ERP for Agility, Innovation and Customer Experience
It all boils down to these three key outcomes.
After over a century of being in existence, the modern business of today is obsessed with achieving outcomes with these three themes – Speed & Agility, Innovation and Customer Experience.
And to help them achieve this, businesses are either evaluating digital technologies, or diving head first into a digital-first initiative. And the first question they would need to ask is – what do I actually need?
All the responses they will get, eventually leads to one answer – ERP.
Business software or Enterprise Resource Planning (ERP) has evolved over the years, from being a set of standalone applications, to being end-to-end integrated suites. These were the computer tools that were intended to ‘do-it-all’ for the business, back then. What they turned out to be instead were gargantuan projects that were slow and expensive to implement and even costlier to maintain.
Research also show that about 30-percent of ERP implementations fail to achieve even half of targeted business benefits.
Also, businesses are becoming more outward-facing, and but traditional ERP systems cover a majority of operations that happen behind the scenes – planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, transportation and e-business – where in all this is the application where Customer Experience is addressed?
Cloud and integration
It’s not all bleak, as some modern ERP systems do address the need for customer-centricity with customer-facing applications like CRM or Customer Relationship Management modules. In recent years also, the option to offer ERP via the cloud has entered these vendors’ stable of offerings.
Cloud is an interesting technology trend that has spelt many things for many organisations.
When it comes to ERP and having it delivered via the cloud, there are benefits and appeal. But most cloud ERP offerings are usually not customised to fit an enterprise’s needs, and some businesses may find themselves saddled with an ERP system that doesn’t deliver what they need or doesn’t grow and scale with them.
Larger and more established businesses also face another set of problems – integration complexity. Multiple sourcing methods sometimes equate to more than one ERP system in an organisation – it usually also spells more trouble for the IT team!
Another moving target that businesses also have to contend with is licensing fees; large MNC vendors want to protect their IP and introduce licensing fees which could be viewed as either prohibitive and non-competitive or fair and deserving. Whichever the case may be, the lack of transparency and certainty associated with software purchase is causing a number of businesses suing vendors or being hauled to court themselves.
This just a preview of the ERP landscape so far, and it is a far cry from the Speed, Agility, Innovation and Customer-centric themed bandwagons that businesses urgently want/need to hop on right now.
What shall their next move be?
For Malaysia at least, and specifically the manufacturing industry, the opportunity for ERP is ripe.
By 2020, IDC predicts Malaysian enterprises to spend approximately RM1billion in the manufacturing sector. Enterprises in the manufacturing space will increasingly look towards ERP software players to provide the requisite solutions. This will contribute towards the growth of a digital economy, with solutions ranging from supply chain management, product lifecycle management, warehouse management to predictive maintenance, efficient processes, improving yields and decision support systems.