Trends in ERP
Can you talk about ERP without using acronyms? Of course not – but it’s not a trick question. As one of our most common and cherished acronyms, “ERP” itself could almost have invented the TLA (the three letter acronym for three letter acronym).
Of course, it’s not that simple – ERP acronyms aren’t always three letters; and sometimes, the same letters may have different meanings to people from different industries. How confusing is that if you’re new to ERP or manufacturing?
The thing is, the humble TLA -- and other ERP acronyms -- represent a common language. Used appropriately, these expressions allow us to communicate ERP functions and benefits quickly and effectively.
Test your ability to “speak ERP” -- how many of the terms on the list below can you translate?
How many did you know immediately, without thinking? 14 or more? WOW! You must be an APICS founding member! 12 or more? Very good, you have definitely been around the block in the ERP world and know your stuff. 8 or less? You’ll need our handy Strategic ERP Acronym Translator below:
API: Application Programming Interface -- A protocol intended to be used as an interface by software components to communicate with each other.
ATP: Available To Promise -- The uncommitted portion of inventory or planned production available to be promised to new orders. ATP calculations can be used to verify whether an order can be filled within a specific time frame given other demands and currently scheduled supply orders. For example, during order entry, this lets you determine whether inventory will be available to meet a customer’s needs before you commit to a promise date.
BI: Business Intelligence – Software applications and technologies used to analyze an organization’s raw data and transform it into meaningful and useful information for business purposes. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting. Companies use BI to improve decision making, cut costs and identify new business opportunities.
CIM: Computer-integrated manufacturing -- The manufacturing approach of using computers to control the entire production process.
CRM: Customer Relationship Management: -- A widely implemented strategy for cultivating and managing your interactions with customers and leads. Provides a fully functional sales and marketing automation toolset designed to improve sales and marketing productivity, including communications and scheduling tools, pipeline and forecast management and customer service.
CRP: Capacity Requirement Planning -- Ensures that the resources, both equipment and personnel, are available to execute the plan. Together, an achievable high level production plan is achieved maximizing efficiency, and driving scheduling, procurement and execution.
EAM: Enterprise Asset Management -- An integrated plant operation solution that enables companies to operate plants more smoothly by keeping equipment running at the lowest cost. EAM manages planned and unplanned equipment maintenance, including calibrations, manages procurement of MRO inventory and manages capital asset project costs.
EDI: Electronic Data Interchange -- The direct transfer of data from one computer to another without the use of paper. EDI provides a streamlined method for managing communications between trading partners, including an end-to-end integration broker for B2B communications.
MRP: Material Requirements Planning (MRP) -- Addresses the need to ensure that materials are available to produce items at the correct time to meet customer delivery needs.
ROI: Return on Investment -- A performance measure used to evaluate the efficiency of an investment; calculated by dividing the benefit (return) of an investment by the cost of the investment; the result is expressed as a percentage or a ratio. Calculating the expenditure for an ERP project is fairly straightforward -- determining the gain is more difficult, because so many key benefits of a successful ERP project are intangible and unquantifiable. Tangible ERP ROI benefits include reduced costs and increased throughput; intangible benefits include things like regulatory compliance (invisible if you get it right, costly if you don’t), accuracy and process improvement.
SaaS: Software as a Service -- Delivering software over the Internet or “Cloud computing”; often associated with a “Pay as you go service”.
SCM: Supply Chain Management -- Integrates supply and demand management within and across companies. It includes important variables such as the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities. SCM can also include coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers and customers.
SOP: Sales Order Processing – In ERP, SOP does not mean standard operating procedure. The process where customer orders are received, checked for creditworthiness then for product availability; and arranging for delivery to customers is done; finally billing and maintaining records of amounts due from customers is carried out.
S&OP: Sales and Operations Planning -- A decision-making process that realigns the tactical plans for all business functions in all geographies to support the company's strategies, business goals, and targets. A process led by senior management that evaluates and revises time-phased projections for demand, supply, product and portfolio changes, strategic projects, and the resulting financial plans.
TMS: Transportation Management System -- Provides a complete set of tools to optimize shipments by air, sea, parcel, truckload or less than truckload; provides international documentation and assists in compliance with denied party regulations.
UI: User interface -- The parts of a computer and its software that the user can see, hear, touch, or talk to; the set of all the things that allow user and computer to communicate with each other. Like any good communication channel, a user interface is a two-way street. The best user interfaces are the ones users don't have to pay much attention to. When an interface is easy to use, users can spend their time doing work instead of looking for the right button or key. It's almost transparent--users can see right through the interface to their own work.
ERP has come a long way in the past few years, evolving in unanticipated ways with technologies and in the marketplace. Cloud computing, mobile technologies, and social media mean new opportunities and challenges for the enterprise systems.
ERP still does what it has always done well. ERP collects, manages and distributes information across the enterprise to drive efficiency, quality and productivity. By breaking down information barriers to cooperation and collaboration between critical business functions, ERP helps companies accelerate time-to-market, shorten lead times, reduce costs and improve customer service.
Now that ERP survived the Mayan apocalypse, here are several ideas to consider for improving your ERP in 2013:
ERP in the Cloud – The cost benefits of migrating to a cloud-based ERP make it well worth considering for all companies. Cloud-based solutions and services are easy to deploy, integrate and upgrade -- and they don’t require additional investment in IT infrastructure and staff. Bringing your business into the cloud can be especially beneficial for businesses that anticipate rapid growth, have limited IT infrastructure, seasonal spikes or multiple locations.
Powerful Analytics - Today’s advanced enterprise analytics empower organizations to anticipate change and react effectively to shifts in the dynamic business environment. Integrated analytics capabilities extract and enhance the data in your company's ERP to help you make smarter decisions, faster.
Mobile ERP - To stay competitive, companies are rapidly moving toward a more mobile enterprise model. Mobile ERP tools help companies create better ways for end users to access and interact with information. With mobile ERP apps, mobile workers get easy access to powerful functionality and real-time data anywhere, any time.
Social ERP - As the next generation of ERP systems emerges, social applications are proving their value in connecting businesses internally and with customers. By facilitating collaboration and communication among employees and partners using your ERP system social ERP tools can enable them to proactively solve business problems together.
Easier Configuration - Leading ERP applications provide a full set of functionality and pre-integrated modules, and optimized interfaces – that means configuration is much less costly than it has ever been. Next-generation ERP solutions allow organizations to quickly create new processes, improve existing ones, and add functionality as the needs of the business change. As the need for enhanced functionality increases, these capabilities can be "turned on" for little or no additional license fee.
Today’s ERP solutions deliver return on investment almost out of the box, with easier configuration, cost-effective cloud-based options, and sophisticated analytics. Mobile and social alternatives can help users deliver better service levels and improve productivity. These solutions offer enterprises of all sizes unprecedented opportunities to drive business performance and competitive advantage.
It’s just evolving to meet the needs of your 21st Century business
Well, the “death of ERP” has been predicted for years now. But, like Paul McCartney, Madonna, and many others whose demises have been prematurely reported, ERP is still with us -- and just getting better.
A recent Forbes.com blog post on the topic claims that ERP was designed specifically for 20th century manufacturing businesses, and is too “rigid” to adapt to 21st century technologies and services-based business needs. The article states that today’s economy “demands new ways of both measuring and monetizing customer relationships. Companies must break out of the shackles of ERP if they are to succeed in this new world.”
The fact is, the established principles of ERP systems are being converted to new deployment methods like SaaS and the cloud, and to new devices like smart phones and tablets. ERP is rapidly evolving to emulate flexible, scalable subscription offerings like Saleforce.com and others. Rather than shackling businesses to antiquated models, today’s ERP gives companies greater freedom than ever to collaborate, communicate and leverage information for competitive advantage and bottom-line success.
Here are some of the big changes we are seeing in the ERP world:
Shifting to the Cloud Cloud deployment options change the dynamic for ERP. Subscription-based models are becoming main-stream, and private clouds are available for some ERPs. The primary benefit of the public cloud is mostly economical – small-to-medium businesses can save money, time, and physical space by using the hardware, infrastructure, and software of a third-party provider. The benefit of the private cloud is that you can use the same tools and software within your own datacenter or that of a third-party provider, with much more control.
Here Comes Social ERP Enhancing ERP with social media capabilities enables easy communication and collaboration both within an organization and between a business and its customers. Social media integration incorporates consumer-friendly social media tools alongside complex ERP applications -- ERP’s are even being designed with social in mind. Social ERP makes it simple for different departments to collaborate to use ERP data to improve customer service and company operations.
ERP Anywhere - Mobile ERP Mobile technology - including devices, software, networks and product distribution channels - accelerates and transforms business processes. As the technology has evolved, ERP providers have continued to adapt product development to deliver mobile capabilities. Today’s devices offer speed, convenience and unique capabilities to capture and respond to information in real time.
ERP for All The SaaS model makes it easy and cost-effective for businesses of all sizes to take advantage of the benefits ERP offers. Administration of ERP is usually entirely outsourced, letting them focus on their business. SaaS and cloud computing in general offer a deployment model that provides a predictable cost, scalability and straightforward upgrade path based on business value rather than technical obsolescence. Businesses with little or no network infrastructure and lean IT staffs can have fully functioning business software solutions that their employees can access from the Web, anywhere they happen to be.
An Engaging User Experience ERP developers are taking a cue from Apple and designing user interfaces (UIs) that truly enable user productivity. ERP sometimes gets a bad rap for static interfaces that focus on the data capture orientation of the most frequent users. Today’s ERP delivers UIs that focus on business outcomes, and extend the application reach to much more diverse array of user roles. These UIs offer rich graphical features that deliver business intelligence and interactive displays that enable decision-oriented activities and real-time customer interactions.