Emerging Trends in ERP Technology

A report submitted to

Instructor: Prof. V. Venkata Rao

Academic Associate: Mr. Syam Prasad

In partial fulfilment of the requirements of the course

Enterprise Resource Planning Systems:

Technology, Planning and Implementation

By
Group 6
Ruby Gaylong
Arnab Chowdhury
Abhishikt Mrinal Greewold

On
27th January 2015

INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD

Contents
Introduction............................................................................................................. 2
Cloud ERP............................................................................................................... 2
Mobile ERP.............................................................................................................. 3
Business Intelligence (BI) and ERP...............................................................................4
Two Tiered ERP........................................................................................................ 4
Social media with ERP............................................................................................... 5
Conclusion............................................................................................................... 6
References................................................................................................................ 7

Introduction
Enterprise resource planning systems or enterprise systems are software systems for business
management that handles modules that support functional areas such as planning, inventory

management, manufacturing, distribution, marketing, sales, financial, accounting, human resource

management, project management, service and maintenance, transportation and e-business. Even then,
the scope of an ERP system might not be limited to these functional areas only. ERPs today facilitate
integration of different modules in a business process and provide flow of information in a consistent
manner. So, ERPs today are single integrated system.
The evolution of the ERP systems closely follow the development in the computer hardware
and software systems. The 1960s saw the automation of individual functions like financial accounting
or inventory management. These systems were known as Enterprise Information Systems and were
written in COBOL, ALGOL and FORTRAN. With the 1970s came the Material requirements
planning (MRP) systems. These systems allowed business to plan parts and product requirements
based on the master production schedule. MRP II were introduced in the 1980s. These systems
emphasized an optimised manufacturing process that coordinated materials and production
requirements, and extended services to various other departments. This laid the foundation for ERP
systems. The ERP systems were introduced in the 1990s which gave the organization the power of
enterprise-wide inter-functional coordination and integration. ERP systems integrated all the different
functional modules in an organization ensuring visibility, accessibility and consistency across the
enterprise. During the 1990s more modules and functions were added to the core module which gave
birth to the extended ERPs. These included advanced planning and scheduling (APS), customer
relationship management (CRM) and supply chain management (SCM). Now a days, ERP trends
include capabilities for cloud, mobile and analytics. We will have a look at the recent trends that have
been shaping the future of ERPs.
Cloud ERP
Cloud ERP is an approach to enterprise resource planning (ERP) that makes use of cloud computing
platforms and services to provide a business with more flexible business process transformation. With
businesses going global, most of the companies today face the challenge of staying connected from
anywhere in the globe. Going for Cloud-based ERP in such a situation can save time and money and
help them to stay competitive by providing the service anytime, anywhere. Cloud ERP systems has
many benefits like flexibility, cost benefits and scalability, however cloud ERP is not the best choice
for every organisation as there are security and integration concerns. It means to move the data
outside the company premises and not many organizations are willing to do that. Most organisations
are taking up cloud rather gradually to balance the risks of being left behind against the perceived risk
of cloud. Another important aspect of moving to cloud is the organisational disruptions which must be
taken into account. Some companies are taking up a hybrid approach of cloud in which the most
sensitive data is within the company. It is expected of ERP vendors to offer some cloud support to the
customers. It gives an assurance to the customers that the vendor is looking ahead and does not want
to lag behind in terms of future services.
The value that cloud can provide can outweigh the cost incurred by organizations to maintain
ERP systems in-house. It provides relatively easy networking and scalability, and on top of that can
provide social, mobile and analytics capability on the cloud. Companies can look beyond early
savings with SaaS ERP and look at the long term benefit. Even though in the long run, the benefits
outweigh the risks, it is advisable to do proper research on the issues and move ahead with cloud ERP.
We have a hoard of examples of companies from various sectors moving from in-house ERP
systems to cloud ERP. Unionwear, a custom apparel and promotional product manufacturer, went
global with cloud ERP system. TUSCO, an Ohio based manufacturer, switched from 10 year old inhouse ERP to cloud ERP as they wanted to keep up with the competitors technology-wise.
Mobile ERP
As name suggests, it is about accessing the services of ERP software using a mobile device like
smartphones or tablets.
Need for Mobile ERP has arisen due to various factors like

Need for service improvement which involves a high level interaction between the customers and
the business applications.
ROI is better in case of implementation via mobile.
Growing trend of mobile workforce. Studies show that Indian workforce is expected to reach 205
million in 2015 with 65% being well equipped with smart mobile devices. Thus companies need
to adapt and evolve with mobility.
Thus, the ERP vendors are also evolving with the changing environment and providing mobile
enterprise suites. This Mobile ERP would allow the employees to access their organisation
enterprise applications even on the move. In the long run, this would allow organizations to lower
the transaction costs, improved customer relations, improved cash flows and satisfied employees.
It helps in improving productivity by having a 24 hour access to updated information.
Mobile ERP for HR solutions For HR solutions, benefits of having mobile ERP is mainly for the
employee. Employees can use organisation applications and can manage their office leaves or
submit expense claims remotely when they have a receipt or make a purchase rather than
searching the receipt later. This would lead to happier and engaged employees.
Mobile ERP for Supply chain and manufacturing solutions With a mobile ERP, the operations
and production managers can receive alerts for problems like machine breakdowns, raw material
stuck in transit etc. The manager otherwise would get the information only when he sits on
computer. Thus, in cases where the manager is constantly on the move, such solution can help in
facilitating quick/better decision making.
Mobile ERP for sales force- Such solution can help the sales force when they are offline and
making deals. Having an access to the enterprise applications, the sales staff can understand the
profitability of any offline deal he makes according to the customers needs. Sometimes
customers modify the deal as per their needs and as such sales staff can quote correct delivery
times by accessing the actual manufacturing and inventory schedule.
Business Intelligence (BI) and ERP
ERP systems were usually designed for data entry and transaction and not analysis. Historically there
were tools which were used to sort and sift through the data within ERP. However the new tools
focussed on analytics and were becoming more and more predictive.
More and more data is being generated by the companies and it presents great breakthrough
opportunity for businesses. BI tools in most organisations are fragmented and split across multiple
tools. Many a times they are deployed at departmental level and fail to give a complete view. There is
data everywhere but no information.
Thus, ERP is now being further extended so that its power is enhanced to provide greater
value by integrating business intelligence system to it. Together it can provide capability to extract
correct valuable information and identify relevant trends and patterns. This can be used for demand
forecasting, production planning, identifying cross selling and up selling opportunities etc., and thus
providing competitive differentiation, operational efficiency and high profitability. Most of all, it
saves time and costs as decision making is faster and correct.

BI and ERP for marketing Integrating both tools can help marketing department to predict
which customer group to target for highest returns and also forecast the demands. It helps in
identifying which customers are lowering profits and eating away the earnings.

BI and ERP for manufacturing solutions It helps in providing intelligent reports on inventory
levels like inventory turnover ratio, product development lead time, capacity utilization etc. This
can help in taking quick, better decisions regarding production goals, inventory management thus
saving time and costs and increasing efficiency.

BI and ERP for financial solutions Intelligent reports from the data can help in developing
smart revenue goals (top customers, top branches, top channels, top products), costing goals (cost
per customer acquisition, revenue vs cost per employee).

Two Tiered ERP

ERP systems have been mostly rolled out as large uniform global systems. These were expensive to
implement and maintain and sometimes failed to deliver expected benefits. With these challenges, the
technology has evolved to a two tier ERP within the organisation. Large manufacturers found that
often a single global system was not able to address to the local, specific competitive needs and hence
limited the capabilities. For example, the headquarters or the parent might sell using a direct sales
force but the subsidiaries might use intermediate channels.
Such a structure helps the large manufacturers to overcome complexity. Al local level, ERP can
provide localised data needed to efficiently operate in real time which the global systems cannot
provide. Thus, it enables one to innovate even at local level and adjust strategies accordingly. It helps
in improving flexibility within the organisation and fine tuning the ERP system to match the business
strategies and customers unique, challenging and changing expectations.
Two-Tier ERP for manufacturing company Tata Motors, Indian automobile company, has
deployed this structure for its Jaguar Land Rover division. The cars and spare parts are made in
UK but shipped to Brazil where they are sold. They integrated the major ERP suite at
headquarters with the small scale ERP implemented at branch at Brazil. Two sides shared the
production, distribution and financial data while the lower tier at Brazil addressed the specific tax
and regulatory challenges for conducting business in Brazil. This helped them to fine tune the
processes at different levels and overcome the challenges.
Social media with ERP
In todays business environment social media like Facebook and twitter has become critical for many
companies. It has become an important means to communicate with the customers and collecting
feedback from them as it allows easy and fast communication.
Although it has been very effective for brand building and PR purposes which is just one side of
communication which social media facilitates, but when it comes to using the customer information
captured there, businesses find it difficult to structure the information gathered and get value out of it
for better understanding.
This is where the ERP systems are now being asked to gather the interaction between the customers
and businesses which is unstructured and integrate it with the ERP system so there is access to all the
customer related data through ERP even that collected via social media.
Another factor which ERP vendors realizes is going to be important is the Facebook like interface for
employees to access the ERP data especially with emergence of ERP on mobile devices.
Also keeping in mind the new generation of workers who have grown closely with the social media it
is beneficial for companies to have such tools integrated with ERP systems for their ease of access
and better usability.
How it works

Integration of social media with ERP

Courtsey:Integration of Social Media Technologies with ERP:A Prototype Implementation

Venky SHANKARARAMAN Singapore Management University, [email protected]

Connecting social media with the ERP systems are bound to have these advantages and challenges:
1. So far the companies which have tried this have reported increase in sales, along with other
benefits like better communication between salesforce & customers and easier & quick
problem solving.
2. New generation of customers as well as employees with deep social media experience will
have better and more effective communication.
3. People with less exposure to the social media might face some challenges which have to be
taken care of by training.
Businesses need to take decision based on the nature of their work as to what option they must go
forward with, either they can select to integrate one particular kind of social media network with
either ERP or multi social media network with all of their systems of ERP, CRM etc.

Conclusion
In this dynamic ever-changing business environment where every day there are new technological
developments effecting the way business is conducted and latest gadgets are becoming more
accessible and at faster rate for the people to use, it is imperative that ERP developers have to keep up
with these emerging trends.
The biggest challenge the ERP system developer face and will continue to face is the ever-changing
and frequent-upgrading of the technology. Like cloud computing becoming important for many
businesses at the same time the same organisations might want to avail the benefits of mobile ERP or
linking it with the social media.
So in future emphasis will be on keep on updating the ERP systems with the emerging technologies
and business systems as well as integrating these updates with each other.

References
1. https://faculty.biu.ac.il/~shnaidh/zooloo/nihul/evolution.pdf
2. http://ctnd.com/a-brief-historical-look-at-the-evolution-of-enterprise-resource-planning/
3. http://searchmanufacturingerp.techtarget.com/essentialguide/Planning-a-safe-journey-toERP-in-the-cloud#guideSection1
4. http://searchmanufacturingerp.techtarget.com/feature/Cloud-ERP-software-introducesbusiness-benefits-culture-shock
5. http://searchmanufacturingerp.techtarget.com/feature/Unionwear-becomes-globalcompetitor-through-Rootstock-cloud-ERP
6. http://www.infomotion.com.au/wp-content/files/Top_10_ERP_Trends.pdf
7. http://www.cio.com/article/2405407/enterprise-resource-planning/erp-apps-gaining-usefulnew-social-media-tools.html
8. http://www.computerworld.com/article/2495854/enterprise-applications/enterprise-apps-getsocial.html
9. http://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=3042&context=sis_research
(Integration of Social Media Technologies with ERP:A Prototype Implementation,
Venky SHANKARARAMAN, Singapore Management University, [email protected])