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The changing face of ERP

Tom Paye | July 31, 2013
SAP IT expert explains how the automotive production line can be used to perfectly illustrate the need for enterprise resource planning (ERP) software in large enterprises.

One of the issues to tackle, it seems, is that, up until recently, it was only large enterprises that could afford to implement ERP systems. This was a shame for both vendor and customer -- it meant that the smaller business customer was missing out on an opportunity to streamline business, and the vendors were missing out on a huge chunk of the market (no one needs reminding just how valuable the Middle Eastern SMB market has become to vendors over the past five years or so).

To remedy the situation, vendors have since come out with cost-effective ERP solutions targeted at the mid-market. What's more, vendors that provide task-specific packages and add-ons to the overall ERP solutions have also jumped on board the SMB bandwagon. This means that smaller businesses really can get all the functionality that was once the preserve of larger enterprises, according to Ali Hyder, CEO, Focus Softnet.

"ERP solutions in the past were proprietary and very expensive and beyond the IT budgets of SMEs. However, this has changed. Vendors are now also developing and offering cost-effective ERP solutions to SMEs.  Most of the companies which were purely accounting packages providers, like Focus Softnet, Sage and Tally, upgraded their products and now have full-fledged ERPs for mid-tier markets," he says.

"SMBs look for solutions that are not only easy to deploy and use but also increase productivity and efficiency. The ERP solution deployed by the SMB needs to be adapted to the business rather than the business adapting to the solution. A number of vendors are now offering SMBs cost-effective ERP solutions that are flexible, scalable and easy to customise. A significant number of SMB companies are also looking at lowering total cost of ownership (TCO) by availing of the shared cost model in the adoption of business applications," he adds.

But bringing ERP into the future isn't all about tailoring solutions so that they can be sold to SMBs. According to Phil Lewis, Business Consulting Director, MEA, Infor, what made ERP solutions so popular in the first place -- the fact that they were one-size-fits-all technologies -- has since gone against the ERP market. He believes that ERP now has to change if it is to stay relevant to business, and therefore customer, needs.

"Monolithic, one-size-fits-all systems have worked in the past in providing good, centralised control, but now companies prize speed and agility -- the ability to change is critical," he says.

Lewis' view is that, for a truly successful ERP implementation, the vendor has to have industry expertise. He also says that ERP solutions now have to be easily integrated with other applications, as well as allow a decent degree of enterprise mobility.

 

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