Deploying an enterprise resource planning solution is often considered the pathway to business agility. The thought process is straightforward enough: Organizations that deploy an ERP system get the real-time visibility into data needed to make decisions quickly. Because companies have data on hand, they can change and shift based on operational and market demands. Presto, your business is flexible and adaptable at any given time.
Unfortunately, it isn't that simple. Establishing versatile ERP capabilities depends on underlying ecosystems that allow for frequent change and customization. Many monolithic ERP systems aren't capable of handling that type of input without excess overhead. At the same time, modernized cloud solutions can be so dependent on their underlying infrastructure and platform configurations that companies can't readily alter the system architecture.
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Achieving true ERP flexibility hinges on being able to adjust the interface and application components of the ERP freely and easily. Typically, this involves making deep changes to underlying code and databases, a costly and time-consuming process. Leading solutions are changing this through more flexible core architectures, improving the way the ERP setup operates and creating a higher degree of user freedom.
The case for an ERP investment
Implementing and managing an ERP solution can be a major undertaking, so much so that some businesses could easily be intimidated. However, the value potential is substantial. A landmark Aberdeen Group study, for example, found that ERP solutions that achieve average performance will typically provide a 6 percent reduction in operational costs, 8 percent reduction in administrative costs and major benefits to operations. These include a 91 percent achievement level for complete and on-time delivery and inventory accuracy.
When looking at the top performers in the ERP space, this same study found that the rate of complete and on-time delivery increases to 94 percent, with inventory accuracy reaching 93 percent. Cost reductions include 19 percent for operational expenses and 22 percent in administrative areas.
Even average ERP solutions typically provide a 6 percent reduction in operational costs
The benefits of an ERP solution are clear, but the pathway to achieving those advantages isn't necessarily as straightforward. This is where the discussion around flexibility comes into play, as organizations must carefully assess how adaptable any ERP software suite they are considering can be.
Considering the ERP flexibility issue
At its core, an ERP system is designed to provide a centralized repository of enterprise data that makes information accessible to users in line with the processes they are completing. This is accomplished by creating a robust database that can house and organize information, delivering it to specific ERP applications that users can access.
For example, ERP solutions are invaluable in supply chain management because they allow stakeholders across divisions – purchasing, vendor management, accounting, warehousing, etc. – to all view the same data in the same place. In this case, the ERP database would be configured to integrate with solutions, such as barcode scanners or external accounting software, used by different teams to compile data.
This ease of storing and accessing data is invaluable, but it requires deep integration between the ERP and various business systems. It is also essential to organize backend data workflows to align with processes. These issues put the limitations of many ERP solutions into perspective. CIO magazine explained that many organizations run into trouble leveraging an ERP system effectively because it is difficult to adjust the system in light of business process or organizational change. The need to create custom code and migrate data can also present major barriers to rolling out an ERP platform.
All of these issues stem from inherent flexibility limitations. Adjusting an ERP setup after your business processes change, for example, depends on being able to easily update interfaces. In most ERP systems, this requires writing custom code to adjust the core architecture. If you go through an organizational change, you'll need to deal with new processes.
ERP solutions allow stakeholders across divisions to all view data in the same place
In essence, ERP system flexibility and business adaptability are interwoven with one another. If you are locked into a legacy ERP suite because your system is behind on updates, then you lose flexibility. A truly elastic ERP solution will allow for easier day-to-day changes and enable you to avoid lock-in. This is only possible with modernized systems built specifically with flexibility in mind.
ERP solution frameworks and their impact on flexibility
Traditional ERP platforms reside on premises, installed on enterprise servers and managed on site. These solutions are typically available out of the box with a variety of modules and options, but businesses will often customize them heavily to accommodate their specific process demands. This is the traditional format for ERP solutions, and the large-scale, complex platforms require a great deal of maintenance and management.
In many cases, a company that implements a standard ERP on-site will need to spend heavily on consulting and development to ensure the ERP is effective in practice. Deployment can take months and ongoing maintenance and updates are needed to prevent lock-in. It can be very difficult to move on from such a complex ERP setup as, after years of use, it will be entrenched in a business.
Cloud ERP solutions are solidifying their role as replacements for these traditional systems. Forrester found that the cloud is becoming the dominant delivery model for ERP solutions and many traditional ERP vendors are beginning to move into the cloud. While the cloud offers a great deal of potential, it also comes with some flexibility limitations of its own.
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The cloud allows for the easier mixing and matching of ERP capabilities. Many solutions are built in a modular way, letting companies easily add new functions to the system without having to make backend changes. However, these modules generally function within the same overarching ecosystem, meaning you can't make subtle, process-specific alterations without extensive programming work within an open-source cloud ERP. In simplest terms, a cloud ERP offers more big-picture flexibility than a traditional solution, but still comes with numerous challenges when it comes time to refine the system to your specific needs. In some cases, you simply can't alter the underlying data workflows or interfaces in a cloud ERP setup.
abas is eliminating these longstanding limitations through a multi-tiered ERP architecture that offers the modularity of the cloud, but with much easier flexibility.
Driving flexibility through a multi-tiered ERP
The abas ERP solution is built with three tiers: the database, the user layer and the interface. In this setup, you can alter the interface to align it directly with your business processes without having to change any of the data systems. This means customization is easy because you don't need to manipulate the entire ERP setup to make a small process change. If you need to personalize the database or alter variables, you can do that without having to migrate data.
By segregating our ERP solution into interconnected tiers, we allow customers to make alterations without the extensive programming or system-level changes that would otherwise be necessary. As our system is delivered through the cloud, you get the modularity of selecting modules and capabilities based on your specific operational needs. At the same time, the way our platform is separated into tiers allows you to customize each level of the software without having to make related alterations elsewhere. The result is true ERP flexibility.
When your ERP is versatile enough to be changed without significant cost or operational overhead, you are then able to adjust your business processes and models as the market demands. That is ultimately what we are about at abas. We believe technology should help people work at their best. If your technology is limiting your adaptability, your people will be stuck dealing with legacy processes or data sharing limitations that limit productivity. With ERP flexibility in place, your employees are empowered to operate at their best at all time.
The enterprise world is going through a period of rapid and systemic technological disruption. With new solutions, ranging from artificial intelligence to the internet of things, emerging on the marketplace at a blistering pace, organizations need flexibility so they can constantly adapt and adjust. The abas ERP system can fuel that degree of elasticity.
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