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ERP: The Linchpin of Enterprise Growth

By Pooja Jain pooja@accentinfomedia

With the enterprises embarking on the Digital Transformation journey, the impetus of making the organization digital enabled, to a large extend, lies with Enterprise Resource Planning (ERP). What makes ERP so special?

Global consults’ forecast that the global Enterprise Resource Planning software market will grow at a five-year CAGR of 7% to reach $44 billion in 2022. 

With the enterprises embarking on the Digital Transformation journey, the impetus of making the organization digital enabled, to a large extend, lies with Enterprise Resource Planning (ERP).

One of the key emerging trends driving the ERP market growth is the demand for seamless integration across several applications and platforms. Adoption of IoT along with ERP is also a growing trend that will lead to making ERP solution intelligent, real-time, and flexible.”

Arvind Didwania, Founder – Solution Enterprises, ANT MY ERP.

What makes ERP so special?

The emergence of ERP and the realization of the role of CIOs coincided in the 1990s. Whether the evolving nature of Database Management created the necessity for a CIO or not can only be conjectured now. 

But the significance of ERP with respect to the role of a CIO cannot be emphasised enough. A research by The Aberdeen Group states that lack of ERP software can lead to redundant data (35%), unaligned business systems (33%), and the inability to track business processes in real-time (28%). Especially now when Data occupies the central stage in any organization, a technology system like ERP becomes extremely crucial.

By increasingly integrating large ERP systems throughout organizations, CIOs needed to become smart buyers and to build strategic relationships with vendors and suppliers. Facilitating organization-wide communication and helping to enhance business activities with integrated global system deployments, CIOs gained more privilege and influence than ever in organizations and got increasingly involved in strategic business planning issues.”

Ajay Yadav, Head IT (North), Rail Infrastructure Limited.

The Evolving ERP Vendor Landscape

With the solution-based technology advancements, customers are demanding integration of diverse requirements into one. In response to this, the Traditional ERP Systems are evolving to incorporate a plethora of modules that an organization could benefit from. This includes, but is not limited to Customer Relationship Management, Human Capital Management, Enterprise Asset Management, Product Lifecycle Management, Product Information Management, Product Data Management, Quality Assurance, Manufacturing Execution System, Supply Chain Management, Transportation Management System and Warehouse Management System. 

Each of these individual applications is practically an extension of the core ERP System. Through these applications, the traditional ERP System is branching out pervasively throughout the organization. This gives ERP the power to break down the silo-structured database between different business divisions and integrate it, effectively providing a unified view of data across the organization. 

ERP Trends

With next-gen technologies like Cloud Computing, AI, Big Data & Analytics, and IoT pervading all enterprise systems and solutions, ERP could hardly remain unaffected. 

Commenting on the evolutionary trends of the ERP industry, Ajay Yadav, Head IT (North), Rail Infrastructure Limited said “ERP system was able to manage Material Management, Production Planning, Plant maintenance accounts, CRM, HRM that quite well. But in the last 05 years or so the evolution of ERP industry has had gone under major changes. Deployment of cloud-based ERP and E-commerce integration, ERP Solution with AI/analytics/IoT, ERP Going Mobile are evolution of ERP industry.”

‘Unleashing Exponential Evolution: 2019 ERP Trends’ report by Accenture identifies 5 key drivers of the ERP evolution to follow. Incorporating these actions in your ERP strategy can be crucial for an effective Digital Transformation, with fewer constraints.  These key actions are – Treating Cloud as the Gateway to Modernisation, Making your Core Intelligent and Extended, Partnering with Cloud Captains Instead of Traditional Services Firms, Personalising and Amplifying Insights by Converging Data.

The focus on modern ERP solutions is to provide complete security control to business with data protection, privacy, data backup and recovery service methods. As ERPs tend to talk to the suppliers and customers, usage of Blockchain is increasing for ensuring authenticity and lowering the risk of non-repudiation.”

Kumar Vembu, CEO & Founder, GOFRUGAL

“The topmost prominent emerging technological trend in the ERP Market that is expected to drive the growth of the ERP market is the user-friendly ERP Systems. The key aim of inclusion of ERP software in the network is making things easy in an organised manner. Hence, the user-friendliness of the software’s interface is the top requirement that will further pave its way towards its adoptability. Attractive dashboard, easy-to-use ERP features and mobility are key factors that will motivate next generation workforce to adopt ERP solutions,” said Arvind Didwania Founder – Solution Enterprises, ANT MY ERP.

Out of all the evolving ERP Trends, the one that stands out the most is the migration to Cloud. First things first, yes, moving your ERP to the Cloud, will in fact, straight up cut down on the kind of costs that the on-premise, now soon to be legacy system, demands. Particularly for the small and medium sized businesses, the decision to move to the cloud can hardly be counter argued. 

Cloud Computing eliminates the requirement for organization to purchase and install the hardware and software systems, it consequently speeds the installation process. Back in 2014, when the shift to the Cloud ERP was still in its initial stages, this speeded up installation process was already advocating the cause of the Cloud ERP. According to a survey conducted in 2014 by the industry analyst firm, Mint Jutras, it was reported that ‘respondents with SaaS implementations reached their first go-live milestone 19% faster than those with on-premise solutions’.

The balance tilts to the Cloud ERP with benefits like enhanced accessibility of data, high scalability, availability of the latest functionalities through the cloud vendor.

Elaborating on why businesses prefer Cloud ERP Arvind Didwania Founder – Solution Enterprises, ANT MY ERP said, “Businesses prefer a cloud ERP solution because it is cost-effective in terms of purchasing, installing and implementing the software. It even eliminates the cost of hiring IT personnel for installing and maintaining the servers physically in the business network. It offers easier and quicker cloud ERP implementation. Moreover, it ensures omnipresence of data, which allows users to work from anywhere, anytime and access data in real-time, irrespective of their location.”

ERP Deployment Options  

The 2019 ERP Report by Panorama Consulting Solutions listed multiple deployment options that their respondents were looking into. On-Premise continued to be the preference for 37% of the respondents, while SaaS ERP had a 20% deployment rate. Under Cloud ERP the trends showed that multi-tenant system had 21% acceptance among the respondent organizations, single tenant Cloud ERP had a mere 14%. And Hybrid ERP deployment brought up the rear at 9%. 

Commenting on the deployment of ERP project within the organization, Ajay Yadav, Head IT (North), Rail Infrastructure Limited said, “It should be no surprise that all ERP projects depend on people not only outside, but also inside, the organization. Nevertheless, many organizations think they just need to find a system with a good fit, and they are off to the races. Unfortunately they stumble out of the starting block and sometimes never finish. What they really need are the right people at the right time. Three groups of internal people are usually needed in any ERP project – a steering committee, project manager(s) and subject matter experts.”

Parveen Kumar Sharma, CTO & Consultant – I.T., The Institute of Chartered Accountants of India jots down pointers that an organization must take into account while selecting an appropriate ERP product.

  • The product should meet the functional requirement of the organisation.
  • The Platform used should be flexible and scalable.
  • Convenient user interface.
  • Product should use the current technologies with road map to improve in future.
  • Suitably priced.
  • Product should have success stories in the similar domain as ours.
  • Local partner support availability.
  • Product should a have a clear road map for improvement in future with upcoming technologies.

In this decade, the ERP based industry is inclined more and more towards the ERP solution that comes with AI-enabled features. The reason being it provides an interactive & user-friendly interface to its clients and employees.”

Parveen Kumar Sharma, CTO & Consultant – I.T., The Institute of Chartered Accountants of India

ERP and Security

The acute apprehensions of organizations with regards to placing the most crucial business data that the ERP comprises of cannot be neglected. Security remains a priority, particularly at a time when data theft, data leaks, security breaches are more than just potential risks. Cyber Attacks are reality that organizations are grappling with every day. 

Addressing the security question with respect to ERP deployment, Arvind Didwania, Founder – Solution Enterprises, ANT MY ERP said, “In the worst and highest level of severe cyber-attacks, an ERP system can provide an effective deterrent. But the only condition is that one must know how to use it. Access control must be extensively applied. Automation of rights-related processes as well as compliance management must be implemented. Enforcement of regulatory compliance, tracking and verifying transactions and conducting regular data audits is also crucial. Most modern ERP systems have built-in access control functionality, empowering manufacturers to allocate restricted user access.”

“Now-a-days the focus on enterprises is more on transactional security i.e. what users can do under authority is the major concern. Thus ERP systems need to comply to GRC Governance, Risk, Control with the need to provide role based access control, biometric or two-factor authentication, notifications or exception reports on suspicious activity and complete traceability with audit log,” said Kumar Vembu, CEO & Founder, GOFRUGAL, sharing his insights on the security aspect of ERP systems. 

WHERE IS ERP HEADED?

From a basic database management system, to a comprehensive solution that integrates all aspects of business operations, ERP has evolved tremendously. But where does it seem to be headed?

“Currently ERP mostly focuses on business operations rather than marketing, but in the near future this will change drastically with ERP trying to integrate itself more towards the social networking arena,” opines Parveen Kumar Sharma, CTO & Consultant – I.T., The Institute of Chartered Accountants of India.

Perhaps, the answer lies not in what ERP can potentially do, but in what the technology leaders can modify it to do. Technology knows no bounds, and the arenas that ERP can branch out to, is just an endless list of possibilities.

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