THE LATEST TRENDS IN ENTERPRISE RESOURCE PLANING
Date: Thursday , August 04, 2011
The word ERP (Enterprise Resource Planning) came into existence quite early and it was by 1920 that the modern ERP systems came into full force. The evolution since then has gone through various innovations thereby living up to the spirit of rapid changes taking place in the IT world.
ERP calls for constant modifications and upgradation. ERP developers are facing tremendous pressure both from vendors and companies. In this context it becomes important to analyze the ERP’S trends and modalities. It was about creating a scalable, maintainable product design and creating an ecosystem of implementation partners, consultant community, skilling infrastructure and product development mechanisms to incorporate customer experiences in future releases.
If look in recent past, starting late 1990s and early part of the new millennium integrated technologies and standards made quick progress. It was possible to think of integrating applications made on diverse technologies and running on different platforms. This made it possible for ERP products to include features about integrating enterprise wide functionality with extra enterprise functionality.
Adoption of World-class products by Midsize Companies
With robust delivery infrastructure of ERP product leaders, the myth that world class ERPs such as SAP or Oracle can be adopted only by large companies has been busted fair and square. There is a sharp increase in the adoption rate among midsize companies world over. China and India have provided sharpest software sales opportunities for the ERP product leaders in last decade. The growth percentage increases every quarter consistently and currently touches about 30-40 percent new customers every year.
ERP Functionality on Mobile Handhelds
Users had long wished to run execute ERP functionalities on a handheld. There are several situations when a person is on the shop floor, away from his workstation and feels the need to commit a transaction or lookup for information. Same is true for in-field sales force of companies who handle the distribution network. Executive leaders of a company wish as well to have ready to analyze information on their PDA. Realizing the importance of this, the largest market share holder SAP acquired Sybase’s mobile application platform in year 2010.
Product Consolidations – ERP and Business Intelligence
This is a fast emerging trend of backend product logistics of ERP world. For long ERP product was focused on just the transactional functionality and some static reporting functionality. Business Intelligence used to be a separate product that will run on top of an ERP system and will be sold separately. Most of the ERP vendors have begun to bundle the reporting and analytics as part of the ERP product itself.
ERP is a way to integrate the data and processes of an organization into one single system, using sub-systems that include hardware, software and a unified database in order to achieve integration, to store the data for various functions found throughout the organization.
The key to ERP is integration. Its main goal is to integrate data and processes from all areas of the organization and unify it, to provide ease of access and an efficient work flow. ERP Systems usually accomplish this through one single database that employs multiple software modules.
The ideal configuration is then to have one ERP system for an entire organization, but organizations that are very large have been known to create an ERP system and then add external interfaces for other stand alone systems considered more powerful or able to fulfill the organization's needs in a better way.
The buzz words – SOA, Cloud Computing, SAS
In the pursuit to make the ERP product affordable, vendors have taken it in a completely different model of delivering the software. Software as Service (SAS) model of delivering software means hosting the software solution at a central location and offering it to multiple users on pay as you use model. Hosting the solution at a central location and offering it over the internet connectivity is also referred to as a cloud computing.
Service Oriented architecture refers to architecture of application design that allows for a piece of information to be available on a method call. It facilitates better integration between disparate systems owned by different parties. In many ways it also makes the pay as you go model of cloud computing possible. Since every feature is woven as standalone functionality, it is easier for vendors to have a pricing model where an end user pays for the number of scenarios that are utilized and not for the entire software bundle.
Paul Hofmann, VP of SAP Research, sees big technology and business model changes coming for ERP in the future. New technology trends such as high performance computing, pervasive connectivity, Web services, and SOA will affect the front end as well as the back end of ERP.
Roadmap Strategy of Adopting ERP versus Big Bang
Over the years it is understood that deploying an ERP and replacing everything, which was running until then is a critical event. It is wise to keep the scope of first phase as less as possible and land the plane. Particularly with larger number of midsize companies with not too many spare human resources implementing ERP systems, it is clear that if you fly the plane too long, you run a higher risk of never landing. Increasingly implementers have started suggesting a step by step way of adopting ERP systems. Roadmap strategy is also conducive to the need of midsize companies who look for shorter cycles of return on investment.
A glimpse of time to come
In coming times there will be considerable amount of improvement in the way an organization integrates itself with every other entity, which is involved in the process of business. One can envision all interactions with suppliers, clients, logistics partners, finance partners and government agencies to be occurring over ERP systems. For foreseeable time in future it’s going to be the transformation to Software as a Service model that will consume most mind share of product owners, implementers and end users.
ERP trends reflect positive signals for the ERP vendors and companies availing their service. It is important to remember the fact that both the vendor and the company will be able to make use of any advantage (including the modern facilities) only through proper coordination, teamwork and nurturing a cordial atmosphere. Mere IT ERP trends will not help in this aspect.
The author is CEO, Vital Wires Consulting