From the time it was invented in the 1970s, ERP was always thought to be for large, industry-leading companies. Ones that have the money and bandwidth to purchase, implement and support on an ongoing basis.
The cloud changes that.
It puts advanced ERP technology in the hands of small and large companies alike, without the need for significant upfront or ongoing costs. That means that, for growing companies, they can access the same capabilities as their larger competitors, out of the box and at a reasonable cost, enabling them to better compete in their industry.
We are at the point where every company needs a cloud-first business strategy. Only in the cloud can you harness the potential of the latest innovations, technologies such as AI and compliance with sustainability regulations. Only in the cloud can you keep up with the pace of business and the changing demands and challenges you face. And only in the cloud can you predict and identify risks and opportunities and respond at the speed of business. This will be the main focus of an upcoming webinar “Industry ERP Best Practices for Growing Companies”.
In this article, we will discuss some of these best practices to consider when implementing a cloud strategy:
1. Ensure a Clean CORE to keep up with the speed of business
Historically, with legacy on-premises ERP implementations, there was a tendency to replicate what was done in the past. We built all the functionality and processes we wanted into the system at the time of implementation. As a result, as business processes and needs changed, adding functionality required expensive customization, and these customizations made upgrading to the latest software version costly and time consuming.
With Cloud ERP the onus on the software provider to build best practices into the solution as a standard, not just for specific line of business level but also for specific industries. On the other side, the company using the software is encouraged to leverage these capabilities and best practices and minimize customization by enabling a “clean core” approach. Then, as their business evolves, grows and morphs along with economic realities, disruptions, and opportunities, they can take advantage of the latest innovations, regulatory updates and localizations that the software provider delivers.
2. Enable and leverage clean ERP data
Making business decisions and recommendations is hard if you don’t have or can’t rely on the data from your ERP system.
Trust in the data is the first step. A follow-on benefit of standardized processes and a single shared data model across the process areas, is that it not only makes the processes more efficient, but it also makes it a lot easier to analyze the data to better plan and run your business.
We are also seeing technologies such as AI and machine learning helping us both automate mundane repetitive processes, but also providing recommendations, and identifying risks and opportunities to the fingertips of users to better run the business.
3. Cater to different stakeholder needs
If you ask 5 executives from 5 different departments “what functionality you want from an ERP system” you will probably get 5 (or more) different answers! The reality is that they will have specific requirements, but they will also be involved in business processes which require collaboration across departments. And these answers may vary across industries that have their own industry variants.
The reality is that it has been estimated that most companies can leverage “out of the box” capabilities for 80 – 90% of your business functions. The key is to identify the non-differentiating capabilities and processes and capabilities and implement standard industry best practices. Then focus on the 10 – 20% that differentiates you from your competition.
Take, for example, Invetech – a design engineering business in the medical technology space from Australia. They have been leveraging SAP S/4HANA Cloud Public Edition’s e out-of-the-box capabilities from start to finish to eliminate bespoke, internally built systems, and purchase order systems. By utilizing its manufacturing capabilities in SAP S/4HANA Cloud Public Edition, they derive benefits for complex professional services, Kanban systems, and deep-indented costed BoM, thereby increasing their revenue and company growth. They have also been using the AI capabilities available in SAP S/4HANA Cloud Public Edition to focus more on analytics, not just processing.
To learn more about the best practices for leveraging cloud ERP click here to attend the webinar Industry ERP Best Practices for Growing Companies.
