Shifting Priorities in ERP Selection

  • Wednesday 4th November 2020

If there’s one thing manufacturers want in the near future, it’s stability. However, with COVID-19, a global recession, and political uncertainty, a steady-as-she-goes outlook isn’t in the cards any time soon.

ERP

Even before COVID-19, manufacturers faced significant challenges, including global competition, fluctuations in the supply chain, shifts in consumption patterns, and a shortage of skilled workers. Today, the pandemic has exacerbated these issues and brought new challenges to the forefront, including the need to safeguard employees against infection through remote work and social distancing.

What can be predicted is ongoing, fast-paced change. To cope with this volatility, companies need ERP systems that enable them to swiftly adapt to emerging conditions. This requires an ERP with unrivaled flexibility and highly customizable capabilities. Due to these factors, we’ve seen priorities shift in the ERP selection process with five criteria emerging high on manufacturers’ requirements:  

Real Cloud

Believe it or not, companies are still attempting to navigate between “real” cloud solutions, and those only masquerading as such. This is because some legacy ERP vendors cloaked their solutions to look and sound like a cloud system when it’s really just a hosted version of an on-premises system.

In actuality, these “mock” cloud solutions have not made any architectural changes to satisfy the essential characteristics of cloud computing. Instead, they’ve self-proclaimed their hosted offerings as “cloud” or “SaaS,” hoping to entice those shopping for a cloud option.

Some legacy ERP providers have gone a step further, cloud-enabling some portion of their solution. For instance, they may have added cloud-based point solutions, such as travel and expense management or time reporting.

Further complicating the matter is the fact that there is a range of cloud ERP solutions. Some are “more cloud” than others, meaning they more fully exhibit cloud computing characteristics.

As a result, the choice between cloud ERP and hosted ERP is not binary—there’s a range of options, and a buyer must beware and discern where along the spectrum a vendor’s cloud offering actually falls.

A Platform Approach

While the benefits of on-demand, low-maintenance cloud solutions are clear, some companies have simply gone overboard with too many cloud-based point solutions. The resulting mish-mash of systems, coined a Frankencloud, can create chaos.

Companies end up with each cloud solution having different tools for reporting, workflow, and customization. The clouds have different user interfaces and aren’t easily integrated with one another. Worst of all, databases are siloed, making reporting and analytics more difficult. Concepts like a “360° view of the customer” and a “single version of the truth” are difficult to attain.

To avoid this scenario, companies are now establishing a cloud-platform strategy upfront. Years ago, companies did this by deciding on a technology stack comprising of hardware, operating system,s, and database technology for a unified approach. Similarly, companies today must standardize on a common cloud platform and implement apps on that platform when and where possible. This will minimize integration, data fragmentation, system administration, and the need to manage various toolsets.

For instance, ERP should reside on the same platform as CRM, so then they can share the same data model. This works well for manufacturers, as they naturally have a need to share sales and production information for better forecasts and planning. Combining ERP and CRM on one platform goes a long way toward simplifying the cloud stockpile, especially if additional apps and capabilities can be leveraged on the same platform.

Low-Code Technology

We started by discussing the importance of customizations to adapt to today’s volatile conditions. Customization is critical in this environment, especially as consumption patterns change, supply chains are disrupted, and customers still demand quality and service. ERP systems can help in all these areas, but only if it’s fine-tuned to a company’s specific needs.

The trend is that companies want to put more customization in the hands of business users, who are the ones with firsthand knowledge of what’s needed on the front lines to optimize processes and improve customer experience. This is why low-code technology has been emerging as a solution. It gives users customization power because it requires little to no knowledge of software code. Instead, system administrators, power users, and business users can be deemed “citizen developers” within a company. In this role, they can turn a generic system into an ERP uniquely designed for their businesses.

With low-code customization capabilities, they can create screens, mobile apps, workflows, analytic capabilities, and more. Citizen developers can perform these functions because low-code ERP offers a visual approach and drag-and-drop ease of customization. The graphical interface allows citizen developers to draw from a library of tools, data, and process steps when assembling their desired ERP configuration.

For example, low-code lets companies embed predictive analytics and AI into apps and business processes. AI-powered analytics enables business users to automatically discover relevant patterns in the data – without having to build sophisticated models. Within apps, AI can help users determine the next best step to take in a process. In this way, users might spot opportunities, predict outcomes, and get recommendations to improve business outcomes.

Mobilizing ERP

Manufacturers are realizing that mobile apps can help them put ERP capabilities into the hands of frontline workers, customers, and suppliers, and they can even address the need for remote work required during COVID-19.

First, with the low-code customization discussed above, companies can more easily build tailored apps and workflows. Mobile apps essentially make an ERP operate more like a consumer banking app than a complex legacy system. Companies can roll out apps to support a specific function, and these apps are so intuitive that users don’t require much if any, training. For instance, companies can implement the following capabilities via mobile apps:

  • Provide sales reps with a smartphone app with one-tap access to their customers’ most recent orders.
  • Give warehouse managers detailed order information when they’re out on the floor.
  • Guide quality-control staff through an incoming materials inspection.

A low-code ERP vendor delivers mobile app and process flow templates “out of the box” with the solution. These starter templates can be configured to a company’s needs and quickly rolled out. In this way, templates become tailor-made, and companies essentially take an off-the-shelf ERP and make it their own. Of course, companies can also create their own apps from scratch, but they have the benefit of business rules and governance guardrails to create within certain constraints. In this way, they have flexibility, but they also won’t make a mess of the system.

Building Online Communities for Real-time Communication and Collaboration 

Many companies want the ability to quickly launch and bring to life distinct communities of suppliers, customers, distributors, or other trading partners. Low-code can quickly facilitate this type of community online, which is connected to the ERP’s data model. As a result, it’s easy for manufacturers to share appropriate information – such as orders, invoices, or cases – with designated community members.

For example, high-tech products, such as electronics or computerized devices, are intricate to manufacture – and managing the supply chain is equally complex. A supply chain organization (SCO) for such products might require materials from dozens of suppliers around the world. To efficiently manage interactions and coordinate logistics, the SCO could use a community builder, which is part of a low-code toolset, to quickly erect an online supplier community.

The SCO could configure data security, so suppliers wouldn’t be able to see one each other or one another’s orders. So, supplier A could only view its orders, not the orders for supplier B, and vice versa. This type of security is easily configured on the backend, as the SCO defines who sees what – and what data is kept confidential.

Through the online community, the SCO can also enable suppliers to access dashboards, so they can monitor their own inventory levels and performance. For example, suppliers can see their rate of on-time orders and late shipments, as well as the next orders they should be preparing. Similarly, the SCO can view the health of its overall supply chain.

A Custom-Fit ERP

Manufacturers have been under pressure to do more with less and to satisfy increased customer demands, all of which have been complicated and intensified by COVID-19. Obviously, the needs of a confections company will be different than that of an aerospace manufacturer. A sophisticated ERP vendor recognizes this and has built-in the agility to allow such companies to tailor the system to fit their businesses.

Real cloud ERP built on a common platform offers a single solution to meet today’s challenges — while low-code customization enables companies to more easily roll-out mobile apps, streamline processes, embed AI, and create online communities. Altogether, these capabilities maximize a company’s return on investment. And as market and COVID conditions continue to evolve, companies can adapt accordingly, as they’ll have the technological flexibility to help them do it.

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