Author: amsaade

In today’s competitive landscape, all large enterprise organizations operate with the help of enterprise systems, in particular, ERP systems. These systems add a huge value to these organizations to the point where the business would be unable to run with out them. They have become a vital part of running a business. Utilizing these systems can be extremely complex and require people with highly specific knowledge to run and maintain these systems. Due to their importance to daily operations, these enterprise systems are complex and come with their own inherent benefits, challenges and risks.

 

Benefits

          

            The benefits of utilizing an ERP system are vast. Using these systems companies are able to track and manage complex and data heavy business processes that they would be unable to manage without an ERP system. The amount of transactions that are recorded on a day to day basis would be not be feasible to track manually. ERP systems have the benefit of saving companies money by aggregating software for different but interconnected business processes. ERP systems can also simplify the accounting process both internally and for reporting to ensure that an organization is in compliance with the regulatory bodies in which they operate. ERP systems can help standardize a business process with an organization. This has the effect of eliminating waste and increasing efficiency within various business processes and units. The streamlining of workflow and business process alone is enough of to make an investment in an ERP system worth it. The importance of these systems is so great that companies will spend in the millions of dollars on ERP software, implementations, and maintenance to make sure their ERP systems are current.

 

Challenges

 

            ERP systems also have their fair share of challenges. The most obvious is the large financial investment a company must make to implement one of these systems. However, we have discusses why an ERP systems will almost always have a positive ROI. The real challenge with ERP systems is their implementation into an existing IT environment, or in some cases as the framework for the rest of the businesses critical applications. Implementation can be very tricky for a number of reasons. First, ERP systems are extremely complicated by nature, so implementing them takes cooperation by both the implementation partner and the organization. It is difficult to ensure that the business process is adequately covered by the ERP system. Another challenge in implementing ERP systems in organizations is customization to fir business specific requirements not covered by the standard scope. Customization is almost always necessary for organizations to realize the full benefit of utilizing an ERP system. If an implementation is botched it could have critical damage to a business’ operations and it not easily undone. The final critical challenge in an ERP system is maintaining it. Before the arrival of ERP systems as SaaS, maintaining and updating the system was costly due to the high levels of customization.

 

Risks

 

            Choosing the right vendor from the start can be critical. The complexity of these systems and their importance to daily business operations makes it difficult and impractical to switch ERP providers. Choosing an ERP system that isn’t considered a Tier 1 provider like SAP can be a huge risk to an organization. If the provider goes under, or the system becomes so dated that it is no longer functional an organization becomes exposed to large financial risks. These financial risks can be substantial and the IT resources a business uses could be at risk of collapse if not supported by the ERP systems. There is also large risk of faulty implementation as covered in the previous section. In recent years companies now face the decision of weather or not to migrate from traditional on-premise ERP software applications to their cloud equivalents. These companies who are thinking of migrating stand to take on the risk of data vulnerability since their data would be hosted outside of the organizations IT environment.

 

 

Despite their challenges and risks, the benefits of an ERP system make them a critical part of business operation for almost every business. ERP systems have become an integral part an organizations strategy and operations. Employing people to deal with these challenges and risks helps minimize the risk of implementing ERP systems. And surely, the future will pose new benefits, challenges, and risks as these systems evolve.

       Over the last decade there has been a dramatic shift in the way enterprise software was deployed and implemented by businesses. The cloud is something of a buzzword in Silicon Valley. It gets tossed around often, referring to from everything to personal data storage on your iPhone, to large complex systems from computing systems like IBM’s Watson. It is also used to describe software hosted as a service of SaaS. Software being offered via the cloud is not a new concept with companies like Salesforce.com reaching over a decade of operation. However there has been on sector of cloud computing that has been slower to adopt than other facets, and its cloud Enterprise Resource Planning (ERP) applications. Large companies have been weary to adopt these cloud ERP offerings for a number of reasons. In particular security of the critical data was a large issue. However as cloud computing is becoming more widely adopted and more accepted as secure as traditional on-premise ERP systems. It is this adoption of the new ERP systems by large corporations that will shape the market in 2017. The current state, and near future for companies small and large is SaaS. This will open the door to many new trends that have not traditionally been seen.

 

1. All enterprise level companies will soon have their ERP system hosted in the cloud. Security issues will be addressed and enterprise organizations will realize the value of simplification of their IT environment. Traditional on-premise applications will be phased out of these organizations all together.

 

2. Small to medium businesses will adopt cloud ERP systems instead of disparate systems as solutions mature and prices for a full ERP suite are drive down by competition. As more cloud ERP vendors enter the market price will allow even local mom and pop shops to run full ERP suites for their business.

 

3. The adoption of cloud ERP will decrease the need for large IT staffs in organizations. Updates and but fixes will be done seamlessly through the cloud from the vendor allowing companies to downsize their IT staff and allow existing IT professionals to focus their attention from maintenance of these systems to helping solve other problems in their respective organizations.

 

4. Finally, the cloud ERP market will grow larger and larger. As large enterprise organizations begin to shift over to the cloud the market will boom. I believe that a few major players will dominate the market. The ERP vendors that can best design ERP systems that will easily integrate with other areas of companies IT infrastructure will win. ERP might even begin to be offered as a package with other software and database packages. Vendors who can offer customers everything from hardware to the software as one package will gain the largest share of the market.

 

The shift of these systems to the cloud opens an exiting world of possibilities for companies large to small. The flexibility and ease of implementation will transform IT making it simpler than ever to run a company.