Extreme ERP: Leveraging your investment

ERP systems are evolving. Once just glorified backroom accounting tools, they are now integrated solutions spanning a growing number of organisational processes. What are ERP buyers demanding today and how are the vendors delivering?..

By Simon Hendery

As the differences between the core “financials” modules of most enterprise resource planning solutions becomes less pronounced, it’s the functionality beyond the financials that buyers are focusing on as they seek out technology to help drive business benefit and differentiation.

Functionality ranging from customer relationship management, electronic data interchange, supply chain management, mobility, e-commerce, e-recruitment, business intelligence and even carbon footprint monitoring and management are all becoming part of ERP solutions as customers demand more and vendors work harder to meet their expectations.

What’s driving this broadening of the ERP offering? Peter Dickinson, chief executive of business software developer Greentree International, sees it as a reflection of three general trends being experienced across business and society.

Firstly, standards are rising across the board – people no longer accept poor quality goods, poor service or poor delivery. As a result businesses have had to raise their performance, which has meant improving process management.

Secondly, says Dickinson, today everyone in business is time-poor. There aren’t the hours in the day there once were to devote to training staff, for example. But at the same time, the cost of making errors in business has become extremely high.

Thirdly, the internet has led to the rise of self-service, and put much more power in the hands of consumers.

For Greentree, which specialises in solutions for midmarket organisations, the upshot of all this has been a shift in the type of development the company has focused on in the past few years. The one time “accounting software” company has been focused on building functionality such as supply chain management, e-commerce, EDI and HR into its solutions. It will launch a new mobility platform later this year.

“This is so far away from back-end systems hiding away in the accountant’s office,” says Dickinson.

“It’s really about having fingers through the entire operation, whether it be the factory floor in terms of manufacturing, or the help desk in terms of service management.”

And this type of integration, to create more of a full business management system can have the flow-on benefit of making the technology suite easier to use.

“If you have a system where the user can quickly put together either complex, or quite simple, processes then you address a lot of training issues. You address a lot of the issues that arise when you are bringing new people in [to an organisation].”

Knowledge is power
Mike Carroll of Strategis Solutions says another driver behind the broadening of ERP functionality is end-user demand for having all the information they work with easily accessible.

A worker sitting at a terminal who has an interest in product X wants his screen to tell him basic ERP-type facts like stock levels and price for that particular product. He also wants to be instantly be able to pull up a picture of the product, its technical design notes, or a link to the vendor’s website.

This is not just about enhancing productivity, says Carroll, it’s also about empowering staff with instant knowledge.

“If you’ve got someone on telesales, they may not have all the technical knowledge but if it’s easy to get at then they can deliver a quality service to their end customers,” he says.

And while ERP buyers are demanding this type of integration and widened functionality, at the same time there is also a growing requirement for seamless integration and easy synchronisation of data between systems.

“We’re seeing that the ERP system is expected to deliver more but also needs to be able to collaborate with outside packages in a more standardised way – for example XML interfaces are becoming more common,” says Carroll. Derek Rippingale, joint managing director of Professional Advantage, says functionality associated with workflow is a growing area.

“Web-based requisition systems that fully integrate with the financials is an area that we’re seeing a lot of companies expanding into. They get a lot of benefits from that, whether it be efficiencies or whether it just be information and oversight.”

Going mobile
Rippingale says mobility functionality is also increasingly important because ERP buyers want systems “with the depth to get it as close to the customer, or point of transaction, as possible”.

This transaction proximity could involve “road warrior” staff issuing electronic purchase orders at the time of purchase which are automatically beamed back to their company’s system from the mobile device. This has numerous benefits such as avoiding the delays associated with paper processing and data re-entry, and reducing error rates.

Carroll also says mobile methods of extracting information from ERPs is in growing demand with various “push” and “pull” methods being deployed depending on management requirements at specific organisations. Some vendors have developed sophisticated mobile phone clients capable of extracting and displaying key data – SAP, for example, has just released a CRM access application for the iPhone – while in other cases a simple text or email triggered by an event recorded by the system is all that is required.

Different drivers
SAP spokesman Peter Sertori said the ERP enhancement process was being driven by both large enterprise users and the smaller to medium sector of the business market, with the two groups having different motivations. At the small to medium enterprise level, customers were often moving up to an ERP solution for the first time,

so were looking to replace a collection of small systems – accounting, HR, etc – with a standardised solution which would show a return on investment in a short time frame. At the large-enterprise end of the market, organisations which had run ERPs for several years were looking to extract more value from their information infrastructure.

“They are looking to us for solutions around business intelligence, business performance management, CRM and increasingly – with emissions management becoming a key issue – they’re looking at governance, risk and compliance solutions which will encompass their environmental compliance responsibilities.”

Sertori said another factor impacting enterprise technology investment was that a new generation of employees was entering the workforce with a different expectation of the software they interact with and an “information now” demand.

“It’s a function of the changing nature of the workforce. People have different expectations now of the applications they interface with at work - they don’t want hard-to-use, inflexible applications,” he says.

“Companies need to be aware of that when they’re upgrading their software, and that’s driving a lot of expectations of companies when they come to us – they need cleaner information in a faster timeframe”.

Using information
As work practices and the nature of business communications change, tools like SharePoint, Microsoft’s intranet and online document management system are also impacting on ERPs, says Rippingale.

SharePoint can speed up communication and makes processes more efficient but he warns introducing a broader technology base into an organisation is not a panacea for solving a business’s systemic issues.

“If they just say: ‘We want to be really efficient at working across the organisation,’ but they don’t have a common point of storing data then it’s not going to work,” he says.

“If you’ve got SharePoint, for example, but you can’t serve up information in it, that takes away a whole lot of the benefit of having a common platform for an organisation.

“So it’s important organisations work their way through that sequence of maturity in terms of how they’re using information. There are organisations that do that well and there are organisations that don’t.

“Some don’t put the time and the effort into it and they just expect you as the vendor to come in and wave the magic wand because you’re providing the technology, and it will just happen,” Rippingale says.

“Unfortunately it’s not just a question of technology – it’s a question of other things like do they have the right people on board, do they have the culture that supports the sort of things you’re trying to achieve with the system and do they have the processes that support you getting the most from technology.

“So it’s not just a matter of organisations being willing to take the right technology on at the right point, it’s also about them being internally willing to have a holisticfocus.”

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