From Manufacturing To The Cloud – The ERP Evolution

In a world of ongoing technological development, ERP’s constant evolution opens up new and exciting possibilities all the time.

The history of enterprise resource planning (ERP) is long and varied, and has seen the technology solution move from being a niche product for the manufacturing sector, to one that is cloud-based and can meet the largest part of the requirements of most businesses in the majority of sectors.

According to Nikki Isherwood, D365 Business Development Lead for Africa at Mint Group, the foundation of modern ERP occurred in the 1960s. This occurred because a structured way was needed to ensure a business knew what was in stock and what was being produced or manufactured. This was when materials resource planning – the forerunner of ERP – came into being.

“If you think about it, if you are manufacturing products, but don’t know your cost to business or what price you are selling it for, then how can you operate your business effectively? Broken down further, this principle means that it becomes all about data, which needs to drive a process in order to influence an outcome. This realisation of the importance of data was the foundation of modern ERP,” she says.

“Of course, the way this data is collected throughout the evolution of ERP has become more intensive and complex; this is because the data itself grows more critical as we move forward.”

Isherwood suggests that as PC processing power became more easily accessible, it meant that complex manufacturing planning could rely on greater amounts of data and could even begin to include potential issues that may cause delays, such as power outages. The more factors one can take into consideration, of course, the more likely you are to be able to make more accurate predictions.

A key part of the ERP evolution was the shift to having ERP applications in many organisations, which began to drive deeper capabilities and enabled them to grow and become more specialised. At the same time, the growing usage of such systems meant including broader components of functionality. With this, a more modularised ERP was developed that could service many different industries, from the automotive sector to the media.

“We are now busy with the next big step for ERP, which is the cloud and the shift to have the ability to aggregate, compare and use data from an endless set of sources, across multiple geographies. What is key with cloud-based ERP is that it has democratised the solution, because being modularised now, it means organisations can choose the components they need and only implement these, significantly reducing the expense involved.”

Today, she adds, customers want configuration, but less customisation in their ERP – in other words, they want standard systems that are modularised. This means that it is now a simple matter to customise an ERP to suit specific requirements, she says. Today, a business can use a standard ERP set up for around 80% of the system, and then add customised modules on to suit your business requirements.

“The cloud also provides access to advanced analytics, which deliver deeper understandings – such as financial insights and fraud protection. This enables a business to become more agile and flexible in how it deals with customers. Further, the cloud also means that everything is done in real time, meaning the organisation has access to the latest, up-to-date information at all times, making it easier to build in best practice and better compliance.”

The next big thing for ERP, continues Isherwood, will likely be the Internet of things (IOT), which will be able to deliver even more specialised data from specific devices or production lines. After all, with the sheer number of sensors in everything from geysers and fridges to cars and wearables, it means that information is now available from a multitude of new sources.

“These are exciting times in this space, and ERP’s constant evolution is opening up new possibilities all the time. Moreover, global economies are putting more pressure on people to do things smarter, better and faster. There is a greater focus on improved customer service too, and by having an integrated operations management system in the cloud, organisations can deliver the service levels, quality and quantities required by customers.

“Ultimately, ERP has never been more critical to organisations across all verticals and of all sizes. Today, you cannot plan properly for the future without relevant data that is processed within a sophisticated automated system that is designed to give you the specific insights that you require,” concludes Isherwood.

Published By Rodney Weidemann from ITweb

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