Why and how adaptive ERP is key to your business success
By Craig Charlton March 4, 2015
- One word can sum up what businesses are looking for in an ERP system: Agile
- An ERP system should be easily tailored to a business’ unique and specialised needs
IN a global marketplace where speed, change, and constant innovation give rise to greater challenges, the ability to respond nimbly to change is a strategic imperative.
No longer simply used as a production planning tool as in the past, ERP (enterprise resource planning) today needs to enable businesses to grow, take advantage of new opportunities, and avoid unexpected risks.
In 2014, we conducted a survey involving over 1,500 professionals in mid-sized companies across 10 countries.
From the survey findings, it was revealed that although an overwhelming 80% of the respondents agreed that ERP is critical to their business, approximately half described the performance of their current ERP system as merely “adequate” or “basic.”
What most agreed was important though, is the responsiveness of ERP in providing faster time to value with enhanced performance, scalability and ease of deployment, which will promote business agility and growth. It is the foremost desired outcome of ERP investments.
If what businesses are looking for in an ideal ERP system could be summed up in a single word, it would almost certainly be ‘agile.’
But what exactly does agility mean today? Used in the context of ERP, it can mean a whole host of functions and capabilities, from offering social collaboration tools; deployment flexibility; and single-system, cloud-based, operational peer, hybrid or multi-level approaches; to being accessible via a broad range of devices.
For this article, the aspect of agility that we will focus on is customisation – the ability for an ERP system to be tailored to a business’ unique and specialised needs.
Why adaptability is important
Smaller businesses often shy away from ERP because of budget constraints, and the fear that implementation, even if successful, will latch them into business processes that cannot be changed.
Whenever the systems presented in an ERP software differ significantly from the business processes of the organisation deploying it, the organisation has to make a choice of two options.
The first option is to have their business processes conform to the ERP software. However, this could mean spending a lot of time and resource on making major cultural, process and operational changes, adding more complexity and risk to the implementation.
The second option would be to build the organisation’s business processes into the system to meet its specific needs – however, this can also negatively impact implementation.
In fact, Panorama Consulting Solutions, an ERP consulting firm that regularly assesses the global ERP industry, found that 54% of ERP implementations take longer than expected and 56% exceed budgeted costs.
Thus, the choice between significantly changing existing business processes and creating a highly customised ERP system, can be difficult.
Luckily, some of the latest specialist ERP solutions are able to fill the gap, providing the best of both worlds.
Built on agile technology, these systems are in nature highly adaptive and allow for high levels of flexibility and customisation. They enable processes to be easily and inexpensively changed and enable users to simply modify workflows as business practices change.
Framework that allows for customisation
One of the primary reasons for the failure of some ERP implementations can be attributed to inflexible legacy ERP product architectures.
Panorama Consulting’s most recent report found that the two major challenges cited by organisations implementing new ERPs were poor ERP package selection and a poor fit between software and user procedures.
In manufacturing industries, customisation of ERP software is a necessity because most off-the-shelf software packages cannot meet the precise needs of most manufacturers.
Generic ERP software often lacks components specific and key to many manufacturing operations, such as the ability to handle multiple approved manufacturer lists that may be different, or to exchange documents with B2B (business-to-business) trading partners seamlessly.
Nearly half of the survey respondents (47%) adjusted their business processes to accommodate ERP functionality. According to the report authors, changing business processes to accommodate software functionality may weaken an organisation’s competitive advantage and eradicate business processes that differentiate the organisation from its competition.
The implementation of an ERP software with a customisable framework that allows for fast and effective configuration to specific business needs is therefore crucial.
With the provision of rich customisation capabilities, service behaviour can be redefined when ERP applications are made to match an organisation’s unique and specific business processes.
Having greater flexibility will enable the creation of new user experiences for maximising user productivity, such as by adapting ERP systems to become more user-friendly and easier for employees to navigate.
Besides these benefits, specific applications such as business process management and having a flexible framework for customisation can also greatly impact the speed of adaptability and performance.
Benefits of agile ERP software
Adaptive ERP software will go a long way in promoting collaboration, choice, responsiveness, simplicity and mobility. It will help an organisation to work better internally and externally, leveraging on the knowledge and experience of people and systems when they are connected together throughout the supply chain.
With the flexibility of customisation, it is remarkably easy to modify workflows as business practices evolve – a critical advantage in today’s accelerating and rapidly changing business environment.
For industries that deal with high levels of specifications and details, most organisations will require a certain level of customisation in their ERP systems to facilitate better workflow and business processes.
That is why selecting a highly and easily customisable ERP software with state-of-the-art services architecture is of utmost importance, as it is the underlying framework that allows for remarkable performance and flexibility, while minimising the risk of failure.
Craig Charlton is senior vice president of Asia Pacific Operations at Epicor Software Corporation. He is responsible for all facets of sales operations, representing Epicor’s ERP product lines in the Asia Pacific region.
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