ERP: A New Age of Innovation

ERP: A New Age of Innovation

By William R. Dyer, CIO, Cincom Systems, Inc.

William R. Dyer, CIO, Cincom Systems, Inc.

Benefits of Cloud Computing

Cloud and ERP can be a good mix in certain situations. We tend to see cloud as just one more alternative in a multi-tier ERP architecture. When it’s right, it’s right. Some operations require little or no customization, and the requirements are more basic in nature—perhaps simple financial tracking or inventory management. Cloud may well provide an economical, functionally acceptable alternative. What cloud can offer that traditional on-premises solutions easily can’t is “access anywhere.” For businesses running any business-critical applications, they have to trade off the flexibility of cloud with the potentially increased risk of security and reliability.

"The successful enterprise will be the enterprise that is able to sift through, analyze and intelligently act on the data that is generated through these operations" 

Challenges in Deploying Big Data Analytics

It’s no secret that an enterprise-wide ERP operation can involve huge amounts of data. Obviously a portion of that data is valuable and “mineable” as a resource for reinforcing decision-making, event-triggering, forecasting and managing the operation. I think one of the biggest opportunities for manufacturing is utilizing the “Internet of Things” where sensors deployed across the actual tools and workstations used in the manufacturing process feed real-time information to support dynamic decision-making. This has great potential from the standpoint of load-leveling, scheduling and production efficiency. Extending that upstream and downstream essentially links the production facility with suppliers and customers, making the manufacturing process an extension of the supplier and customer operations. The successful enterprise will be the enterprise that is able to sift through, analyze and intelligently act on the data that is generated through these operations.

Still in its infancy, the ability to use data from across the Internet, including social media to assist in planning for demand, tailoring products to consumer needs and moving to a “responsive manufacturing” environment, will give leading-edge companies the ability to innovate and customize products rapidly.

Fostering Innovation

ERP has to be responsive. The minute the ERP system, by itself, becomes the reason for a process or the justification for the status quo that ERP system is failing. ERP should streamline operations and free up people for more creative activities. ERP should enable smart decision-making and facilitate a customer-driven operational model. ERP does this best by staying out of the way; providing accurate, timely information; and driving intelligent decisions.

ERP can’t be seen as a standalone application that works in isolation to the rest of the business. ERP solutions that work with product data management solutions, retail and supply chain and configure-price-quote systems support real-time responses to changing situations. It is no longer acceptable to plan in weekly or monthly buckets. Days, hours and minutes count. Things like real-time MRP and automated processing of events (with appropriate control) allow people to become masters—rather than slaves—to the system.

Future Inventive Technologies

There is so much going on right now technologically that it’s hard to pick one or two that stand out. The Internet of Things or M2M driven by automated sensor-generated data passed between systems is hugely promising. On the shop floor, so much is happening in terms of 3D, additive, end-of-arm tool improvements in robotics and other sophisticated manufacturing technologies. And at the customer end, the evolution of user-driven product configuration allows mass customization and a unique experience that will place more power in the hands of the buyer. It is too easy to lose sight of what your needs are right now because you are dazzled by what is just around the corner. We are a manufacturer, and as an IT professional, I have to look at technology, capability and priorities through the lens of manufacturing. That drives our priorities and our direction from year to year.

Changing Role of CIOs

IT organizations are shifting to becoming more service-focused. Many of the decisions about what systems a business decides to use are driven by CMOs, CSOs and COOs, and system selection and deployment is becoming part of the responsibility of the business. The position of CIO is unique to every company, therefore, it’s difficult to give generalized advice. However, it’s clear that the strategic shift for CIOs is not only on providing a framework that supports the business, it’s also on ensuring that guidelines are met while providing system capabilities that users with systems capabilities are looking for while of course making sure that it’s done securely and at the lowest possible cost. This requires CIOs to have to ability to adapt to the ever-changing needs of the business as well as the technology—a very challenging task. For example, three or four years ago we didn’t have to worry about BYOD; now it’s a challenge to manage BYOD while ensuring that your network remains secure.

Mitigating Rising ERP costs

I think it is important to stay correctly positioned within the technological curve. You can’t be so far in front that everything is bleeding edge, and yet you also can’t be so far behind that comfort or stability is the only consideration. Both extremes can be lethal to companies. Platform, hardware, specialized systems and strategy in terms of matching capability to need at the local level are critical to ensuring a maximum return on investment as it relates to your technology spends. This may not reduce your cash outlay, but it will ensure that you are getting what you pay for.

Meaning of IoT for ERP

It’s huge. As I mentioned before, this will drive everything. People used to marvel at how much society had changed with the telephone. For the first time, two people located anywhere on the planet could communicate in real time. Imagine that type of change applied to all the devices we use in life. ERP used to be all about looking at what happened last year and planning next year around those numbers. IoT will make ERP totally real time. Yesterday’s plans will differ from those of today and tomorrow. We’ll manage by the second, not by the year.

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