ERP in the cloud

Cloud-based business solutions underpin a shift to the next wave of digital technologies. What does this mean for ERP?
Read time 7min 20sec
Deidre Fryer, product manager at SYSPRO.
Deidre Fryer, product manager at SYSPRO.

Take a moment to think about all the core processes needed to run a company – from HR and finance to supply chain, procurement, sales and so many others. Enterprise Resource Planning (ERP) solutions act a bit like the glue between all of these processes, bringing everything together and integrating it all into a single system. But this is ERP at its most basic. Modern technologies – like machine learning and AI – take ERP a step further by providing a broad range of intelligence, efficiency and visibility across all areas of the business. 

One innovation that is having a significant impact on the ERP space is cloud.

When it comes to ERP, cloud is the way forward, says Pradeep Roy, cloud advisory lead for Africa at Accenture. While he admits that all companies should move at their own pace – ensuring that all changes they make are compatible with and beneficial to their core ERP processes – Roy believes it’s becoming clear that the benefits of cloud (cost, security, customisability and so forth) are too compelling to ignore. In fact, Forbes research reveals that as much as 70% of all software, services and technology spend will be cloud-based come 2020.

The Fourth Industrial Revolution is all about businesses operating from anywhere without any restrictions, and a cloud-based ERP solution allows different teams to access data anytime, anywhere and using any device with internet capability.

Companies have been cautious of cloud for some time, especially when it comes to their more specialised applications, says Brendan Haskins, CTO, Tarsus On Demand. “But cloud has proved its worth and ability over and over again.” Cloud-based ERP systems enable high availability, increase security and performance and make disaster recovery more effective. There are also so many ways to optimise and improve how ERP platforms run, which gives each business the freedom to tailor their ERP system to meet their needs.

Is the ERP era over?
According to Forrester Research, modern, specialist SaaS platforms will replace on-premises ‘omnisuites’. The model of a single integrated solution to handle every process for every division within the enterprise doesn’t work, for many reasons, says Forrester. Instead, application development and delivery leaders need a new, eclectic strategy based on a range of modern, open, smart, flexible SaaS platforms. The most successful SaaS platforms will be specialised so that best practices can be embedded into the solution, AI can be applied to automate processes and innovate ahead of market trends.

Many of the business leaders running on-premise ERPs will attest to this fact: legacy systems with heavily customised ERPs make administration and updating immensely challenging, says regional director for SAP Southern Africa, Cameron Beveridge. “The large ERP systems of yesteryear have left many organisations without the agility to meet modern market demands and have complicated the process of adding new functionality to fulfil modern job roles.”

Matthew Kibby, enterprise VP for Africa and the Middle East at Sage, shares this sentiment. Legacy ERP solutions typically had large price tags and a range of hidden costs – from investments in hardware infrastructure and software licences to ongoing support and implementation costs. With Software-as-a-Service (SaaS) or cloud-based platforms, organisations can benefit from a simple per user, per month cost. This means a robust business management solution is now within reach for companies that may not have been able to afford one in the past.

According to Sumit Kumar Sharma, enterprise architect at In2IT Technologies, modern cloud-based ERP systems have become a big part of business’ digital transformation strategies. Technologies like AI or chatbots may have previously been implemented and managed by the business itself, but this is no longer the case. Nowadays, vendors that provide cloud ERP solutions also provide an array of these new-age solutions that can be easily integrated into the business. 

Coupled with these technology-related changes come new ways of using ERP solutions, notes Keith Mullan, an industry veteran. ERP is no longer just for the financial team. With tablet and smartphone access, ERP can be used across the board by in the field sales and service teams to warehouse packers.

The customer experience

Customer experience has become a battleground for brands. “Succeeding in an experience-led market means being hyper-focused on the customer and being flexible enough to offer new, connected experiences that change to accommodate individual needs,” states Accenture’s Roy. Cloud-based ERP systems allow companies to understand their customers better by consolidating all records and activities in a single database. In addition to this, cloud-based ERP creates better customer-centred workflows by integrating financial, marketing, sales and service functions so that the business has a clear picture of how well or how poorly they’re doing at different points during the sales process.

When it comes to customer experience, great cloud ERP solutions offer increased automation through next-gen tools like AI-enabled digital assistants, says Beveridge. In line with this, Deidre Fryer, a product manager at SYSPRO, believes that growth in the AI space is bringing about enormous changes relating to the everyday business functions of ERP.  And as a result, there’s less need for human intervention to execute business-critical tasks. When tasks like bookkeeping, stock management and deliveries are automated, the business doesn’t need to hire extra people to fulfil these roles, there are fewer errors and existing staff can rather focus their attention on making sure their customers are happy.

But it isn’t only about external customers. Having a rich user experience leads to faster and more accurate decision-making, improves productivity and increases employee buy-in, says Beveridge. Kibby agrees. Seek out a solution that gives employees the ability to access data anytime, anywhere and on their preferred device, he advises. The user interface should be clean and tailored to the employee using it, no matter where they are in the world.

A boost for small businesses

Let’s face it, technology plays a critical role in any organisation’s ability to evolve and grow, notes Fryer. For small businesses, technology acts as a tool they can use to compete with their larger and more well-established counterparts that already have a formidable customer base and a strong market presence. “In a world full of applications, small businesses are always looking for the next best solution to assist them with growth,” she says. For example, cloud-based ERP systems that easily integrate with other systems minimise the time and hassle related to installing and configuring equipment. In doing so, these solutions make it possible for smaller businesses to focus on their daily operations instead of having to worry about managing business infrastructure.

Why cloud?

For SAP’s Cameron Beveridge, there are many benefits of cloud-based ERP. Generally, these can be classified along five distinct lines, namely:

1. Faster return on investment or value realisation for IT and business;
2. Increased agility, which helps the business to consume innovations with minimum effort and adapt to dynamic business needs;
3. Lower total cost of ownership through simpler, faster and less expensive deployment, configuration and maintenance;
4. Improved governance and compliance, which delivers value to the business beyond just the technology; and
5. Greater intelligence embedded within the ERP system. This acts as a ‘co-pilot’ that eliminates repetitive tasks and makes suggestions based on business patterns and employee behaviour.

Choosing a cloud-based ERP system empowers small businesses to reduce their operational costs and increase scalability. It simplifies monitoring and compliance relating to regulations like PoPI and GDPR. Additionally, says Fryer, it allows smaller ventures to enjoy greater speed to market.

One of the biggest benefits of cloud ERP solutions has to be the significantly lower burden on business owners, managers and their employees to administer IT systems, adds Gerrit Olivier, CEO of About IT. Rather than having to waste time, effort and money dealing with IT issues typically beyond their traditional scope, businesspeople have access to functionality they’ve never been able to afford before and have more freedom to focus their energy on running their businesses.

While migrating to cloud is a huge trend at the moment, businesses must not underestimate the gravitas of the decision, cautions Sharma. Any organisation considering a migration must first assess where they are on their ERP journey and they should create a clear vision and strategy for migrating to cloud. Before implementing cloud-based ERP, take the time to understand what your chosen vendor does and does not offer, he continues. That way you will be able to understand any potential process gaps and can minimise the need for customisation.

Start with a detailed business case that aligns with the company’s vision and objectives, says Sage’s Kibby. It’s not enough to say you want to become more efficient or profitable; you must have a business case that maps the investment to the specific business outcomes you wish to achieve. Ultimately, the key objective for any organisation – be it a large enterprise or a startup – in the digital economy is value creation, Beveridge says. The right cloud ERP solution should help organisations realise real value, but also shorten the time it takes to deliver that value.

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