While packages vary, they typically encompass accounting, sales, procurement, supply chain management, manufacturing operations, and project management. As the various modules are integrated, they help the organization plan more efficiently, streamline budgeting, and report on financials.
In other words, ERP packages tie together many organizational processes and establish procedures and workflows. They are regarded as a core application of the enterprise. Perhaps their most critical function is arriving at a single source of truth for the business by collecting and unifying transactional data across multiple functions and sources. This aggregation enables everyone in the company to be able to look at the same set of data.
Here are some key points for those in the channel offering ERP packages or planning to add them to their repertoire.
ERP Has Changed
Early systems occasionally earned a reputation as being cumbersome and difficult to implement. Modern systems, however, are often cloud-based and far easier to deploy. They are also tailored to a great many industry verticals and market niches. Packages are available, for example, for retail, manufacturing, warehousing, construction, automotive, food and beverages, pharmaceuticals, and more. These comprehensive packages provide plenty of opportunities within the channel to help customers implement the key applications and functions businesses need to manage their operations.
Another development in ERP has been integration with customer relationship management (CRM), business intelligence (BI), and analytics systems. Packages are available that bring all these elements together on one screen to improve the user experience.
ERP and Digital Transformation
Digital transformation is top of mind in many businesses. Business leaders seek to bring together information from different sources to create a unifying digital thread throughout the organization. Many organizations will reach out to channel partners to help them with digitization initiatives. These businesses often encounter the challenge of managing their transformation efforts while continuing to run day-to-day operations. It can be difficult to innovate while introducing so much change. This is a key area where partners can help. Technology partners can engage with the business and help leaders understand that agile organizations must innovate while avoiding disruption to day-to-day operations.
ERP provides a way to simplify — and unify — the application mix. In some ways, this function of bringing unity to the application mix is what ERP has been doing for years. But digital transformation takes it to the next level: it becomes a way to transform the business and unleash innovation.
Finding the Right Balance
Businesses need help to find the right balance between continuing to run critical processes while undergoing innovation that will lead to expansion. It is inevitable, therefore, that channel partners will run into resistance in the broad implementation of ERP packages. Some business applications have served companies well for many years. Organizations are understandably fearful that digital transformation may negatively impact processes built around these custom applications.
But if these applications reside on-premises, a business will lack the agility it needs to adapt. Organizations must embrace the move to the cloud as an opportunity to gain a competitive advantage. This transition is where the expertise of channel partners really adds value. They provide the bridge between keeping the lights on today and building a solid foundation for the future.
Customization vs. Standardization
In the past, ERP packages underwent heavy customization. Businesses demanded that vendors adjust their ERP packages to match existing processes. This had some workability for on-premises deployments. But it came at a cost. Every year or two, when the vendor upgraded an ERP suite, IT had to spend countless hours coding and integrating to maintain the various customized functions (or hire expensive consultants to do the heavy lifting).
The paradigm has shifted. ERP vendors have spent decades fine-tuning their packages. They contain the combined experience of hundreds of deployments in each vertical and market segment. Best practices and industry know-how are now baked in. Therefore, those in the channel should encourage their clients to avoid large-scale customization of standard cloud-based ERP packages.
Yes, some customization may be needed. But it’s best to keep it to a minimum. By adjusting organizational processes slightly to fit standardized packages, the benefits of ERP are magnified, and the total cost of ownership is significantly reduced. Upgrades are simple by keeping the core of the ERP package standard, patching and maintenance are streamlined, and moves to a new version can take place without downtime.
Using Industry Ecosystems
Although standardization is vital, there is still room to tailor the ERP environment to business requirements. Vendors have established partner ecosystems that offer many niche solutions for different industries. Service providers should take advantage of these offerings to add value and satisfy demands for ERP customization. Instead of changing the ERP suite to bring in a specific type of analytics, look for a partner solution that adds the necessary functionality. Applications within the ecosystem use standard APIs to connect seamlessly to ERP suites. As well as analytics, APIs are available to connect for robotic process automation, machine learning, CRM, and many other areas. Channel partners should aim for the ERP suite encompassing 80-90 percent of business processes. Partner applications will supply the remaining percentage – with service providers as the glue that brings everything together.
Top Management Buy-In
Before engaging in an ERP-based digital transformation project, channel partners are advised to gain buy-in from the very top of the organization. Experience shows that organizational pushback can be expected from some areas of the business. Some leaders will try to hold onto familiar processes and applications and argue that change is too disruptive. Others are hesitant about a change of any kind. To succeed, the project needs to be supported and driven from the top down.
Mobin Sayed is Senior Director within the Energy Utilities and Chemicals industry vertical at Capgemini. He has 25 years of experience in helping organizations with business transformations enabled by ERP packages and other technologies.