Over the last few months we’ve come across a number of instances where legacy ERP is holding a company back. Whilst many organisations require a single monolithic platform for core processes, such as manufacturing and financials, ERP can hinder growth and negatively impact on costs when applied widely across an organisation.
Due to the importance placed on the investment in ERP systems and ERP providers, many large businesses do not take advantage of innovative technology to enhance the user purchasing experience. Prioritising investment in ERP processes at the expense of user adoption.
We have come across organizations where the answer seems to be to spend more with the ERP vendor. Rather than implement quicker, better and lower cost alternative solutions that are focused on user adoption.
Often Organisations are driven to achieve specific goals, and yet are hampered by existing enterprise wide technology platforms that are tying up procurement and user resources.
It’s usually business users within finance, procurement and operations who are trying to drive innovation, process efficiencies and savings within their business. These very groups that have been instrumental in the initial ERP investment need to see beyond this and look at how to enhance these solutions for the users.
Consider the following real life examples:
Example 1: No single view of customers
A large international marketing service manufacturing group has grown rapidly through acquisition. Each factory operates a different ERP or, at best, different versions of the same ERP. Historically, each site has operated in isolation and local management maintains the requirement for each site to own their specific customers. There is no single master customer record across the group, so customers have to deal with multiple and competing sales teams, complex ordering requirements and numerous invoices from the same organisation. Hence, the group fails to leverage its scale or ability to service the customer effectively.
Example 2: No single view of suppliers
A $10bn global packaging supplies business operates across North America, EMEA and Asia Pac. They have in excess of 80 different ERPs, each operating independently of each other. Suppliers, who trade with multiple sites, are likely to be registered with each location separately. The group has no easy way of aligning supplier data across the organisation – or to verify that the supplier information is up to date and accurate. The result is the group is unaware of its reliance on specific suppliers and has limited leverage when it comes to negotiating volume based deals.
Example 3: Too cumbersome, too expensive
A mid sized procurement outsourcing business operates a single module of a leading ERP. The module has run their warehouse for years, but is simply too cumbersome to operate, too difficult to use, too complex to integrate and too expensive to customise. The net result is, management are considering switching to a cloud based provider, which is lower cost to implement and operate, has the flexibility needed by the business, provides ready made integrations into the rest of the business and a user experience that drives adoption.
Example 4: Square peg, round hole
A large US based service provider operates a legacy ERP. The ERP was implemented over 25 years ago and since then, the needs of the business have evolved rapidly from manufacturing to service focused. The ERP has not progressed to support the need for clients, account managers and sales people to interface with the platform to get prices, track orders, monitor stock and view reports. Processing an order through the business involves multiple re-keys, resulting in frustrated employees, errors, time delays and ultimately lower margins. As the business has grown, additional technology platforms have been deployed, each reliant on interfacing with the increasingly outdated ERP. So the cost and complexity of maintaining the ERP is negatively impacting on the potential benefits of the newer technologies.
So, what’s the answer?
With the increasing range of focused cloud-based platforms available for most business operations – business leaders need to view ERP as just part of the solution. Cloud based technology can fill the gaps in process.
Clearly the answer depends on the needs of the business. For some, ERP is the backbone of their organisation – it is critical to manufacturing, operations and finance. They may see an opportunity to augment the solution. For others it’s a barrier to growth and needs to be replaced with a more user centric solution.
Of course trying to change will not be easy. Incumbent ERP providers, will see any additional solution as a threat to their relationship with the C Suite of the Organisation (and their significant ongoing maintenance contracts). They will counter any change at every opportunity.
Most cloud platforms integrate seamlessly with ERP, financials, HR systems, logistics, BI and other tools – so business leaders can focus on growth and profitability rather than software and process bottlenecks. With cloud based spend management, for example, executives can centrally control local spending anywhere in the world and in real time. Providing business leaders with a single unified view of their business data locally, nationally and globally.
So if your ERP is driving you nuts, speak to a cloud based platform provider focused on enabling users to procure and centralised control of suppliers and spend. Either with or without ERP systems, we have a solution that will encourage user adoption and save money…