Today’s robust ERP solutions are essential for manufacturing companies to map and integrate a range of critical processes, and further manage them through Cloud Computing.
by Mitalee Kurdekar
“I don’t need a hard disk in my computer, if I can get to the server faster,” Steve Jobs, co-founder and former CEO & chairman of Apple Inc., once said. He went to add that carrying around non-connected computers was byzantine by comparison. Years later, these words ring truer than ever before. A case in point is the swift evolution of enterprise resource planning (ERP) solutions, especially with the latest development of add-ons made possible by Cloud Computing and the Internet of Things (IoT). These tools are all coming together as new offerings in the form of SaaS (Software as a Service). And any manufacturing company worth its salt will tell you that modern-day ERP software is proving to be indispensable to their operations.
In fact, ERP solutions today are not confined to implementation within an organisation’s campus. With capabilities provided by faster machines, networks and internet-based platforms, the task of interacting with resources outside the campus by binding them to forge integration for one common business advantage has become a reality now. The efforts involved in achieving this objective are enormous, but not insurmountable.
After all, imagine the power of scaling up gradually, as opposed to the usual fear of large capital investment in advanced ERP platforms and modules. If your business requires an application to connect your stakeholders and generate more sales, you either develop or get one developed as a SaaS. If that does not work, you can drop it, and move forward to another one at a nominal cost. Jobs’ words seem almost prophetic when one looks at these developments. With the growth in mobile devices and ease of Internet accessibility from remote locations, there is no need for local storage as one can remotely access stored data at the click of a button.
An enterprising tool
Given the varied needs of manufacturers, many major ERP vendors are working on an array of options for their clients. Oracle offers a complete portfolio of business applications across all functions, and has developed solutions for the back office, supply chain, logistics and warehouse, human capital management, sales, services and marketing, and many more. Ajay Kumar, senior director, sales consulting, ERP & EPM, Oracle India, articulates this by saying, “Our approach has been to create a complete set of capabilities across business applications (SaaS), platform for development of new capabilities (PaaS) and, infrastructure for reducing the complexity of managing IT workloads in house (IaaS).”
Also, as a result of this approach, ERP solutions have moved away from only being the domain of large enterprises who could afford huge investments in hardware and software, to smaller firms who utilise it based on their limited needs and means. With this kind of concept now trending in the ERP world, the size of the enterprise using these solutions does not matter.
In fact, while the manufacturing sector enjoyed a successful 2017 with both discreet and process industries benefitting from favourable business conditions, ERP application within the sector too increased as a consequence. Vendors and service providers have developed and successfully implemented new features and technologies. Many of these were ERP-enabled data-driven automation processes that exploited the power of information and knowledge drawn therefrom to drive businesses in a more integrated fashion than achieved thus far. Investments in compact hardware and value-added software were more need-based rather than as a packaged solution. This modular development helped enterprises to remain nimble, while increasing visibility and flexibility in their operations and creating competitive advantages for themselves. This has enabled quick investment payoffs with ROI improving significantly.
Explaining how ERP implementation has evolved within his company, V Venkatanarayan, VP and site head, FTO-3, Dr Reddy’s Laboratories, states that the company has gone through a long journey of implementing ERP. Today, with the help of Suryamohan Surampudi, senior director, IT, and his team, the entire organisation is running on ERP. “We have implemented almost all modules including quality management processes, which are very critical to the pharmaceutical industry. Our suppliers are connected through a system called Supplier Relationship Management (SRM). This system has a tight integration with the back-end SAP system. Being in the pharmaceuticals industry, our doctors are our primary customers and our sales representatives use a Customer Relationship Management (CRM) system to carry out e-detailing for the doctors. This system is also connected with the SAP system.”
Delphi-TVS Diesel Systems has gone down a similar path when it comes to their use of ERP. S Ravichandran, executive VP & plant head, Plant-III, Oragadam, Delphi-TVS Diesel Systems, suggests, “Having gone in for ERP (SAP), we have successfully reached the set requirements within a short span of time, and have seen improvements planned in many areas of concern. Utilisation of information technology has gone beyond the boundary of the organisational entity, and extended to receiving and sending information to the supplier and customer/external agencies. We have also used IT in various business process automations.”
It’s all in the Cloud
Cloud Computing is already being seen as a key enabler for modern-day ERP applications in terms of empowering businesses for success. This is evident with many leading ERP vendors in the global arena offering Cloud Computing-enabled versions of their ERP software. These include Oracle Cloud, SAP S4HANA, Microsoft Dynamics 365 etc.
Thiru Vengadam, regional VP, India, Epicor Software, believes, “The advent of modern technologies such as the Internet, mobile, wireless, and indeed the consumerisation of IT have all changed enterprises’ expectations of what can be achieved. Focus has shifted from the functionality of software (what it does) to the strategic importance (what it can be used for). Modern ERP systems support companies that want to build a competitive advantage by providing the right people with access to the right information at the right time, so that they can make the best decisions to support growth.”
Pointing out the benefits of Cloud Computing, Vengadam proclaims, “The benefits that a Cloud-based ERP solution provides are quite compelling, particularly when the unique challenges of many small and lower mid-market manufacturers are well understood. They are quick to master and easy to use. There are no hardware and software upgradation costs. Most importantly, no large cash outlay is needed, and affordable subscription pricing is offered instead.”
It is easy to see then that Cloud Computing is a great enabler, even when it comes to empowering a person/company situated in a remote part of the globe, given that they can access, compute and analyse the data through Internet connectivity. As Kumar points out, “ERP Cloud solutions have matured rapidly in recent years. Most of the large organisations are already using some ERP in one form or other. Today, when we look at the full spectrum of ERP, we see organisations extending the core ERP to adopt Cloud-based applications to add value to distinctive business processes such as production monitoring, vehicle scheduling, maintenance management, and above all, valuable real-time insight into business that can be used for decision support.”
The concern though is that add-on software and Cloud storage are yet to be proven to be safe, when compared with on premise data storage within a controlled environment. Though this is proving to be a hiccup, most experts feel that the Cloud Computing capability in ERP systems will be a sought-after trend from 2018, going forward. To address this, Kumar adds, “Very few organisations understand that professional levels of security provided by the Cloud service providers, along with rapid advancement in business IT capabilities, can enable a higher degree of data security, with greater business benefits than they could implement otherwise.”
Trending Technology
Overall, traditional ERPs are making way for intelligent ERPs. An intelligent ERP is designed to provide futuristic capabilities like IoT, Artificial Intelligence (AI), the ability to communicate with machines and learning from the same, and supported by analytical tools to create intelligence out of data and information. Vengadam explains, “One of the key opportunities for ERP solutions is to become far more responsive and useful to its customers alongside the development of the Internet of Things (IoT). In the near future, every aspect of a manufacturing and engineering company’s business is set to be revolutionised with IoT technology. Machines are becoming increasingly connected, as are transportation and logistics networks, as well as sales channels. As people, processes and businesses become more connected, the need to speed up data collection, interpretation and dissemination grows.”
Arising from these capabilities, one trend noticed is that global majors of ERP are facing stiff competition from the providers of SaaS applications such as ERP. This means that the price advantage to their customers is a welcome trend. Another trend that is now gaining ground is that ERP solutions are becoming more mobile. Today, with the world going mobile with smartphones and tablets, certain information needs to be available on mobile platforms for enterprise executives, particularly sales team members, while they are on the move. These technologies are now being made available in ERP applications, which would go increasingly mobile, over time.
With so much now possible with regard to ERP systems, the maxim ‘one size does not fit all’ is gaining recognition. Organisations are looking to implement ERP packages at their headquarters or major locations, while working with SaaS applications elsewhere. With no barriers on system and platform compatibility, such varied applications can now work well together in a single enterprise. This scenario of a hybrid ERP is an interesting change that will result in a paradigm shift in how businesses are run. And given the robustness of new-age ERP systems, this can only be a good thing.