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Monday, February 26, 2024

Seven ERP Trends for 2024

Introduction: 

The world of Enterprise Resource Planning (ERP) is constantly evolving, driven by technological advancements and changing business needs. Global ERP Market is expected to grow from about 48 Billion in 2022 to about 96.85 Billion by 2032 growing at a CAGR of 7.3%. 

As we enter 2024, several key trends are set to reshape the landscape of how organizations manage their operations. These trends promise increased efficiency, improved decision-making, and enhanced agility in a dynamic market. Let's delve into seven of the most significant trends that will likely impact the way businesses operate and leverage their ERP systems.

Seven ERP Trends for 2024
Seven ERP Trends for 2024
1. Cloud First: Embracing Agility and Cost-Effectiveness

The dominance of cloud-based Software-as-a-Service (SaaS) ERP solutions continues to surge. This shift towards the cloud empowers businesses, particularly large multinationals, with seamless collaboration and real-time data sharing capabilities across global locations. This trend is driven by several factors:
  • Reduced Costs: Cloud eliminates the need for expensive hardware and IT infrastructure, leading to significant cost savings.
  • Enhanced Scalability: Cloud-based ERP solutions effortlessly scale up or down to accommodate changes in business needs, offering greater flexibility.
  • Improved Accessibility: Cloud ERP can be accessed from anywhere, anytime, and on any device, fostering better collaboration and boosting employee productivity.
2. Integration with Cutting-Edge Technologies

The integration of emerging technologies like Internet of Things (IoT) and blockchain within ERP systems is gaining significant traction. This integration offers several benefits:
  • Blockchain for Transparency and Security: Businesses are increasingly adopting blockchain technology within their ERP systems to enhance transparency, traceability, and security in supply chain and financial transactions. This allows for the creation of immutable ledgers, providing a clear audit trail for products from manufacturing to delivery. 
  • IoT for Real-Time Monitoring and Optimization: ERP systems integrated with IoT devices enable real-time monitoring of equipment health, leading to reduced downtime and maintenance costs. In addition, this integration helps businesses optimize production processes and improve resource utilization.
3. Hyperautomation: Streamlining Operations

Hyperautomation refers to the strategic application of multiple automation technologies, including Robotic Process Automation (RPA), Artificial Intelligence (AI), and Machine Learning (ML), to automate as many tasks as possible within an organization. This trend is gaining momentum in the ERP space, as businesses strive to streamline operations and eliminate inefficiencies.
 
Hyperautomation can be applied to various areas within the ERP system, including:
  • Data Entry: Automating repetitive data entry tasks saves time and improves accuracy.
  • Invoice Processing: Automating the processing of invoices reduces errors and enhances cash flow.
  • Customer Service: AI-powered chatbots can handle basic customer inquiries, freeing up human agents to address more complex issues.
4. Rise of Industry-Specific Solutions: Tailoring ERP to Unique Needs

While traditional ERP systems offer a generic approach, businesses are increasingly demanding solutions tailored to their specific industries. This demand has led to the development of industry-specific ERP modules that cater to the unique needs of various sectors, such as healthcare, manufacturing, and retail. 
 
These specialized solutions offer several advantages:
  • Pre-Built Functionality: Industry-specific ERP solutions come equipped with features tailored to the specific industry, reducing the need for extensive customization.
  • Embedded Best Practices: These solutions incorporate industry best practices, offering valuable insights and helping businesses improve their operations.
  • Faster Implementation: Industry-specific solutions can be implemented more quickly and easily, minimizing disruption to business operations.
5. Data Privacy Compliance: A Growing Priority

With increasingly stringent global data protection regulations, the emphasis on data privacy and compliance features within ERP systems is intensifying. This trend ensures that businesses can operate confidently, knowing their data is secure and compliant with relevant regulations.

6. Eco-Friendly ERP: Aligning with Sustainability Goals

Environmental sustainability is becoming a critical business imperative, and ERP systems are playing a key role in this shift. Businesses are increasingly seeking eco-friendly ERP solutions that can help them track and manage their sustainability efforts. Modern ERP systems offer features such as:
  • Carbon Footprint Tracking: Businesses can leverage their ERP systems to track their carbon emissions across the entire supply chain and identify areas for improvement.
  • Energy Efficiency Monitoring: These systems can monitor energy consumption in real-time, allowing businesses to identify and implement strategies to reduce energy use.
  • Sustainable Sourcing: Businesses can utilize their ERP systems to manage and track the sourcing of materials from sustainable suppliers, contributing to a more responsible supply chain.
By embracing eco-friendly ERP practices, businesses can not only reduce their environmental impact but also demonstrate their commitment to sustainability, which can be a significant advantage in attracting and retaining eco-conscious customers.

7. The Human-Centric ERP: Fostering User Adoption and Engagement

While technology is undeniably transforming the ERP landscape, the human element remains crucial. In 2024, we will see a continued focus on developing ERP systems that are user-friendly, intuitive, and engaging for employees. This includes features such as:
  • Personalized Dashboards: Users can customize their dashboards to display the information they need most frequently, improving their efficiency and decision-making.
  • Mobile Accessibility: ERP functionalities will become increasingly accessible from mobile devices, catering to on-the-go work styles and fostering greater flexibility.
  • Simplified User Interfaces: ERP systems should be designed with intuitive and user-friendly interfaces, ensuring ease of use even for non-technical users. This will improve user adoption, reduce training time, and enhance overall satisfaction with the system.
A study by MIT Sloan Management Review found that companies with a user-centric approach to ERP implementation are 30% more likely to see a positive return on investment. By designing human-centric ERP systems, businesses can increase user adoption, improve employee satisfaction, and drive greater efficiency across the organization.

Conclusion
 
By embracing these seven key trends, businesses can leverage the power of ERP to achieve new levels of efficiency, agility, and competitiveness in the ever-evolving business landscape. As technology continues to advance, it will be exciting to see how these trends further shape the future of ERP and empower businesses to thrive in the years to come.

References

Cloud-First, Always:

Gartner Predicts 80% of New Deployments Delivered as SaaS Within Five Years: https://www.gartner.com/reviews/market/cloud-infrastructure-and-platform-services

AI and Machine Learning (ML) Take the Wheel:

IDC Survey: 73% of Businesses Are Considering or Already Using Cloud ERP: https://www.idc.com/getdoc.jsp?containerId=US46733721

AI could add up to $2 trillion to the global economy by 2030: https://www.mckinsey.com/featured-insights/artificial-intelligence/notes-from-the-ai-frontier-modeling-the-impact-of-ai-on-the-world-economy

Hyperautomation for Streamlined Operations:

The Hyperautomation Market Will Reach $246.9 Billion by 2025: https://www.forrester.com/report/the-rpa-market-will-grow-to-usd22-billion-by-2025/RES177085

Sustainability Takes Center Stage:

66% of Consumers Are Willing to Pay More for Brands Committed to Sustainability: https://nielseniq.com/global/en/insights/

The Rise of Industry-Specific Solutions:

Global Industry-Specific ERP Market To Reach $4 Billion by 2028: https://www.marketresearchfuture.com/reports/erp-software-market-1412

Democratization of Data and Analytics:

Companies that empower employees with self-service analytics are 58% more likely to outperform their competitors: https://www.accenture.com/content/dam/accenture/final/capabilities/technology/cloud/document/Accenture-Cloud-Data-Value-A-New-Dawn-for-Dormant-Data-vF.pdf

The Human-Centric ERP:

Companies with a user-centric approach to ERP implementation are 30% more likely to see a positive return on investment: https://ocw.mit.edu/courses/6-831-user-interface-design-and-implementation-spring-2011/

The source for this information is a market research report from Market Research Future titled "ERP Software Market - Global Forecast to 2028" published in November 2023. You can find the report here: https://www.precedenceresearch.com/erp-software-market


Friday, October 20, 2023

The Power of Precise Problem Identification in ERP Implementations

It is a known fact that many ERP implementations are either outright failures or are suboptimally implemented leading to permanent dissatisfaction of the end users. While there are many reasons for this, one of the issues that I have seen, and which can be very easily resolved, is this.

"Incomplete / incorrect problem statement. The consultant do not have a clear idea of the issue and hence the problem remains unsolved for a long time."

Let me give you one example.

We were upgrading a customer from EBS1 R12.1.3 to R12.2.10. I was providing project oversight. One of the issues that remained open for a long time was this.

"When you create a customer, the value for the field Default Collector appears as 'Credit Manager'. We want the value to be set as blank so that we can update it based on the correct value."

Why is this issue open? I asked the consultant.

Sir, we tested this thoroughly, this is the normal behaviour, replied he.

Does it work the same way as in Reference Instance (the current 12.1.3 instance)?

Yes, we checked it, the behaviour is the same.

Can you show it?

The consultant quickly opened the application and created a customer. The behaviour was as per expectation. The value of 'Default Collector' was being picked up from the configuration and system was working correctly in my opinion.

However...

Customer still maintained that this was an issue.

So I called a meeting of all stakeholders and spent 30 minutes reviewing the issue.

We found that the customer was creating new customers through a custom form and they had written code to update this field value.

The customer was testing the issue using the custom form and consultant was testing the standard application.

This crucial difference was missed out by the consultant.

We reviewed the custom code. Someone had hard coded the default collector value as 'Credit Manager'.

We made minor change to the code and the issue got resolved.

An issue that was pending for over 3 months was resolved in just one hour!

I would like to think that the customer was happy. He was more relieved, I will say.

In any similar project, consultant would have raised a service request with Oracle Support and they would have analyzed for a few days before refusing to support issues with Custom Applications.

That is when consultant would have realized that there was a customization in the process flow.

There is only one lesson here. Before doing any testing, prepare the detailed test cases as per the available documentation. It will take time, but the testing will be very rigorous.

At a broader level, understand and document the issue very clearly. Use screenshots, test cases and the works to clearly identify the problem.

The solution, as they say, lies in the problem.

What do you think of this anecdote? Throughout my career I have faced this challenge. What about you?

Monday, April 24, 2023

From Recipe to CRP: Seven lessons that a Chef can teach an ERP Consultant.

The world of culinary arts and the world of ERP (Enterprise Resource Planning) consulting may seem like two vastly different fields, but there are many valuable lessons that can be learned by bringing them together. For one, both are in the service industry and they work to deliver customer satisfaction. They have targets, deadlines and teams who work together to achieve the ultimate goal of making their customer happy.

So it is natural that there are lessons that a chef can teach an ERP Consultant. Here are of them.

1. Attention to detail

As a chef, attention to detail is critical. Even the smallest mistake can ruin a dish. Every ingredient must be measured precisely, and every step in the recipe must be followed exactly. A chef cannot afford to overlook even the smallest detail, as it could impact the taste and quality of the final dish. 

Similarly, an ERP consultant must pay close attention to the details of a project. Even a slight change could make the difference between a 'Customer Delight' and a mere 'Successful Implementation'. Or even a disaster. Each aspect of the ERP system must be thoroughly evaluated, and every step in the implementation process must be carefully planned out.

For example a wrong configuration option could mean that the end user clicks three times rather than one. Missing a small aspect of data migration could mean multi year reconciliation challenges. Forgetting to mask customer email id during the testing phase could mean wrong dunning statements going to the customer leading to long-term disputes.

It has happened. I remember reading a case where the customer sued the implementation partner because even after go live, they ended up printing payroll checks for 'Test Employee 1' and 'Test Employee 2'

Forgetting to take the backup before applying a critical patch could mean that months of effort goes down the drain. 

So 'attention to detail' is as important for an ERP Consultant as it is to a chef.

In my ERP Implementations, I give a lot of attention to details. I am a big fan of checklist approach (Chefs call it recipe). I ask my team to make a checklist and report on it so that no important detail is missed out.

2. Planning and preparation

A chef cannot simply start cooking without proper planning and preparation. They must create a menu, gather ingredients, and ensure that all necessary equipment is clean and in working order. 

Similarly, an ERP consultant must plan and prepare for each project. Even before the project starts, you should do your back ground work. You should visit the customer's website and understand what they are doing. If you have a retail customer, go to the nearest supermarket and checkout their products. Try to find out about their distribution. Do they sell to small vendors or to big supermarkets. What are the SKUs that they sell? Do you see their distributions vans on the road as you take your morning walk? This exercise will give a feel of the customer's business.

Before starting their work, chefs neatly arrange everything they need. The have the tools, the pots and the pans, the meat and the vegetables, neat and clean stoves, aprons...

That is not how a typical ERP Consultant starts his implementation. They start looking around for tools, templates, reusable components and standard presentation AFTER they start the project.
 
Ideally, they must conduct a thorough analysis of the organization's current processes and systems, develop a project plan, and ensure that all necessary resources are in place. Preparation must also include clearly understanding the approved scope of work

In summary, prepare. Have the predictable aspects in place before you go for that first project meeting. It fast tracks the implementation

3. Flexibility and Adaptability

Chefs know that things don't always go as planned in the kitchen. Unexpected issues can arise at any moment. Perhaps an ingredient is unavailable or a piece of equipment breaks down. A chef must be able to adapt and quickly find creative solutions to these problems. 

Similarly, an ERP consultant must be flexible and adaptable. They must be able to adjust the project plan as needed and find creative solutions to any unexpected issues that arise during implementation. Unexpected issues are the norm in ERP Implementation. A key team member could quit, a key assumption made about the solution do not hold, customer changes his business requirement.. Anything is possible and ERP Consultant should expect the unexpected and handle it.

4. Collaboration and Communication

A chef cannot create a delicious dish alone. They must work collaboratively with their team, including sous chefs, line cooks, and servers. Each member of the team has a specific role to play, and they must work together to create a successful dining experience. This requires strong communication skills and the ability to work effectively as a team.

Similarly, an ERP consultant must collaborate with various stakeholders throughout the implementation process, including executives, managers, and end-users. Each stakeholder has a unique perspective and set of needs, and the consultant must work collaboratively with them to ensure that the ERP system meets everyone's needs.

One of the best examples of team work that I have encountered is a recent project with multiple stakeholders. We worked together so effectively that this turned out to be one of the best projects that I have worked on. Team work matter.

5. Continuous improvement

A chef is never truly done improving their craft. They must constantly experiment with new ingredients and techniques to stay ahead of the competition. They should be aware of the environment and skill themselves on the latest innovations in the area of cooking. In addition, they must be aware of the latest jargon (Hello KETO Diet) to satisfy customer's palate and their intellect.

Similarly, an ERP consultant must always be striving for continuous improvement. They must stay up-to-date on the latest ERP trends and technologies, and they must constantly seek out ways to improve the system's functionality and user experience. This will enable them to deliver better experience to the end user. 

In my years in ERP, I have worked on Character based applications, GUI, Client-Server, 3 tier, On Premise, Cloud Computing, Activity Based Costing, Average Balances, IFRS15, AI, ML and many new technologies and jargon. This has helped me to enhance the value that I generate for the customer.

6. Attention to the customer

A chef's success depends on the satisfaction of their customers. They must create dishes that not only taste great but also meet the customer's expectations. They may take dietary restrictions or personal preferences into account when creating menus or preparing dishes. I prefer less spice in my food, so I am elated when Chef listens to my requirement and deliver the same.

Similarly, an ERP consultant must focus on the end-user experience. They must ensure that the ERP system is user-friendly and meets the needs of the organization's employees. They must also be responsive to end-users' feedback and make adjustments as needed to ensure their satisfaction.

An example is data migration. Customers know their data since they are dealing with it everyday. After go live, the first thing they check for is if their data has successfully migrated. Knowing this, an ERP Consultant can prepare reconciliation test cases to review the key data before handing over the instance to the customer.

7. Time Management

A busy kitchen can be a chaotic place, but a good chef knows how to manage their time effectively. They must be able to prioritize tasks, delegate responsibilities, and ensure that everything is done on schedule. This same skill is critical for an ERP consultant who must balance multiple projects, deadlines, and priorities. She must ensure that project tasks are completed on time and budget

Bonus: Eighth Habit: Creativity

Cooking is often seen as an art form, and chefs are known for their creativity in the kitchen. They may experiment with new flavor combinations or presentation techniques to create unique and memorable dishes. 

Similarly, ERP consultants can benefit from a creative approach to problem-solving. Thinking outside the box and exploring unconventional solutions can help consultants find innovative ways to address complex challenges.

I have delivered many creative solutions in my ERP Implementations. One example is loading of overheads on to the products. Normally it it done through a cumbersome process of month-end allocations. However, in one of the projects we were able to provide and innovative solution that delighted the customer.

Conclusion

In conclusion, the world of culinary arts and the world of ERP consulting may seem very different, but there are many valuable lessons that can be learned from both. By bringing these two worlds together, we can learn to be more creative, customer-focused, and adaptable while still paying close attention to detail, managing our time effectively, and working collaboratively with others. 

So if you're an ERP consultant looking to take your skills to the next level, consider spending some time in the kitchen and learning from a master chef

References:

Sunday, March 26, 2023

From Cutting Board to Cutover: Applying cooking lessons to ERP Consulting.


I love cooking.
This started as a necessity since I am a vegetarian (occasionally I eat eggs) and I have to travel abroad for work. My travel is often 2 to 3 months at a stretch and I have to cook my food to survive.
Of course cooking is relaxing as well.
Recently I re-discovered the joy of cooking.
The catalyst, the cue, that made me love cooking again was very simple.
A sharp knife.
I found a very sharp knife and I discovered that with it I could cut onions at a granularity that I had never done in life. I have used many sharp knives earlier, but this one was exceptional. The fluffiness of my omelette increased manifold as I used really 'Finely chopped' onions.
Cooking suddenly become a delight.
I am an ERP Professional. Whenever I experience such things, I try to find lessons that I can use in my profession. What are they?
Here goes.
The obvious lesson is to be prepared. Have the right tools in place before you start the work. In the cooking shows on TV, the chefs arrange everything they need before they start cooking.
Unlike the chefs, many PMs start the ERP Implementation projects and THEN start looking out for tools and templates. Is there a project plan that I can reuse? Are there a data migration templates, or extraction scripts that I can give to the customer? Or standard training materials or connectivity tools or reusable components that others have used or even I have used earlier...
There is no tools standardization in the project. Every project creates its own tools. A classic example is Data Migration Strategy Document. I myself have used at least five different templates while managing my project. There is nothing stopping me from consolidating the lessons and preparing a master template.
The second lesson is about having a process. A good chef has a 'place for everything and everything in its place'. And she maintains the discipline over and over again.
A typical ERP implementation begins with a process. It starts with an awesome folder structure with folders for Project Planning, Invoices, Tools and Templates, Familiarization, Refinement...
Every team member knows the structure and how to update it.
As the project evolves, new employees join and educating them on folder structure is the least of the priority. Gradually the process fails. New personal folders get created on the common folder, files start getting saved in local machines, version mismatch, customer complaints....
The third lesson, I think the most important one, is to go slow. As we all know, cooking on small flame is the best way to cook. The flavor is enhanced and all items are consistently cooked. I have seen novice cooks toggle between 'High' and 'Low' flames. The cooking is never tasty.
Similarly in ERP implementation, there will be situations when things don't go your way. Project Managers react to every small events like it is a catastrophe. Do not do that.
If cooking teaches you anything, it is to stay calm. Things have a way of sorting themselves out.
#ERPConsulting

Sunday, January 29, 2023

Top 7 ERP Trends for 2023

Another exciting year begins for ERP Market. After almost three years of self imposed isolation due to COVID, companies are cautiously optimistic and are starting to allocate IT Budgets, most of which will go to investment in implementation or upgrade of their ERP Systems.  

But here is the catch.

The last three years saw the explosion of technology in the form of AI, ML, RPA, Blockchain and many other technology advancements. Due to this the expectation of Businesses from ERP has undergone significant changes when it comes to ERP. The question that I hear from every customer is 'What can we do more with ERP?' and 'How can Senior Management see demonstrated value out of our ERP Investment?'. Unfortunately many vendors still position their ERP System as an efficient back office solution and not as a value enhancer. 

This has to change. ERP Systems integrating with AI and ML is the bare minimum expectations these days. Good news is that many ERP vendors realize this and are taking baby steps to incorporate ML into their ERP Systems. For example, Oracle has incorporated OCR (Optical Character Recognition) into its Cloud Application in which the ERP system can be 'taught' to read different formats of Supplier Invoices. 

Let us come back to the key topics. Following are the top ERP Trends for 2023. Most of these trends are continuation of the existing trends that are accelerating compared to the earlier years. 

1. Cloud Adoption: Much has been written about the benefits of Cloud Adoption. Cloud adoption as a trend started sometime in 2016 or 2017. In the last 5 years cloud offerings of the ERP Vendors have stabilized. Vendors seem to have addressed many of the early concerns like system security and system performance. In the last two years, I have implemented multiple Cloud Implementations and only one EBS (Oracle E-Business Suite) On Premise project. That last one was where customer wanted to add more businesses to their existing on-premise ERP Application. 

On their part, ERP Vendors have also tailored their Cloud Offerings to suit the requirements of different industries and incorporated customization options to handle specific custom requirements. This helps them expand their offerings to a variety of industries

Another opportunity for Cloud Adoption is to move the current On-premise applications to the cloud, customization and all. ERP Vendors provide IaaS (Infrastructure as a Service) option where the customer can move their On-premise ERP Applications to Cloud Infrastructure. This has two advantages, one, the companies can monetize their non-core IT Infra assets like Servers and two, they can convert their existing Capex to Opex which can be more predictable and controllable. 

2. AI and ML Utilization: ERP Vendors need to integrate AI, ML and other advanced technologies to stay in the race. Customer Demand is the driver for this trend. There are many business processes where AI and ML can add value. These include intelligent document reading and transaction creation, Demand Planning, Inventory Management, Production Planning and Production Scheduling being a few. Different vendors are focusing on different business areas for technology integration. I implemented Automated Vendor Invoice Processing and it was not very successful, but today, with ML being incorporated in this process, the updated offering is very user friendly.

3. ERP on Mobile / Mobile First ERP: This is the next logical step to Cloud Adoption. The customer is expecting ERP on Mobile. This is a low hanging fruit and help the IT Department to show value to the senior management. Year 2023 and beyond will definitely see more of this trend. Don't be surprised when the guy sitting across you at the airport on the airport is connected to the cloud ERP system and is raising a Purchase Requisition. If not all areas, many of the senior management facing areas like requisitions, Sales Invoices, Inventory Onhand Quantity tracking, Critical Customer tracking and Budget Controls are ripe to move to mobile, and they will.

4. 'Mobile-ization' of ERP: This is different from the point 3 above. Once the customers adopt to Cloud, it becomes easier to integrate different third party apps with ERP. ERP application will become like a mobile operating system that allows different apps to work seamlessly. For example, customer can integrate their ERP application with niche third party applications that will enhance the value add. Customers are already integrating their ERP systems with Niche CRM, SCM, Planning and Budgeting, Advanced Production Planning and Scheduling systems. This trend will accelerate. The ERP Server will become like Mobile Phone. 

5. Digitization Initiatives by Governments: These are exciting times for technology enthusiasts who track government initiatives in the area of technology. Governments of different countries, states, cities and even municipalities, from Africa to Alaska and Greenland are focusing on digitization and digitalization initiatives with the goal of improving the efficiency and transparency of Government Services. For example, in year 21-22, the Budget allocation for Digital India Initiative of Government of India increased by 68 percent over the previous year. ERP remains the backbone of these initiatives. However, due to data sensitivity, these initiatives are likely to be more on on-premise  servers rather than on Cloud. 

6. Analytics and Big Data: While new customers are taking baby steps towards selecting and implementing ERP Systems, mature ERP adopters are looking to reap value out of their ERP Investments through actionable information, insights and intelligence. Predictive analytics helps to identify potential risks in advance while 3-D Data Analytics help to cull out hidden insights that can help strategic decision making. Most of the ERP Vendors provide Analytics on the cloud that can easily integrate with existing ERP Systems. This trend will accelerate in 2023

7. Industrial Internet of Things (IIoT): In the last few years, companies have been investing big on IoT (Internet of Things). For example, it is estimated that 35 Million IoT devices will be installed in the year 2023. While IoT devices have been churning out vast amount of data, the integration of this data with the ERP Systems for planning, scheduling and analysis was far from satisfactory. With the advances in Big Data Analytics being integrated with ERP, this is bound to change. ERPs will be vastly efficient to cater to the data provided by IoT devices. ERP Vendors will have to work towards making this integration smoother by standardizing the IoT data and delivering APIs to seamlessly integrate IoT devices with their ERP applications. 

While these are seven trends that will guide ERP Market in 2023, these are not all. Additional trends to watch out for include Personalization of ERP, Integration of Industry 4.0 with ERP, the initiatives of governments towards securing Personal Information (GDPR for example), rapidly evolving Technology Landscape (Who would have thought of ChatGPT just two months ago?) etc