Enterprise resource planning systems, or ERP systems, help many companies manage a variety of functions, from supply chains to human resources and finance. Over time, however, ERP systems have evolved into complicated, inflexible structures that limit the benefits of digitization.
Companies are implementing innovative solutions not only for particular operations but also within the whole management system of the enterprise at all stages. One of the IT solutions most demanded by manufacturers is smart planning tools that help optimize companies' inventory and resources. Due to the integration of automated ERP systems, it is possible to quickly monitor the demand for materials, equipment, and staff, to minimize manual labor on the procurement, supply chain, production management.
The ERP market remains in the phase of rapid expansion: Software Market Research
has estimated that the total market size will exceed $49.5 billion by 2024. ERP systems upgrade and develop, improving performance and user experience. The inflexible and monolithic ERP systems of the past were the result of the long-time customization and M&A when different software modules had to adapt to each other. This software helps manage organizations but delays the development of more flexible ways of operating and the implementation of digital and cloud solutions
The new opportunities
that have emerged in the market help managers reduce the risks associated with implementing the ERP platform and integrating it into other applications and operations. The next-generation ERP systems not only aimed to deliver efficiency but will also provide adequate analysis and forecasts.
Most companies need adaptable systems to react to consumer demands and new possibilities on time. Next-generation ERP systems are associated with more industry-specific cloud
and third-party offers. By liaising with old systems that power the company and using flexible microservices, renewed ERP systems provide companies with a competitive advantage.
Improved Analytics and AI
In current architecture, the ERP core is often small, and it works with the backbone of the best third-party SaaS solutions. Most ERP software work locally or in a private cloud that supports system updates and IT solutions (machine learning, internet of things, data analytics) on time. The control process can be patterned and optimized through IT, which reduces the cost of output, and gives accurate continuous transparency of its origin and paths of passage. Contemporary ERPs have a high ability to work with other applications and programs. Systems that register and process all data in production processes online, monitor compliance with laws, directives, regulations, and individual requirements, and can confirm all material flows in supply chains
Today, innovation is required to optimize management and decision-making, with a focus on obtaining more accurate quality data on the processes and the feature of in-depth analytics through AI.
Availability and Easy Deployment
Cloud solutions have made ERP available even to small-scaled companies that want to harvest digitization benefits. The quality ERP platform is demanding for server hardware, and cloud providers are ready to provide affordable solutions. According to Panorama Consulting
, the number of SaaS and cloud computing deployments is 85% compared to 15% of local deployments starting in 2018.
Overtime, the savings only increase and become more visible. According to the research by the independent analyst firm Hurwitz & Associates
, the total cost of ownership (TCO) of cloud ERP systems for 4 years is 50% lower than the cost of owning local ERP solutions.
Migration to the cloud has become more available. Cloud infrastructure is suitable for small and medium-sized enterprises that do not have a large-scale IT infrastructure. Moving from the company's servers takes a few days.
Cloud ERP Has Become More Well-built
The resilient cloud infrastructure ensures that cloud services continue to operate even if there is a breakdown. Data centers of advanced providers are united in a single fault-tolerant network - all essential elements are preserved and replicated in several copies. There are various overlapping power and cooling channels. So, the chance of losing data due to a failure or failure is lowest. All major cloud providers improve their data security: hire data security specialists, install expensive software and complicated hardware, connect blockchain, and distributed architectures
. It turns out that the data in the cloud is even more invulnerable than on the company's servers.
Every year there are more and more successful ERP projects in the cloud computing market. Not only high-tech companies but also large production companies move their ERP to the clouds.
People Have Changed
In recent years, the technical level of technology has made much headway. For a contemporary industrial manufacturer it is not a challenge to find a technical solution. It is much more difficult to understand how to embed a technical solution in the management process. When it was possible to cope with data migration, lack of necessary settings, and training of users, it turned out that people could not come to terms with the system.
Employees are used to the fact that they can make inconspicuous corrections at any time and break the deadlines without consequences. ERP, in turn, forced them to be more accurate and punctual. At first, instead of following the new rules, the company was a mess. The employees passed the buck to their colleagues, making unfortunate decisions. Over time, these difficulties have gone away. It is not just about maturity and fine-tuning the ERP system, but also about people. They have changed. Employees are now aware of the value of their actions and feel like part of a unity.
A dynamic contemporary business environment needs a fundamentally new technology platform built on less voluminous, less expensive, independent, but fully-integrated applications. Today, CFOs are transitioning from inherited diverse systems to integrated ERP platforms, to a combined but open environment. The new systems should provide not only integration but also flexibility. Customized and simple interconnected tools are becoming a more global ERP business model, in which established management frames become eventually disappear altogether. Digital transformation
is not a turn-on but an evolution that companies around the world are experiencing. It is crucial to learn the nature of these changes not to be left behind.