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The Importance of Right-Sizing Innovations With Market Demands
By Doug R. Foster, Vice President, Information Technology & CIO, University of South Carolina
In my career, I have worked on numerous project initiatives relating to Enterprise Resource Planning (ERP) system implementation and management. But, there was one project which was the most interesting of all. This project showed me a different perspective on ERP. It was a project relating to supply chain management of food produces. What made their solution so innovative was that they started from the very edge, by focusing on specific business outcomes. For instance, they leveraged devices to monitor the growth of crops so that they could simultaneously plan the manufacturing process at the plant facility. The resultant outcome of the project was that there was a considerable improvement in the supply chain.
An evolving ERP Landscape
Initially, the ERP companies in the market lacked this kind of innovative vision. Although, from the start, they incorporated business modules such as finance and human capital management, they had a relatively narrow scope of business functionality. Their solutions were not able to supply the demands in the market. These ERP providers bought or built products and tried to integrate them into their solutions. Previously, several ERP platforms such as SAP had mainframe code, which was updated over the years to function in different environments such as in client servers like Linux, or even in the cloud. But, the integrations were still weak, unable to pass a robust amount of data back and forth between the modules.
ERP providers are trying to improve their functional areas to develop a one-stop solution for all the needs of customers. By doing so, they will surely add new dimensions to the business world and gain a broader scope in the market
Their scope of integration was very narrow.
Consequently, when they catered to the customers, they felt as if they were buying three or four different vendors’ solutions, as the integration of these solutions was not done properly. But, since the last five years, these ERP providers are taking a different approach to the integration process. They have understood that when clients choose them, they will always be struck by a question,” Do they build or do they buy and integrate?” Abandoning COBOL codes, ERP providers are building new ground-up platforms where there is a holistic integration of all the solutions in a single platform. Unlike their predecessors in the market, they are not merely taking an existing product and updating it. Many of them are developing it by themselves. Take, for example, the cloud ERP platform, Workday: they have reinvented their business by starting from ground zero. However, it is also essential that the ERP providers keep in mind that the innovations that they are implementing are in alignment with their change appetite.
The Scope of ERP Adoption
The ERP market is expanding rapidly. Customers have a tough time choosing the right partner. Still, while selecting the vendor, they should check if the ERP solution fulfills their organizations’ requirements. Choosing a provider who is doing something very radical from what others are offering in the market may put them at risk. Today, instead of ERP providers, many organizations are choosing ERP implementation partners. However, the caveat is that most of such implementation partners can be myopic in their vision with their focus only on their product-line, rather than services. They may lack the cross-industry knowledge necessary to provide a competitive advantage to the client. As such, the role of ERP providers is crucially vital for organizations.
In my view, the future of ERP providers seems bright. It is hopeful that one day, they will exponentially grow in the market, at a fast pace, similar to what the large cloud providers such as Microsoft, Amazon, and Google have achieved. For instance, with the cloud providers offering cloud computing for every industry, in the near future, it is likely that there would not be any application running on-premise. Cloud providers are gaining much popularity in the IT landscape, as they are providing a complete package of solutions that can cater to almost all needs of the customer. Similarly, ERP providers such as SAP and Oracle are already starting to develop their business by expanding their capabilities to meet the growing needs of the various industries that they are catering to. ERP providers are trying to improve their functional areas to develop a one-stop solution for all the needs of customers. By doing so, they will surely add new dimensions to the business world and gain a broader scope in the market.