This is the second post of a series on Next Generation ERP. If you missed the first in the series, take a moment and read it here.
If you are running an older ERP solution, especially those implemented prior to the year 2000 (Y2K), you may not even be aware of what you can expect from a modern, technology-enabled, next generation ERP. For many, many years ERP selection was largely driven by fit and functionality. Even today, Mint Jutras ERP Solution Study survey respondents put fit and functionality close to the top of the list of selection criteria (ease of use was number 1).
As a result, the footprint of ERP has grown steadily, to the point where it is sometimes hard to figure out where ERP ends and other applications begin. But it isn’t the depth and breadth of functionality that qualifies an ERP solution as “next generation.” It is the underlying technology. And conversely, it is that new technology that enables ERP footprints to expand at an accelerated rate.
Unless you are a technologist (and most business executives are not), you might not know or care about that underlying technology, because you don’t understand it. But it is dangerous to ignore it simply because of what it can do for you. You don’t know how the USS Enterprise achieved warp speed, but you know that it can. You don’t know how the transporter beam works, but you know what happens when Captain Kirk says, “Beam me up, Scottie.” You don’t need to know how the development platform allows your solution provider to deliver more innovation, but it is important that you understand the potential. It is far less important to understand how this new technology works than it is to know what it can do for you.
The New Basics
The “basics” of ERP used to be defined by basic functionality required by all types of companies. Basics usually referred to core modules of ERP: general ledger, accounts payable, accounts receivable, order management, purchasing and inventory control. For manufacturers it also included MRP and the basic requirements to schedule, create and manage production orders. Those modules are still important today but “basic” functionality has become somewhat of a commodity. Forty-three percent (43%) of survey respondents to the 2013 Mint Jutras ERP Solution Study would consider purchasing core ERP functions like a monthly utility and realigning their selection team to focus on the remaining “value-add” to produce strategic or competitive advantage, or simply to cut costs.
Basics now extend to include some advanced technology modules like work flow, event management (triggers and alerts), process modeling and enterprise portals. Yet, unlike basic functional modules, which are fully implemented by the majority of our survey respondents, these technology basics, including business intelligence and analytics, are still largely under-utilized – even as we gain ground in adoption.
Table 1: Advanced Technology Modules – Fully Implemented
Older legacy solutions may not even include these technology options in their portfolios, but any next generation ERP certainly will.
What else should you be looking for? Without fully understanding the technology platform upon which “next generation” ERP solutions are built it may be difficult to recognize them. Here are a few hints you can listen for as vendors describe their offerings: service oriented architecture, object-oriented data models, event-driven and/or message-based technology, semantic layers, mobility, rules engines, in-memory databases, HTML5 and XML. What all these boil down to are new ways of engaging with ERP, ease of configuration versus customization, better integration capabilities and new ways of delivering innovation.
New Ways of Engaging with ERP
Traditionally users have engaged with ERP through a hierarchical series of menus, which require at least a rudimentary knowledge of how data and processes are organized. Hopefully this organization reflects how the business processes and the enterprise itself are structured, but with a hierarchy of menus, there are no guarantees. And therefore there are no guarantees that navigation is intuitive or that business processes are streamlined and efficient.
Next generation ERP attacks this very real problem by making the user interface more intuitive and more personalized. It has been hypothesized that Star Trek’s communication devices inspired the first mobile phones, which of course evolved into today’s smart phones and tablets. Now with the introduction of so many consumer applications on mobile devices, we have all become much more demanding of user interfaces. It’s called “the consumerization of IT” and it is a very real phenomenon. We demand truly intuitive screens and touch technology.
Next generation ERP has responded to these demands with web-based access, making ERP accessible anywhere, anytime with an increasing number of functions available through mobile devices. Touch technology is making its way into the hands of ERP users. Look for this to become more pervasive and for more devices to be natively supported.
And don’t forget enterprise search functions. It is not entirely clear when “Google” became a verb, but that is indeed how we use the term today. We’re very accustomed to conducting Internet based searches on topics and questions. Next generation ERP supports those same search capabilities within its own structured data, adding a level of context not previously available. Next generation search capabilities embedded in ERP can tell the difference between searching for Phillips, your customer, and a Phillips head screwdriver.
New ways of engaging with ERP have put “Ease of Use” at the top of the leader board in terms of selection criteria. But “Ease of Use” means much more today than just an intuitive user interface. Mint Jutras 2013 ERP Solution Study participants were asked to select their top three priorities for ease of use. Results are shown in Figure 1.
Figure 1: Top 3 Most Important “Ease of Use” Issues
Source: Mint Jutras 2013 ERP Solution Study
Yet how an accounts payable clerk or a material handler interacts with ERP is (and should be) very different from how an executive decision maker engages. Line of business executives will likely keep tabs on the pulse of the business through a select number of key performance indicators (KPIs). Next generation ERP will present a customized, graphical view of those KPIs but also allow the executive to drill down to successive levels of detail. Those customized views will combine ERP with other tools including email and productivity tools such as Microsoft Office and even chat functions that can record instant messaging “conversations.” And they will be available on a myriad of devices.
In the next part of this series we will explore customization versus configuration and tailoring to be followed by a section on innovation and integration.