see great demand for in manufacturing sectors such as food & beverage.

"You might have ten years of customer history stored in the ERP. Having this at your fingertips within a mobile app is critical to performance. This is particularly vital in B2B sales environments where customers may have bought frequently and loyally from a manufacturer or supplier on a week-by-week basis over many years."

Quinn made the point that the notion of mobility has driven the change in ERP, not vice versa. "Except for field service and those types of specialty apps, HTML5 has already changed the game for ERP," he said. "Users of all time, those travelling often, work-from-home types and those with midsize form factor preference can now use all or most of a modernised ERP solution from whatever device they like. There will remain, however, function, role or job specific ERP capabilities that work better on a native mobile framework."

Briggs commented that there are two aspects to consider – the first being recording processes and transactions in real-time in order to facilitate increased accuracy and productivity for people who are doing the work. "The obvious benefits of this are increased productivity and accuracy of data," he said. The other aspect, according to Briggs, is managers and shift supervisors, etc being able to access business information, reports, dashboards etc from mobile devices such as mobile phones and iPads. "The information is to hand – they don't need to dial in or call somebody up in order to see this up-to-date information," he explained.

Offline working

Lewis said mobile is a critical consideration in all areas. In the case of Infor's Mobility for Field Service (Infor MFS), Lewis explained that a key improvement is the ability for offline working – enabling field workers to update the information on each job as they complete it. "This becomes important when back-office analytics are carried out on data later," he said. "Understanding exactly how long each job takes can improve job allocations in the future. The data can also be used to assess potential training requirements between different staff."

However, Lewis stressed that it is not just a case of information in the field feeding the back office. "Information flows two ways," he said. "This cuts the time of repair and the burden of maintaining plant significantly. If operational data is more quickly updated, then back office processes are quicker – invoices are the obvious example."

Cloud/SaaS

And what of the current state of play regarding Software as a Service (SaaS) and Cloud models in relation to ERP? Andy Brown, Access Group, made the point that it is important to be clear about the difference between Cloud and SaaS in the first instance. "Most customers want to be able to access their ERP application from anywhere, at any time," he said. "This does not necessarily mean that they want to pay for it via a subscription, or to use it via a web browser. A traditional on-premise system may still be hosted elsewhere and accessed remotely, without being fully web-enabled. Web functionality sometimes comes at the expense of speed, which is not acceptable when it comes to real-time planning."

Brown pointed out that a hybrid model can work very well. "Bolt-on modules, such as payroll, business intelligence, or CRM, can be designed to be pure Cloud standalone applications, while having the ability to connect with a central ERP function," he said.

Schipperus stated that Cloud and on-premise models are both valid. "Cloud and ERP have together moved mountains in recent times, especially in terms of giving a greater number of smaller and mid-sized businesses access to these tools," he said. "However, it's still a two-horse race with ERP being divided between Cloud and on-premise."

According to Schipperus, the reason for this comes down to the type of organisation. "In larger businesses with lots of ERP history, the adoption process has been to tailor ERP to their business processes," he explained. "It's hard to reverse this and move to Cloud which generally speaking offers more 'vanilla flavoured' platforms. For younger, or smaller, or generally more agile organisations, Cloud ERP may offer less in bespoke functionality but it makes up for this by being far quicker to deploy and use. For these organisations the priority is not always finding the system that is the ultimate fit for the business, but one which can be introduced easily, has regular and uniform upgrade cycles and fits 90% of its requirements without expensive customisations. So, ERP in the Cloud or not? It's still an open choice. However, we do see Cloud being the future of ERP, but with many different timescales and adoption approaches to consider."

'Keeping the lights on'

Quinn explained that some competitive new Cloud-only ERP vendors have emerged. "Some established historically on-premise vendors that jumped to the Cloud relatively early have put themselves in a better position," he said. "Some of the laggards are playing catch up and losing share. IT departments and their business partners recognise that most ERP vendors are going to know how to run their ERP better than the customers' IT department, and even more securely. Defensive IT departments are afraid of losing jobs and political capital. Enlightened IT departments see the opportunity to shift 'maintenance' and 'keeping the lights on' to the ERP vendor, and redeploying the IT team into more strategic efforts that increase the value of IT."

That said, Quinn added that the notion that a Cloud ERP vendor will automatically install changes blindly is "a terrible idea". "ERP impacts business processes," he said. "There needs to be an open and opt-in approach for new capabilities. The blind updates we experience in Facebook could prevent a company from closing its books on time in the realm of ERP."

Phelan made the point that most enterprises already have significant investments in ERP applications – some are in the process of implementation while others are rolling it out globally or renovating their existing deployments. "Movement to one or more of the three Cloud-dependent HOOF scenarios is fuelled by market-disruptive technologies including 'as a service', the Internet of Things and in-memory computing technologies," she said. "The rearchitecting of traditional ERP solutions by mature ERP vendors, a surge of contemporary Cloud/SaaS vendors and the proliferation of shadow IT are changing the market landscape. These changes are forcing CIOs and their stakeholders to rethink their ERP roadmaps and lifecycle."

Titterington said that as Cloud computing has redefined the traditional ways in which enterprises operate, UK business have been transforming their operating models with various Cloud computing technologies such as SaaS, PaaS, and IaaS. "A greater emphasis on service delivery has compelled distributors, as well as manufacturers and retailers, to reassess and redefine their role and to adapt to the changes in the way technology is being implemented and used," he said. "The growing shift to the Cloud and SaaS ERP deployment has focused the mind of IT managers on mobility, cost control and responsiveness as central themes in their procurement. Specifically for distributors, the Cloud can provide benefits in reliability, consistency, predictability of capex and real-time updates in inventory levels and pricing."

Lewis commented that Cloud has gone beyond being the new normal and is pretty much the default requirement for a lot of high growth businesses looking for ERP. "Indeed, it is pretty much default for all business," he added. "We have around 7000 customers on Cloud, totalling around 66 million users. This is because Cloud is all about growth."

Lewis explained that according to a recent IDG survey of senior IT decision makers, 73% believe Cloud will change the way new services are delivered and consumed, 73% say Cloud will increase speed of service delivery and 82% say Cloud will enable new and efficient ways to reach customers. However, for ERP in particular, Lewis remarked that Cloud is now table stakes for any discussion. "Any business looking to implement new ERP systems wants agility, speed, flexibility, scale and fast ROI – and that means Cloud," he said.

Greater flexibility and easier data access

Hall commented that more and more enterprises are opting for the SaaS model as they look to swap their CapEx for OpEx and streamline their upgrade processes to ensure that they can take advantage of the latest features and functionality. Hall added that it provides great flexibility and access to data at any time from any location, as well as a reduction in the total cost of ownership. Hall also explained that SaaS enables employees to more easily access applications remotely, "which is now considered somewhat of a necessity considering today's highly mobile workforce and the need to remain connected anytime and anywhere".

Read is seeing Cloud ERP emerge as a popular option to on-premise development. "Cloud ERP offers a compelling value proposition of lowered costs, greater scalability, and swifter and less error-prone implementations," he said. "New Cloud solutions can go live in as little as three months. Adopting or switching to Cloud ERP also avoids making costly upgrades once the applications are installed in order to keep them current with new technologies and market trends. Companies use these occasions to move to the Cloud to avoid the costly, capital-intensive, and time-consuming tasks of integrating existing on-premise systems or rip-and-replacing them with new on-premise solutions."

Read added that the Cloud ERP demand has been driven by the midmarket, but enterprises that have on-premise ERP systems are gradually adopting Cloud ERP. "For example, it's being used by the automotive industry for functions and tasks to support new products or services that require agility, innovation, and speed," he explained.

Even so, Read remarked that Cloud ERP systems have not yet been fully embraced by the marketplace. "The reasons include that the Cloud systems may lack the full range of features provided by on-premise systems," he said. "Companies also may be reluctant to surrender control to the Cloud. They will want assurances that the cloud ERP platforms are going to perform reliably and securely before trusting their applications, and their businesses, to them."

Devault believes end user adoption is the key to any successful ERP implementation. "Over the last few years, vendors have made it a focus to improve dashboards, role centres and homepages," he said. "Infor specifically has the 'customer experience' as a new mantra. Making systems easier to navigate and intuitive in use is becoming protocol. Enabling users to personalise dashboards, create custom queries and collaborate with other users without involving IT resources is essential. Cloud/SaaS deployments tend to have more best practices build into the system, simplifying and streamlining the end user experience."

Castellina commented that the Cloud model is very much an established viable deployment option today. He added that, from a security perspective, most of the previous concerns in this area have been washed away. "One of the primary goals of an ERP vendor is to ensure that it is providing customers with a secure solution that is not going to be subject to security breaches or subject to downtime," he said. "So, in many ways end-users understand that a Cloud solution is actually more secure than just relying on their own internal firewall.

Big Data

How can technology trends such as Big Data help to gain the best out of ERP systems (either existing or upgraded)? Quinn believes that realising benefit from Big Data or advanced analytics is more cultural than technological. "Companies that want to be data driven – and that is a position held from the CEO and board on down – have plenty of choices in the analytics realm; maybe too many choices," he said. "The key regardless of when you adopt advanced analytics, however, remains, as it has always been – garbage in garbage out. A commitment to business-driven data quality, nurturing, filtering, proliferation, security and management is the only guarantee to value. You might have the coolest Big Data tool and brightest data scientists on the planet, but if your company is not culturally data driven and you aren't managing your incoming data properly you will be wasting plenty of money."

Titterington considers that business intelligence (BI) is an essential tool for collecting, classifying and evaluating information from all levels of an organisation. "BI applications can filter through data from across the supply chain – from suppliers and materials to production and shipping," he pointed out. "BI and Big Data has become the driving force of more and more software implementations. They enable manufacturers and distributors to make real-time, informed decisions to improve shop floor efficiencies – providing insight into production line yield trends, product configurations, BOM profitability, cost to order, inventory levels, external trends, sales strategy development, turnover and forecasting, resource management and more."

Lewis maintains that the discussion on Big Data has already evolved. "Two years ago, it was about collecting the data; now it is about how it is used or analysed," he said. "Next-generation enterprise software won't just collect, report, and distribute information – it will anticipate problems and respond with solutions. It will uncover opportunities and recommend next steps. It will drive strategies in all areas of business, from recruiting and staffing to asset management and pricing. Overall, ERP driven by Big Data will use data science to identify, analyse, and solve complex business problems. Examples might be staffing allocations, inventory optimisation or parts tracking."

Hall considers that technology advances in manufacturing have made data accessible in a way that it has never been before. "Information can be collected in real time, in points through the manufacturing process," he said. "The issue now is what to do with all of that data, and how businesses can take the information collected and turn it into actionable insights. Regardless of size, end-to-end visibility is something that many manufacturers strive for, yet struggle with.

However, in this new age of Industry 4.0, it is now possible for manufacturers to achieve this via a combination of Big Data and IoT-in other words, achieving end-to-end connectivity across the entire manufacturing process and throughout the supply chain. Leaders in manufacturing are at the top because they understand the value in collecting data, which helps them to make more accurate business decisions. Through connectivity between machines, devices and manufacturers, data can be gathered to take advantage of the newest advances in technology, allowing for higher productivity and efficient processes."

Two ways of thinking

Subramanian believes Big Data is certainly an ongoing area of development within the ERP marketplace. He elaborated: "If you look at Big Data within the context of bringing unstructured data together, having a data lake and being able to analyse and predict things in order to derive benefits such as greater visibility of customer demand etc., this is somewhat different to the tradition idea of ERP, which is more about relying on more structured data and working through a well-defined set of processes. Philosophically, these two ways of thinking about data are very different.

"However, of course in order for companies to make sense of what they need to do from prediction through to execution there has to be a place where these two philosophies come together. Some supermarkets, for example, use Big Data to forecast demand, but how does that translate into actually being able to forecast demand accurately and ensure the stores and the warehouses have the necessary available stock. How Big Data and ERP link together is something that companies are doing in different ways to varying levels of efficiency, but the essential idea of utilising large amounts unstructured data in order to structure a more complete end-to-end view that can help companies make better decisions and enjoy better business outcomes is a very relevant one."

Castellina commented that Big Data is really about making data more consumable and more usable for the business user. ERP systems are well-established suppositories for a wide range of information for businesses, but Castellina makes the point that organisations are faced with more and more data concerned with more and more things – and much of this data is unstructured. "Big Data and in-memory computing are making it easier for businesses to use that data to make decisions quicker and more effectively," he said, adding: "Big Data is about being able to consume more of that data more quickly, and being able to use it in a lot of different ways. We often hear a lot of talk around how Big Data can be used for managing customer data and identifying trends and looking at ways to maximise your revenue. So, there's a lot of opportunity for organisations of all types."

Briggs explained that much of the BI in BEC's solutions to date has focussed on users; for example, the performance/productivity of operatives. "We expect that we are going to see much more use of the masses of data that can be gathered through our production line systems – sensors, measuring, testing equipment, robots etc., giving the ability to monitor all business process, transparently across many sites," he said. "The large volumes of quantitative data will enable very accurate measurement and forecasting of resources - labour, energy, materials etc., and provide immediate real-time quality and reliability measures with triggers for anomalies and exceptions, which can then be handled immediately."

The road ahead

What might be the next innovations/developments to look out for over the next year or two? Schipperus commented that, in many ways, it is ERP's rich historic data that holds the key to improving the future customer journey – based on buying patterns, product choices etc. "ERP's ability to offer Big Data insights into customer behaviour, not only in a static business analysis environment but also as part of an intelligent process, is essential to our world at the customer coalface," he said.

Quinn believes we will continue to see adoption of IoT and advanced analytics. "They walk hand in hand, but companies will need to modernise their ERP to fake full advantage," he said. Quinn considers that we will also see virtual reality and 3D printing continue to gain traction in manufacturing. On the tech front, however, he believes edge computing, as an adjunct to Cloud, will begin to have an impact. "Want Big Data to fly without impeding ERP? Move to the edge. Want slender versions of ERP to support smaller remote operations? Can you say Edge?," he remarked.

Lewis explained that Infor has been pioneering co-innovation – partnering with new customers in industries that need disrupting – to create completely new capabilities and improved functionality. "This has been most dramatic in retail, but there is no reason why it cannot be applied to industries such as aerospace and automotive or process manufacturing," he said. "Indeed, in some areas such as the heavily regulated pharmaceutical industry, these kinds of partnerships hold a great deal of promise."

Lewis added that outside of manufacturing, but heavily influential, has been Infor's work with leading retailers – transforming the way in which they interact with customers – driven by customer demands. "Infor believes the manufacturing industry needs to learn the lessons of its retail cousins in the way manufacturers interact not only with their existing customers today but perhaps customers more directly in the future as business models evolve," said Lewis.

Titterington commented that Microsoft Dynamics 365 is a new approach that brings together Microsoft's CRM and ERP solutions into one platform with specific, purpose-built apps for business functions such as Finance, Sales, Customer Service, Field Service and Operations — with built-in insights, intelligence, and workflows. "All Dynamics 365 apps, plus the wider portfolio of Cloud business solutions like Office 365, share a common data model to make it easier to build, collaborate and grow," he said. "I see more line of business managers making and influencing IT decisions, this subtle but important change in procurement of tech is driving more app based approach but without the disjointed challenges for IT, hence the Common Data Model." Titterington added that augmented reality (AR) is quickly becoming an important technology in the workplace, bridging the digital world and the physical world. "During the next few years I think AR will become more commonplace impacting business activities such as cost effective and more lifelike training for engineers," he said.

Castellina commented that there will be a lot more talk around defining what the Internet of Things is and how it can benefit manufacturing businesses in practice. He also anticipates the continued development of ways by which users can derive maximum value from connected devices. Overall, Castellina believes we will continue to see a developing trend regarding the further consumerisation of ERP; making the solutions easier to use and spreading their reach wider across business functions within customer organisations. "I think it's all about the continuing development towards better usability and better decision-making," he said.

Subramanian believes there will continue to be developments that aim to provide better quality information, quicker information and better connected information. He added that Capgemini is also seeing a resurgence in interest in RFID; for example, a number of leading retailers have successfully implemented this technology and are in the process of expanding the scope of their investments. Another area where Capgemini is seeing increasing awareness revolves around a number of dimensions of information data collection for ERP inventory.

Subramanian explained that the first is 'how will my processes benefit my customer?'. "For example, if I know where my stock is within the store, can I offer these products to my customer in such a way so as to provide an improved customer experience?," he said. "Then, if I want the customer experience to be consistent, and have the software and hardware in place, how do I ensure that my store operations are optimised in order to ensure staff are fully focused on providing the best customer experience? For example, how do I do receiving, and how do I move stock from the back room to the front room?

Then, if this is what I need to achieve in the stores how do I intelligently orchestrate all the stock coming in from my vendors across my warehouses and logistics centres through my 3PLs and plan for it in a manner that is the most efficient? Finally, how do I ensure that I can connect seamlessly with all my suppliers and customers? All this information feeds into the ERP system, so the more efficient I manage these processes the more efficient my ERP will be for my business."

Phelan commented that all scenarios will coexist during the next 10 years, and an organisation may move through several scenarios over that time (e.g., on-premises monolith to hybrid to flip). "Therefore, CIOs and ERP leaders must understand these scenarios, help their enterprises understand what they mean, then jointly decide which paths to follow and execute upon their chosen strategic direction," she said.

Enormous upside potential

Devault considers that, in the short term, we will see vendors using technology to improve and automate communications and collaboration. "Companies are more in tune with their supply chain to the point of sharing access to each other systems," he said. "Getting real-time data and responses from vendors, and even customers, brings enormous upside potential. Tools used for internal and external collaboration will continue to improve and be implemented."

Devault added that manufacturing companies are increasing their use of software tools for research and design. He continued: "Social media comes into play as the Internet of Things provides access to data that can be leveraged in numerous ways. Distribution companies are collaborating with customer for more accurate sales forecasting which can lead to better MRP calculations giving companies the ability to optimise inventory levels and locations. Mobility continues to be an ever-improving component in the ERP space. From sales teams having better access to production and available to promise data to field service technicians being able to order replacement parts on the fly."

Hall commented that Epicor believes in the rise of smart factories. "Simply put, this is the computerisation of manufacturing-machines that are technologically advanced enough to communicate with each other, monitor physical processes and make decisions," he explained. "Industry commentators believe that there are many benefits of creating a 'smart' manufacturing environment, including greater productivity, more detailed product specifications, and the potential to reach a wider customer base.

However, to take full advantage of these 'smart environments' it is essential for manufacturers to use technologically advanced ERP systems that can support this kind of machine interaction and extract relevant necessary data. Wholly smart factories may be some time off yet but industry is definitely realising that creating smart production processes is a 'smart' way to cut costs and increase efficiency."

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