How to get your business moving with next generation ERP

Profile picture for user kroberts By Kevin Roberts February 17, 2015
Summary:
To meet customer expectations, next generation ERP must be built on the right kind of cloud platform, writes Kevin Roberts of FinancialForce.com

Running man with digital background © Sergey Nivens - Fotolia
In an era of rapidly changing markets, empowered customers and connected workers, your business needs a new way to implement new business capabilities. You need to be agile, flexible and to measure return of investment in weeks not years.

Here at FinancialForce we call this ERP at Customer Speed. The IT function is no longer about simply 'keeping the lights on.' It is being asked to become an enabler of business agility and be 100% focused on supporting your company strategy – whether it’s exceeding customer expectations, driving revenue, controlling costs or winning the war on talent.

The speed and agility of your business is being tested not only in meeting your customer’s expectations but also in your ability to implement and roll out new capabilities to exploit new opportunities. It’s a race to find tools that will help you serve your customers better by providing complete 360-degree customer visibility, breaking down departmental communication barriers while driving improved process efficiency.

Whether it’s one app at a time, one process at a time or retooling an entire business function, it’s time for a new way to successfully manage a move to the cloud at the right pace and scope and with a clearly identifiable return on investment for your business.

'ERP at Customer Speed' means you don’t have to wait patiently and suffer the major upheaval of an old style ERP suite implementation. Instead you can focus on tackling key business initiatives in the order of priority you decide. At the same time you can prepare for future success through the adoption of a common set of tools and re-usable skills.

Last-century, monolithic ERP

The last wave of major change in ERP was driven by the technology shift to client-server and fueled by Y2K. It saw widespread adoption of full-suite ERP systems, where teams of implementation consultants spent months and years bending an organization's processes to fit the assumptions of the software design.

As we now know, the problem was that such bending often wasn’t possible without untold lines of complex code having to be developed to add custom capabilities. It could be successful but it was often painful and expensive. Project delays and missed deadlines were commonplace.

With so much custom code and every business running their own internal IT infrastructure, the delivered systems proved to be inflexible and often brittle and resistant to change. For many, the dreaded upgrade became something to avoid – due to the inevitable business disruption and cost of expert services incurred simply to ensure existing systems kept running as before.

The elapsed time before buyers saw a return on their investment was often measured in years as business value only started to appear once the entire suite had been rolled out and the business in its entirety had adjusted its processes to fit what their chosen ERP system imposed. Sometimes that return on investment never materialized and sadly some projects ended up being dissected in detail in the courtroom.

This system inflexibility and an understandable resistance to keep up with upgrades directly impacted an organization’s ability to react to new market opportunities. New lines of business could be prevented simply because the supporting ERP, initially selected to support one business model, didn’t support any others. A manufacturing company thinking of adding a service offering to support sales of their core product were dissuaded by IT on the grounds that “the system couldn’t do it”.

Post-modern ERP, one step at a time

Kevin Roberts_GM Platform and Alliances_FinancialForce.com
Kevin Roberts, FinancialForce

So we know that legacy ERP systems are holding businesses back. But we also know that a rip-and-replace of an entire ERP system takes too long and would be simply too disruptive to core business functions. It feels like we’re caught between a rock and hard place here. However there is a strategy that provides the agility and innovation required to compete in today’s markets yet gives IT a core, common technical architecture on which they can rely to support their transformation to become an enabler of company-wide goals and strategy.

Configurable ERP applications running on enterprise cloud platforms provide the tools to quickly solve business issues such as billing, services delivery, spend management, revenue recognition, quoting and ordering – without disruption to their core business functions such as financial reporting, cash management and treasury. Companies adopting this approach are solving business problems and exploiting new opportunities quickly and seeing measurable return on investment before moving on to tackle the next problem.

They are choosing to move these processes to the cloud because they’ve seen those platforms enable success in their sales, marketing or call center operations. They are looking to leverage the same technical skills to deliver new business capabilities in the same familiar user interface and security model. It’s a sound approach because it means they are solving a current business problem but not creating a complex mix of different technology stacks that would get in the way of solving future problems.

That’s important because a short term rush to implement a point solution (even if it is in the cloud) might shoot you in the foot on other projects as you create separate siloed databases, multiple logins and ask your employees to wrestle with different unfamiliar user interfaces .

Companies are tackling issues with their existing ERP and prioritizing the order of play based on their business strategy. For some, tackling billing, ordering or professional services has enabled major improvements in customer service and driven revenue. Others have seen back office efficiency improvements through the automation of revenue recognition and spend management processes. In some cases, entire functions such as supply chain, human capital management and finance have moved to their chosen cloud platform. Again the projects have leveraged existing skills to ensure a quick return on investment and the focus is on point and click configuration to fit the organization’s business – not widespread custom coding.

Ultimately organizations choose the pace, the timing and the scope of what processes they choose to move off their legacy systems and into a modern cloud deployment. It can be one step at a time, a couple of steps in one go, or a leap up the stairs in a single bound.

Balancing platform and business priorities

Your choice of platform is key to enabling this flexible, agile, one step at a time strategy. Cloud in itself does not enable this and it’s entirely possible to build a cloud ERP system which is just as inflexible, restrictive and brittle as we saw in the last century. This new approach requires a platform that provides a set of core business services which can be leveraged across your business. When moving applications, processes and business functions you need to ensure consistency in the following areas:

  • Security and Data Privacy
  • Identity
  • User Interface
  • Audit Trails
  • Workflow and Approvals Engine
  • Reporting, Dashboards & Analytics
  • Mobility
  • Enterprise Social notifications, actions and collaboration
  • In-house Development Tools

With all of these capabilities in place as common services within the underlying platform, you can be confident that each new business process or function – regardless of whether it’s supplied by a 3rd party software vendor or built by your own in-house team – will be supportable, secure and able to grow with your business while adhering to your corporate compliance standards and policies. That’s essential to maintain business agility, otherwise new projects will be held up or stalled by risk management concerns – not to mention how important a familiar user interface is to a successful rollout of a new system function.

Effective rollout of business system change only works with widespread user adoption and “old school” workers are quick to scurry off back to Excel and e-mail if new capabilities don’t immediately make life easier. While to get the attention of your generation ‘Y’ employees you’ll need your systems to automatically push notifications onto their own choice of mobile device.

Speed of rollout doesn’t have to come with a hefty price tag for in-house resources. The right choice of platform also enables you to run a lean IT support function whose skills can serve the needs of your entire business with a single toolset covering reporting, dashboards, workflow & approval process management, mobile device configuration and centralized security profile maintenance. This also enables business agility as your IT team can remain focused on meeting the needs of the business rather than having to learn a new toolset each time a new application is implemented.

All of this embodies our philosophy of ERP at Customer Speed because customers today demand agility and responsiveness. You have to run your business systems on a platform that allows you to meet those demands.

Image credit: Running man © Sergey Nivens - Fotolia.