Best Practices: 10 Trends in ERP Implementation
Enterprise Resource Planning (ERP) software has undergone significant changes since its earliest incarnations. ERP has historically consisted of monolithic standalone systems dedicated to specific business processes found, for instance, in early Manufacturing Resource Management (MRM) systems1. These implementations were limited in scope and restricted to local instances unlike the distributed systems in use more recently. That sort of system did not last in the fast-paced world of today’s digital agencies.
Current ERP solutions are more flexible and configurable than ever, with many ERP vendors moving to cloud-based solutions. These systems can be upgraded and configured on the fly with little to no need for on-site support. Alongside this shift toward configurability and flexibility afforded by cloud solutions, we’ve also seen a broader movement to integrate a range of innovative contemporary technological paradigms. For instance, with the use of the cloud, many vendors have begun to conceive of ERP as a SaaS rather than a traditional licensing model. Other offerings include increased integration of data and analytics, which can help improve productivity, more tiered ERP services, security features, support for mobile devices, the Internet of Things, and the use of Artificial Intelligence.
Overall, many of these trends can be attributed to a significant change in the landscape of the ERP vendor industry. Particularly, we’ve seen a movement away from yesterday’s monolithic ERP behemoths and toward the possibilities introduced by smaller industry players and startups. It is because of these “disruptors” to traditional ERP solution models that we’ve seen ERP integrate many of the advances that erupt in other areas of the tech industry while also offering novel innovations that stand on their own. Here we outline ten of the top trends occurring in the ERP landscape today, especially as they apply to digital agencies.
1. Cloud solutions
With the fast-paced nature of today’s digital landscape, the ability for your ERP solution to be distributed, scalable, and configurable on-the-fly has become perhaps more important than ever. Recall, for instance, Forbes’s recent description of today’s ad industry as The Agility Era,2 a phrase that poignantly captures the industry’s need for flexibility and on-demand configuration. This designation comes into particularly sharp focus when choosing an ERP solution. You need to be agile and flexible. The cloud helps to facilitate this need in unprecedented ways.
Note, that the shift to cloud-based ERP solutions didn’t fall out of the sky. The trend has been emerging since the mid-1990s wherein, rather than concentrating on enhancing core functionality, ERP companies are moving toward reconfiguring their systems for cloud compatibility. As Frank Scavo, president of management consulting firm Strativa, explains, “Many companies are finding it easier to add in cloud-based point solutions for things like human capital management, CRM [customer relationship management], expense management and other functions.”3 With the cloud, such improvements can be thrown in ad-hoc with minimal to no downtime.
2. SaaS systems
As part and parcel of the move to the cloud, many ERP solutions have begun to operate through a software subscription model or as a Software as a Service, or SaaS. For digital agencies, this adds an important layer of convenience and flexibility over a traditional software licensing model. With ERP delivered as SaaS, many of the time-consuming software pitfalls like site-wide upgrades, security issues, and costly user provisioning, are reduced or eliminated altogether. As Pcmag explains, “Traditional ERP applications are stored on your servers, which means you’re responsible for upfront hardware costs, long-term hardware maintenance and expansion, and data backup and recovery. SaaS-based apps are stored on cloud-based servers, which are much less expensive, much quicker to update and scale, and don’t take up any valuable office space”4. By using a multi-tenant SaaS model, your ERP is fully scalable and grows as your agency increases in size, impact, and productivity.
3. Data Utilization
The move to the cloud has also allowed the broad-level use of data to improve ERP functionality. Imagine a customer relationship management software that is capable of building sophisticated models of your highest performing customer demographics and then integrate this information across your agency’s business operations. Or perhaps you’d like to base a proposed HR investment in business development on analytics that relate BD employee performance with overall profit figures. These are only a few of the applications that become possible with a robust ERP solution that integrates powerful data sources for a competitive advantage.
Such possibilities based on the integration of data in ERP solutions will only continue to expand. As TriCore Solutions CEO Mark Clayman noted, “Having powerful, cloud-based platforms allows companies to use predictive analytics and analyze business operations more closely.” He continues, “Companies are just now skimming the surface of what’s possible when aggregating data from outside their company—pooling information from suppliers, for example—to make real-time operational adjustments”5.The best advice for marketing and ad agencies: start utilizing data in your ERP solution today.
4. More tiered services
As digital agencies grow, some will adopt multi-tiered business structures. If your agency does not already have an HQ and subsidiaries, the prospect may be just around the corner, or it may remain for some time a distant goal. Traditionally, ERPs have not addressed these tiered structures directly; ERP functionality was generally the same regardless of which business hierarchy was using it. Over the years, though, many have asked how an effective ERP solution could better support such a tiered business structure. Thankfully, ERP systems have begun to fully support such tiered structures, for instance, by offering specific services to the top-tier headquarters and others as designated for the operation of subsidiaries6. Regardless of the size of your agency, you’ll want to seriously consider the benefits of future-proofing your operation by choosing an ERP solution that supports tiered services.
Alongside the increased dependency on cloud-based connected ERP solutions, the need for intelligent and reliable security has grown exponentially. Importantly, the shift toward cloud-based ERP solutions has occurred alongside a sharp increase in security threats across the board, creating a potentially alarming demand for security as an integral component of an effective ERP solution. Cyber attacks, in general, cause immense irreparable damage. Estimates have put the total global cost of cybercrime at roughly $6 trillion by the end of 20217. A trend that will be increasingly important for agencies is the prevention of such cyber attacks, especially where an ERP system is involved.
6. Artificial Intelligence (AI)
AI has been a driving force of the rapid transformation of technologies across industries, and the ERP landscape is not exempt from these changes. Broadly speaking, AI is a field of computer science that is concerned with the modeling of human cognitive processes for use in any and all computational applications. The implications for ERP systems are innumerable, in that virtually every ERP component can utilize AI for performance enhancements and improvements in integration and productivity.
Take, for instance, the use of AI for improving customer relationship management. According to a noteworthy CIO article, “An AI-enabled ERP solution for customer service integrates the customer interaction with the work order management process. The AI solution understands and learns from historical inspection reports and work orders.” The article explains further, “Depending on the nature of the customer inquiry, it gives a proposed answer to the service agent. The AI solution assists with the planning and scheduling of the work by finding the earliest possible date to dispatch a service technician,” which is possible because the AI agent knows the required skill set and availability of the required parts.
7. Mobile device support
For those of us who have used smartphones on a daily basis now for years, it may be somewhat difficult to comprehend why mobile support is considered a new trend for ERP solutions. Why is it that seemingly every other form of computing and communications tech has received a mobile treatment, while ERP mobile support has been scarce to nonexistent? To understand this, one must keep in mind that Enterprise Resource Planning software is, first and foremost, enterprise software. This means that some of the trends found in modern consumer products are applied to a different timeline in the enterprise world. Fortunately, the time for ERP to support mobile devices like smartphones and tablets has now finally arrived.
8. Internet of Things (IoT)
Not unlike artificial intelligence, the Internet of Things has had profound implications for almost every sector of an industry. IoT refers to the proliferation of devices, products, and objects that are connected to the internet. What this means for ERP systems is that your entire infrastructure—including hardware, physical systems, and even employees—can be monitored and tracked. The data produced through this process can then be integrated into the functionality of the ERP system. Want to track how often a workspace is used in your ad agency to help determine future infrastructure plans? A room equipped with sensors and biometric tracking can provide real-time analytics to help with critical resource allocation decisions. Such a scenario represents only the beginning of possibilities that will arise with IoT.
Many of the recent and forthcoming innovations on the ERP landscape’s horizon, as noted above, can be attributed to the dynamism introduced by the increased presence of startups. The push toward cloud-based solutions, for instance, has come to a large extent from smaller ERP startups whose cloud-based features have, in turn, influenced larger vendors to follow suit. This is an example of the phenomenon that occurs when a smaller company is able to use their flexibility to their advantage by fulfilling a unique position in the marketplace.
“The bigger vendors are increasingly trying to be everything to everyone, which creates opportunities for startups to fill unmet needs in specific industries or functions,” Panorama Consulting founder Eric Kimberling has explained. “In other words, they are often able to use their focus to position themselves compared to the larger players uniquely.” Such a situation is doubtless a boon to marketing and ad agencies, who continue to benefit from the kinds of rapid innovation we see regularly from startup disruptors.
10. Empowered users
Enhanced ERP features related to cloud-based services, SaaS systems, data integration, tiered services, security, AI, mobile devices, and IoT all mean that ERP users are more empowered than ever to make smart choices in selecting an ERP solution. With the introduction of new startups to an ERP landscape formerly dominated purely by large-scale vendors, the result is a more rapid turnover of new features and competitive functionality.
An equally valuable shift is the decrease in cost for ERP customers. As Amit Patel, managing director in the enterprise solutions business at Huron, has explained, “ERP vendors are being very aggressive in protecting their core offering and, as a result, pricing models are being updated to ensure they remain competitive9. This means that customers now get not only the best features but also receive comprehensive ERP features at highly competitive prices.
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