5 ways newer ERP systems overcome traditional limitations

Consider one of the new breed of ERP when your ERP system needs a refresh

Few enterprises look forward to updating their ERP. It is hard work, not leading edge, and rarely enables the business to increase sales. Here’s what you need to know about the new breed of ERP and how to ease the process when you’ve decided your ERP system needs an update.

The trouble with traditional ERP

ERP systems have a reputation for difficult installations. By the time they are finally operational, it is fairly common for implementation to have taken longer and cost more than originally planned. Over time, software from the major ERP vendors has become bloated as it has expanded to support virtually every industry and to accommodate almost all possible business process variations.

Even when the initial installation is on time and on budget, it is usually followed by a major new release shortly after the first implementation is stable. Although many enterprises skip releases, at some point the customer will be faced with another large, complex project to remain on a supported release.

Fortunately, most of the more recently developed ERP software is easier to install and use.

5 design principles for a new breed of ERP

A number of new ERP vendors have created what Gartner calls “born in the cloud” software. Other vendors with a long history offering ERP software now have cloud offerings after completely re-architecting major modules. Most of these new offerings have adapted the following cloud design principles to a software category that has had little innovation for years:

1. Redesign from the ground up. Without the need to support obsolete business processes or legacy code, designers are free to learn from industry experience. Security, separation of duties, newer standards and more recent legislation are incorporated in the initial design and not bolted on later. This allows designers to create straightforward business processes and a cleaner code base with easier implementation.

2.Mobile first. Under this approach, the first version is designed to operate on the smallest screen that will be used. The small screen, combined with the need to make the app operate when connectivity is poor, forces designers to eliminate complexity and create highly functional user interfaces.

Training costs are minimized by an intuitive interface that requires only rudimentary instructions. Most developers follow Android and iOS design guidelines for navigation, status boxes, headers, button styles, etc., making learning a new app fairly easy and limiting the need for training to business process changes.

Mobile first promotes self-service, reducing administrative overhead. Mobile apps allow the individual closest to the situation to handle it directly without a data chauffeur. An HR app could enable all employees to maintain their personal contact information. Other apps could allow supervisors to approve vacation requests from their phones or travelers to take pictures of receipts and file expense reports without returning to the office.

Mobile apps also appeal to a younger generation of workers who expect to be constantly connected through ever-present mobile devices, and organizations that offer this kind of constant connectivity will find it easier to attract the best talent.

3. Single code base. Supporting all customers on the same code improves software vendor efficiency. All effort is directed towards improving the software; no time is wasted adding features or patching security bugs in old releases. This lowers vendors’ cost structures, often allowing more competitive pricing.

4. Operates in the cloud. A number of vendors have stopped offering software for customers’ servers. Without access to the source code, customer programmers cannot modify the package. Software that can only be configured is sometimes considered a limitation, but it prevents enterprises from creating future problems through ill-advised special features. In addition to reducing potential programming cost, cloud software also reduces the cost of massive infrastructure upgrades common with many on-premises ERP systems.

5. Frequent small updates. Cloud software relies on regular small upgrades. While many are transparent to users, some will require configuration changes after analysis by the internal business process team. In the absence of the major software updates common with on-premises ERP, reimplementation is rarely required and only caused by major acquisitions, divestitures or business model changes.