Does your IT universe revolve around ERP?

There are a couple of major pivot points for activity within the IT landscape. The first is the mainframe – that beast sitting in the data centre doing all the really important grown up processing and data management – which demands respect and needs to be constantly fed with budget and attended to by the high priests of that domain. The second is the ERP system, as the centre for all bean-counting and the enabler of so much operational activity within the business. With its tentacles extending into every part of the organisation, it sometimes seems as if everything else in IT needs to integrate with it to one degree or another.

This last point leads to quite an interesting discussion. While getting aboard the all-important ERP mother ship is often a requirement when selecting and implementing other solutions, we often forget that those same solutions can sometimes have a significant spin-off benefit in terms of unlocking incremental value from the ERP environment itself.

This is extremely relevant in a lot of organisations, as previous reader feedback has indicated that one of the biggest ERP-related imperatives looking forward is generating additional return on investment beyond simply enabling of core business processes.

To illustrate the attention being placed on this, consider some of the initiatives we commonly see for enhancing the value of ERP. One way of driving greater returns, for example, is by extending access to different groups of users. Whether this means bringing new departments or divisions online or providing simple portal-based access to casual or occasional users (for information lookup etc) reviews and approvals, procurement requisitions or expense management, direct access to ERP can often translate into a significant reduction in overheads and the speeding up of process cycle times. Of course this only works if the vendor provides appropriate front ends, efficient provisioning mechanisms to bring new users into the fold and manage the extended user base, and of course offers appropriate licensing and commercial terms so the broader audience can be served in a cost-effective manner.

Enabling access beyond the physical boundaries of the organisation is another way of driving benefit. This is not only about suppliers, customers and trading partners as we have previously discussed, but also includes mobile access from the field.

Experience has shown, for example, that a very compelling return on investment (ROI) can be achieved in a field service or logistics context. Hooking up field engineers, trades people, delivery drivers and so on via mobile devices can significantly reduce administration costs, enable better resource management and generally improve responsiveness. This in turn has knock-on effects in areas such as customer satisfaction. By the same token, if sales-related functionality is part of your ERP system, then mobile access for the sales force can also drive significant business benefit.

We then come to the huge potential associated with information management, analytics, business intelligence, and basically all of those other disciplines that can potentially allow an organisation to make better use of all that transaction data held in the ERP environment. Again, this is an area we in Freeform Dynamics have discussed before in a previous workshop, and one in which readers have confirmed the potential is there.

Coming back to the original point, though, a lot of projects that have touch points with ERP (including most of the information-related ones we mentioned) are not originally conceived with the unlocking of incremental value from the central system in mind. The drivers are usually elsewhere, and where ERP integration is considered it’s not uncommon for it to appear on the cost side of the business case. Such integration work can therefore easily end up in the ’chore’ category, and be approached with the mindset of doing the minimum possible to satisfy the essential needs from an ERP data and process integrity perspective.

Given that ERP is such a central feature in both the organisation and the IT landscape, however, and in many cases represents an investment that has not yet been fully realised, perhaps a more proactive and value-oriented approach to scoping the integration activities within projects that have a dependency on it would be appropriate. Put simply, rather than viewing ERP integration as a chore, view it as an opportunity, and work it into the business case accordingly. You never know, this might even get some projects through the funding gate that would otherwise not be commercially justifiable.

So what do you think? Is it a mad, unrealistic or naive idea? Or perhaps it’s all very obvious and you are doing this already.

Dale Vile

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Dale is a co-founder of Freeform Dynamics, and today runs the company. As part of this, he oversees the organisation’s industry coverage and research agenda, which tracks technology trends and developments, along with IT-related buying behaviour among mainstream enterprises, SMBs and public sector organisations.