How modern ERPs scale (and traditional ones don't)
Post-modern ERPs are flexible, marrying the power of the ERP with its need to ebb and flow with business demands, says Bernard Ford, CEO of One Channel.
Scale means your ERP has the capacity to run large jobs. But, among post-modern ERPs, scale means doing that for a lot less and bringing much more to the table, including vertical integration, data intelligence and customer satisfaction...
It's the end of the month and that payroll is due. This massive job will consume a lot of time and resources, but you know the ERP is up for it. As a first-grade business application, it was bought with batch jobs in mind, able to take on major workload demands that periodically surface in every business.
Traditionally, this is what 'scale' was: the capacity of an application to handle large amounts of work at once. Scale is still valid today, but post-modern ERPs add a lot more to the definition. "Scale isn't just about volume anymore," says Bernard Ford, CEO of One Channel. "It now also applies to an ERP's reach and other additional capabilities. Today, scale can refer to the ability to reach more users and niches inside the business, adding services, and connect to the information on the ERP."
ERPs predate smart devices and even the Internet. They were arguably the first major attempt to aggregate company data in order to improve the speed and intelligence of businesses. The first ERPs focused on manufacturing and soon worked through the prism of finances. But, it was fundamentally an inward-looking service.
Over the years, this crucial application has grown to involve more company verticals. It also slowly added customer-facing features. But, while the blueprint of a new breed of ERP had come into focus, the tipping point came with cloud systems. Suddenly, ERPs are able to deliver on its many advantages in a much better, faster and more streamlined way.
"The cloud has matured ERPs. Old ERPs are a bit like a mining truck: they are big and very powerful, but if you are not hauling massive loads, they can also be cumbersome and uneconomical. Cloud platforms have allowed function and form to come together. So, now an ERP is a mining truck when you need one, a bakkie when you need to do something smaller, and even a golf cart if you want to show someone around."
In Ford's example, the golf cart can be the customer-facing services, such as someone querying an invoice via a Web portal. Post-modern ERPs are very flexible, finally marrying the power of the ERP with its need to ebb and flow with business demands.
This was not possible before. To own an ERP meant making a high-level investment in the underlying hardware.
So, even if the ERP was doing something simple and undemanding, it didn't mitigate the cost of the infrastructure, which was bought to meet the highest demand scenarios. In many cases, ERPs would simply consume computer resources and staff time, pushing all other priorities aside while they churned on a massive workload. But, hardware doesn't need to be purchased, thanks to multi-cloud and hyperscale environments. Those scale as demand grows and the business only pays for what it uses, utilising platforms such as Microsoft Azure and Amazon AWS.
Another advantage with cloud-native post-modern ERPs is that they are much easier to augment with new services. Services on traditional ERPs tend to be bolted on after the fact, but on new ERPs, it is very easy, and sometimes free, to integrate a service such as chatbots, electronic document signing, even e-mail. This means integrating business verticals, their processes and the services that support them is a lot more practical without long-term customisation headaches.
The trends of big data, IOT data and external data are placing additional demand on ERPs. Traditional platforms simply cannot keep up with these new requirements. It's something Ford has seen time and again:
"A lot of my career has been alongside ERPs. They are always evolving because the companies that use them are always changing and expanding. They are getting better. But the boost that cloud has given ERPs is a really big deal. Today's definition of scale is one where you can manage large batch jobs, create customer portals, ingest data for reporting, access services via mobile phones, start using AI and much more."
In other words, an ERP's ability to scale is about a lot more than handling large workloads. It's about the business's most central application being able to adjust to all manner of demands and requirements, big or small, in the most economical and efficient ways. It's what makes the business flexible.
Traditional ERPs can't do this, but with cloud-native post-modern ERP platforms, such agility is just the beginning.