September 17, 2021
Co-authored by Samta Bansal
As businesses advance their digital transformation efforts, enterprise resource planning (ERP) systems are evolving — arguably as significantly as the shift from materials resource planning (MRP) to ERP. Just as businesses reimagined operations by leveraging advances in hardware and software in the 1980s, they’re now turning to next-generation ERP. They are aiming to digitally transform their processes to meet goals, including greater efficiency, productivity, profitability, and competitiveness.
Of course, ERP systems still provide the functionality that businesses have traditionally relied on, including inventory management, production planning, customer relationship management (CRM) and accounting. However, businesses and enterprises are exploring ERP’s potential beyond its legacy role. Here are five ERP trends born from businesses’ desire to innovate:
Growing businesses often find themselves with newly acquired divisions that use different ERP software. The current trend is to standardize ERP throughout the entire organization.
With a common, centrally managed ERP core, organizations break down barriers to data sharing. They can even connect data threads from each process or department to central management, creating a single source of truth for the entire enterprise. This real-time visibility into operations enables informed decision-making and greater efficiency, and paves the way for using advanced technologies and automation.
Historically, manufacturers have collected, analyzed and stored information technology (IT) and operational technology (OT) separately. It’s hard to pinpoint a specific reason for keeping these data streams siloed; however, the IT-OT divide may have been due to separate teams of employees with different skill sets or proprietary technology that wasn’t easily integrated.
Manufacturers have now discovered that establishing data threads between manufacturing equipment, programmable logic controllers (PLCs), or supervisory control and data acquisition (SCADA) and IT systems will enable new capabilities. Connected systems allow:
Ultimately, these process enhancements lead to data insights that can inform decision-making, cost control measures, continual improvement and competitiveness.
Data from connected systems makes it possible to provide employees with customizable, user-friendly interfaces. With cloud ERP systems, organizations can leverage interface overlays that customize user experience (UX) based on individual team members’ needs, whether they’re in product development, production, marketing, operations and/or management. For example, a production manager will be able to monitor the scrap rate on the floor in real time via ERP and a business intelligence (BI) tool, while a sales manager uses a different interface to identify top upsell opportunities. Moreover, by combining information from various systems, the personalized insights the system supplies to users based on their roles can provide much more value than it ever could before.
Leading ERP systems, designed to be extensible, are becoming the core of the system that businesses build upon. Organizations can add applications and features to tailor their solutions to meet their employees’ needs today. Further, as technology advances and industry demands change, a business can adapt its system, rather than resorting to a rip and replace. At Hitachi Vantara, we see more of our customers preparing for a future that includes assistive or conversational user interfaces, robotic process automation (RPA), AI-powered data analytics, and other solutions that extend functionality with intelligent technologies.
Mobility, once an optional ERP feature, is now standard. In an era of remote work, mobile access to ERP enables business leaders to manage operations from any location using a tablet or smartphone.
Mobile access to ERP also has significant advantages for field sales and technicians. It improves daily workflows by enabling employees to upload data in real time, rather than taking time once they return to the office. Mobile ERP also gives field workers access to inventory, account, supply chain or other vital information when they need it, so they can make fact-based decisions and provide the best possible service. It is also key to enhanced collaboration and communication between team members in the field and those working at physical locations.
Gartner® predicts that by 2022, 30% of large enterprises will move to a cloud ERP platform. With the cloud migration well under way, the task now at hand is optimizing the cloud environment with ERP as the core, enabling enterprises to leverage cloud infrastructure to expand capabilities and support innovation.
The cloud ERP trend is also having an impact in another way: It has put ERP within reach of small and medium-sized (SMB) businesses. On-premises ERP systems were expensive for smaller organizations, both in terms of initial investment and ongoing maintenance. Cloud ERP offers SMBs ERP for a predictable monthly payment that includes all software upgrades and maintenance and that requires minimal hardware on-site.
Sharpen Your Digital Edge With a Flexible ERP Strategy
An overarching theme in today’s ERP trends is flexibility. Leading systems organizations enable companies to begin by implementing an ERP core, and then adding the features and advanced technologies they need to remain competitive. ERP is also trending as support for tools that businesses use to strengthen partnerships, improve customer satisfaction, and create a company culture that supports achievement and success.
Designing and implementing a system to achieve those goals, however, is a complex undertaking. To ensure success, enterprises must find IT professionals with knowledge and expertise in cloud solutions and intelligent technologies. The right partner will also have a proven track record of assisting teams adopt new solutions and get the most value from them.
With the right partner who can show you how to make ERP the nerve center of your organization, you will take a giant leap forward in your digital transformation and toward greater innovation and success.
Pavan Tadepalli is Senior Vice President at Hitachi Vantara.
Samta Bansal is Global Consulting Strategy and Market Leader at Hitachi Vantara.
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 Gartner, The Top 6 Best Practices for Mastering Your ERP Data , Tim Faith, Denise Ganly, Denis Torii, Refreshed 20 April 2021, Published 28 August 2019.GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.