Your Path to a Real-Time Enterprise: 3 Ways to Stay Ahead of an Ever Changing ERP Roadmap
Today, CIOs are facing big challenges with relation to delivering true business outcomes leveraging their Enterprise Resource Planning (ERP) systems. The days of collecting bonuses on server uptime and meeting service level agreements are gone. Now, it’s about delivering metrics tied to true business value and staying ahead of the digital and data revolution to drive real business growth.
Historically ERP solutions, although “pre-packaged”, were painfully slow to implement and required multi-platform solutions to address various business needs. Organizations spent as much as 80 percent of their IT budgets maintaining their systems rather than on innovative, new development. As organizations grew and merged, they created custom code that left ERP systems difficult and risky to maintain and update. This, in turn, meant higher maintenance costs, security issues and disjointed data models for reporting.
CIOs’ roadmaps now need to address the digital revolution and the “New Style of IT”—including critical business solutions for Big Data, Security, Mobility and Cloud—with their ERP solutions. With so many vendors, platforms and new innovations, how do you stay ahead of the game?
Here are three things that CIOs should keep on top of their mind when implementing, maintaining and upgrading their ERP systems:
Enable business process transformation through deploying real-time big data technology—today, there is a trend for CIOs to be immersed in business processes; redesigning them with a strong use of technologies that make the business more profitable, efficient, competitive and sustainable. When the CEO of a major global technology company tweeted how he couldn’t get a router to work, he immediately got a call from the manufacturer’s regional support manager. This is the new level of support customers’ demand. With this and many other situations, a business’s ability to analyze and respond to data from social sentiment in real time can be the difference between growth and decline. It takes a real-time enterprise to respond immediately.
As an example, SAP has released SAP HANA, its solution for Big Data challenges with its ERP suite running on an in-memory platform. This can be quickly deployed using SAP Rapid Deployment Solutions (RDS), which include best practices, templates and tools that address the most urgent business processes and make solution adoption easier and faster. For example, finance is always measured against how quickly they can close the books each month, sometimes ranging from 5-10 days depending on the size and complexity of the business. What if you could implement real-time, in-memory computing to accelerate that close by over 50 percent? That is the reality now with SAP HANA.
"CIOs’ roadmaps now need to address the digital revolution and the “New Style of IT”—including critical business solutions for Big Data, Security, Mobility and Cloud"
Use Business Intelligence (BI) to analyze the past and predict the future business roadmap—Traditionally, the role of information management was to let us know what has already happened or is happening. But this is like driving while looking in the rear-view mirror. Today, we need to look ahead. Modern BI solutions give us new ways to analyze information, find key insights and model probable future scenarios. This allows us to anticipate and make decisions today so we are still competitive tomorrow. Clearly the CIO’s role will be centered in this new generation of predictive information systems, which give the company access to new dimensions of the business.
For example, to answer one of our client’s business challenges, we built an analytics system in 8 weeks for less than $500k that analyzed 2 billion records in under 10 seconds. This allowed our client to analyze point of sale data across several source systems and operating companies, enabling better sourcing of goods and improving net margin by 2-5 percent. We also addressed macro-economic factors like how weather pattern changes affected sales and distribution. With that information, we could adjust distribution plans based on probable demand; thereby reducing transportation costs and increasing stock turn efficiency.
Make the new technology revolution run the business with shorter implementation cycles and minimal disruption to the business—According to a recent report, 54 percent of ERP implementations run overtime (Panorama Consulting, ERP Report 2012). These traditional ‘big bang’ implementations require a $5 million to $10 million investment and take months or years to deploy, pushing the payback into years or sometimes never.
By adopting new technologies and best practices, ERP deployment can be accelerated, significantly reducing disruption to the business. For example, if you use pre-configured solutions, like SAP RDS, to enable new technologies like SAP HANA delivered through mobility via secure cloud-based solutions, you can cut as much as 40 percent of the implementation time and effort.
Consider a scenario where a large global consumer goods manufacturer needs to install a large patch or upgrade, or even replace the ERP system all together. When determining the deployment approach, speed and efficiency are critical. But it’s not the IT system uptime they care about, but rather the business uptime that is the driver. When supporting post go live, if the CPG Company’s system is down for just a half day, orders can’t be placed and trucks won’t leave the distribution center. The negative impact on revenue and customer satisfaction could be devastating.
When a new technology investment delivers clear outcomes like reducing cost of goods sold, improvisation of customer service, better prices for products, thus increasing sales, we know we’ve answered a challenge and achieved true business results. How will you define your roadmap to address some of these challenges and how often will you update or need to adapt due to the launch of new innovative approaches?
In summary, CIOs struggle with applying real business value to their technology environments. Many metrics are IT-focused and don’t address how business value is generated. CIOs must examine their key performance indicators and alter their metrics to focus on how technology decisions will truly drive business outcomes as they design, implement and run their business. This is primary in HP’s design-to-run approach through its Business Outcome Service Management methodology.