Future Trends in Enterprise Systems

Term 3, MIS

CONTENTS
Executive Summary ......................................................................................................................................................... 1 Introduction ........................................................................................................................................................................ 2 Understanding present ERP systems ....................................................................................................................... 3 Vendors and services offered by them .................................................................................................................... 3 Oracle ................................................................................................................................................................................ 3 SAP ..................................................................................................................................................................................... 3 Salesforce.com .............................................................................................................................................................. 4 Microsoft Dynamics .................................................................................................................................................... 4 Challenges encountered by current businesses with their ERP systems .................................................. 4 New trends in Enterprise systems ............................................................................................................................ 4 1) Internet based enterprise systems ............................................................................................................. 5 Cloud Computing..................................................................................................................................................... 5 Service Oriented Architecture ........................................................................................................................... 6 Platform as a Service ............................................................................................................................................. 6 BI, data analytics and its integration with ERP .......................................................................................... 7 Loosely coupled systems/ modular Systems .............................................................................................. 7 2) 3) Mobile based enterprise systems ................................................................................................................ 7 Evidence based Mobile ERP................................................................................................................................ 8 Social Media & Enterprise systems............................................................................................................. 8 Evidence based Social ERP .................................................................................................................................. 9 ERP for SMEs ...................................................................................................................................................................... 9 Evidence based SME ERP - 1 ........................................................................................................................... 10 Evidence based SME ERP - 2 ........................................................................................................................... 10 Key technologies that will support ERP trends ................................................................................................ 10 Conclusion ........................................................................................................................................................................ 11 REFERENCES ................................................................................................................................................................... 12

LIST OF FIGURES
Figure 1: Components of a comprehensive enterprise solution
Figure 2: A collaborative enterprise solution

3
5

Figure 3: Future trends in enterprise systems

Figure4: Service modules of SOA of BEPET Figure 5: Data accessed through Mobile ERP.

5
6 8

1|Page

EXECUTIVE SUMMARY
Enterprise Systems are an integral part of how organizations do business, and encompass the entire spectrum of functions in the firms value chain, starting from sourcing, accounting, employee management, to managing customer relationships. Nowadays, they also include external partners like suppliers and customers to improve the decision making process. With increasing globalization, and widespread penetration of the internet and mobile technologies, its scope is only set to increase, and would include data analytics, cloud computing, SaaS and many such standards. This report is thus an attempt to capture this growth and analyse enterprise systems as they are and as they are expected to be in the years to come. We have analysed present enterprise systems, their scope, the various service providers and the challenges that companies face in the present scenario. Then, we have tried to understand the direction of enterprise systems in future, by dividing them into internet based; mobile based and social media base systems. We have also tried to understand the influence of enterprise systems in SMEs. Throughout the report, we have taken examples of companies who have implemented solutions and the reasons why they were successful, so that readers are able to get a more holistic idea of the future enterprise systems landscape.

INTRODUCTION
Enterprise systems are a set of software solutions that help businesses in improving their business processes, flow of information, analysis of data etc. ERP systems, CRM packages, data analytics and business intelligence tools are all a part of enterprise systems. Enterprise systems started with the introduction of manufacturing resource systems, which catered to manufacturing enterprises. However, gradually they expanded in scope to include other business functions like accounting, human resources etc., thus creating an allencompassing system that catered to the entire business. ERP systems growth was linked to the difficulty companies faced due to increasing incompatibilities among the data of different departments. This caused great loss of business, and hence, ERP systems saw rapid growth since its introduction, as most companies raced to implement it in their business to gain competitive advantages. A typical Enterprise System implementation, consisting of parts of infrastructure, network and function ITi, involves selection of the vendors and required functionalities, successfully adopting them (training, change management and timelines) and their subsequent exploitation for bottom-line growth. Presently, Enterprise Systems are an integral part of most small and large businesses, and strongly influence how companies do business. With its various modules mirroring the best practices of the industry, it is now more of a competitive necessity. Integration of the various modules like SCM, CRM, PO, HRM etc. and consolidation in the industry are the latest trends that are building capabilities. For example, by sharing inventory information with vendors, and analysing POS data, Walmart has created a competitive advantage for itself. Similarly, integration has helped Harrahs casino, Zara, and many other companies. With such an illustrious record of growth fuelled by growth of IT and globalization, enterprise systems are definitely an integral part of future businesses as well. With increasing integration 2|Page

of functionalities, better availability through the Cloud infrastructure, services on demand and use of such data for analytics are some of the trends that would shape the future of enterprise systems. This report is an analysis of the entire enterprise system eco-space, and how upcoming trends like increased mobile and internet availability etc. will influence it. We aim to explore the direction that enterprise systems are going, and how big data, analytics and business intelligence will play a cardinal role in it.

UNDERSTANDING PRESENT ERP SYSTEMS

Enterprise Systems or Enterprise Information Systems are all about managing the internal requirements of the enterprise by managing the resources of the company and making the back office more efficient and responsive. They are built on a plank of integrating best practices of industries, and making information flow across functions quick, for better decision making. The functional scope of a comprehensive enterprise system solution can be categorized as follows
Self Services Strategic Financial Workforce Operations Enterprise Analytics Analytics Analytics Financial Management Corporate Financial Financials Management Accounting Accounting Governance Supply Chain Employee Employee Lifecycle Employee Human Management Relationship Management Transaction Capital Purcha Invent Produc Project Mainte Quality Distrib Sales Operations Management Management Manageme Edition 2003 sing ory tion Manag nance Manag ution Order nt Travel and Corporate Real Corporate Manag Environment, ement Incentive ement Manage Management Health & Commission Estate Services ement Information ment People Process Application SAP Safety Management Integration Integration Integration Platform NetWeaver Figure 1: Components of a comprehensive enterprise solution Analytics

mySAP ERP

VENDORS AND SERVICES OFFERED BY THEM

The following are some of the major Enterprise Systems providers are as follows

ORACLE
Oracle is one of the oldest companies to provide ERP solutions. It has an entire suite of products to cater to various needs of the companies. The major products that it provides are Oracle Analytics, Oracle Cloud Services, Oracle E-Business Suite (CRM, SCM, HRM etc.), Big Data Analytics etc. It also took over PeopleSoft to acquire its HR management software. Oracle is very well reputed for its financial solutions. With great services and support, it enjoys tremendous respect across the industry.

SAP
Enterprise is enhanced by mySAP ERP through extended functionality, usability, Business Content and SAP NetWeaver infrastructure. It also eases use through standardized user interfacing approaches. 3|Page

SALESFORCE.COM
Salesforce.com is a global enterprise services provider, which differentiates its products by providing decoupled modules on the cloud through its website on a pay as you use basis. It has most major modules in its kitty, and is most popular for its CRM Module. Its products can be categorized as Sales Cloud, Data Cloud, Collaboration Cloud, Service Cloud and Custom Cloud. Now it has also expanded into the social enterprise arena through acquisitions.

MICROSOFT DYNAMICS
This is also a line of ERP and CRM solutions which are sold through a network of partners who provide specialized services through resellers. These solutions are primarily designed for small and medium enterprises, and are sold as SaaS or as an on-premise software.

CHALLENGES ENCOUNTERED BY CURRENT BUSINESSES WITH THEIR ERP SYSTEMS

Integration Challenges Presently, most of the major ERP systems suffer from a problem of implementation, as integration of the modules and removal of data inconsistency becomes a major problem. Different departments often run on different databases, thus creating difficulty in creating a common data view. Companies are unwilling to go for business process restructuring, because of customization, costs shoot up highly, and monitoring and maintenance become difficult. Moreover, of quick outdating, versions may go out of maintenance, and hence companies are increasingly moving towards SaaS. Service Challenges Companies also face a lot of challenges with regards to service and service levels. They find it difficult to roll out new services with quick response time and there is often an inconsistent experience level across delivery channels. For example, at MDCM, different divisions were facing problems as services were being offered in silos. This also causes a major difficulty in up-scaling, as complex infrastructure is difficult and costly to upgrade. Because of this, companies also find themselves hostage to expensive and obsolete technologies and applications and inconsistent data models which affect both, the bottom-line and brand equity of the firm.

NEW TRENDS IN ENTERPRISE SYSTEMS

The future enterprise systems will focus on collaboration, involving all major stakeholders in a firm. It can be represented diagrammatically as followsii-

4|Page

Collaborative Planning Collaborative Logistics Collaborative Product Development

Fig 2: A collaborative enterprise solution

We know that at present ERP focuses primarily on transactional data, and is aimed at standardizing business processes across industries and functions. However, the future, with increasing penetration of the internet and mobile, will make increasing use of this transactional data to make business sense and fact based decision making. The following are some of the major trends that we feel will influence the way companies interact and engage customers in the new ecosystem.

1) INTERNET BASED ENTERPRISE SYSTEMS

The trends in internet based enterprise systems can be captured diagrammatically as follows

Fig 3: Future trends in enterprise systems

CLOUD COMPUTING
Traditional company wide applications, the ubiquitous standard for years, has now reached saturation as companies are finding it increasingly difficult and costly to opt for upgrades, thus delaying them for months. With widespread use of reengineering, customizations and configuration, the process of upgrades becomes even more difficult, as companies now upgrade because of technical obsolescence rather than business needs. Cloud Computing will thus increase widely in scope as standards like IPv6 become ubiquitous.

5|Page

The importance of cloud systems can be seen through the case of AME Corporation manufactures highly engineered industrial products. It specializes in rubber, plastic products and sealing solutions. The company wanted to move all their business processes to cloud so that there could be easy access of information and improved collaboration among the staff worldwide. The challenge was integration with online content sharing platform. The company chose Automatica to implement the cloud ERP in various modules like distribution, inventory management, customer management and financial managementiii. The results were quite tangible with increase in productivity gains and improved operational efficiency.

SERVICE ORIENTED ARCHITECTURE

With the increasing exposure to the internet, Software as a Service is fast catching up. Similarly, Service Orientation Architecture is a related trend that will shape the Enterprise systems future. As an example, we see how British Energy Power & Energy Trading (Bepet) revisited its software modularization by resorting to a service oriented model for delivering IT iv. It further had to negotiate new terms with its software suppliers to let this happen. It believed that SOA would support the value added processes rather than just delivering the functionality. It divided its business applications into 3 categories which can function as independent units of service as shown in the below figure-

Service box1

Service box2

Task with human decision

Functional service

Service box3

Technology service

Figure4: Service modules of SOA of BEPET

It was a successful case of SOA implementation where the energy group believed the increase in flexibility to respond to changes in energy market.

PLATFORM AS A SERVICE
At present most of the packaged software provide some functionality for customization. However, increasing costs and difficulty of upgrade make this an expensive proposition. Thus companies are moving towards cloud solutions and building from scratch. Looking ahead, PaaS would disrupt the dilemma of build or buy. The application development tools and the platform will enable "buy and build". PaaS extensibility would mean that ERP can be effectively aligned with evolving business requirements.

6|Page

BI, DATA ANALYTICS AND ITS INTEGRATION WITH ERP

Business Intelligence is the technology of deriving meaningful results out of practically limitless data to drive business decision making. In future, it would have a major say in how companies do business by providing them with invaluable insights about customers and other trends. EVIDENCE BASED BI Eat is a chain of restaurants with over 110 branches in UK. It is very popular for its sandwiches and fast food. A team comprising of 11 IT professionals manage day to day data and running of Eatv. Many businesses were affected by London Olympics 2012 and Eat wanted to make sure that there is no staff shortage to adequately meet the raise in demand. Eats readiness was augmented by its flexibility due to IT solution. The real magic during Olympics was because of BI tool that Eat deployed before Olympics. The real-time data analytics enabled the employees to make real-time decisions by quickly identifying the consumer purchase behaviour, store location, staff behaviour and also the product throughput. The store managers and area supervisors had smart devices that were integrated with all devices and kiosks with the POS data. This infrastructure helped them provide the best customer experience and improve their performance.

LOOSELY COUPLED SYSTEMS/ MODULAR SYSTEMS

With the failure of a large number of ERP implementations due to vendor-lock in, nowadays, enterprises are looking at buying only those modules that they need. Hence, standardizationvi and decoupled systems hold the key to future implementations. For example, saleforce.com is providing individual modules that help SMEs and other companies to achieve their business objectives.

2) MOBILE BASED ENTERPRISE SYSTEMS

Mobility for Enterprise Resource Planning is something that has caught up very fast with the increasing penetration of smart phones among users. The accessibility of ERP was possible because of mobile device support technologies. In several companies, it is very important for sales on feet to access the data stored in ERP to understand the client, the product and send/receive information about the task he/she has at hand to be served to the customers at their locations. There has been increasing usage of Mobile ERP by SMEs. The concept of virtual workplaces has evolved and mobile ERP supports this by standardizing activities and reducing the manpower required to handle on-premise activities.

7|Page

Fig 5: Data accessed through Mobile ERP.

There are several issues of safety, privacy and security that arise due to multiple sources of data accessibility. The importance of trust, IP security and regulatory environment emerge more vigorously for the company. There are several ways the companies can mitigate risk like using secure id devices with high security platforms and allowing only authorized personnel. Given the risk, there are also several advantages to using the mobile ERP. The following section on Evidence based Mobile ERP deals with a successful implementation of Mobile ERP.

EVIDENCE BASED MOBILE ERP

BT Industries is worlds leading manufacturer and distributor of engineered products. As the largest manufacturer of trucks for warehouses, BT Industries has the onus of service and repair to keep the trucks in condition. There are close to 5000 service visits per day by technicians for both emergency and scheduled trips. Maintaining inventory of the service parts and scheduling such huge number of trips was a daunting task for BT industries. Handheld devices were connected via mobile networks and integrated with the customer data and inventory data held in a centralized ERP system, Movexvii. Before the mobile integration, the technicians had to make lot of phone calls and back-office checks. The new devices were equipped with GSM / GPRS systems. Parts are sent for service as and when required. The new system enabled the simultaneous repair and maintenance decreasing the number of visits as well as decreased shortage of spare parts and stock levels. This helped the company in saving huge maintenance costs and also in reducing its office locations from 7 to 2 in UK.

3) SOCIAL MEDIA & ENTERPRISE SYSTEMS

There has been a change of internet orientation in people from internet for fun to internet for productivity & services, in particular internet networking in the business world. The network effect is pulling several people to social media, creating a platform for business and a space for marketing. There are several spaces where Social media meets ERP. Social ERP refers to companys use of social media dedicated to company specific data, content sharing and coordination of business interests and activities both internally and externally. Social ERP is going to differ from the traditional ERP in a few ways. The new Social ERP systems are going to give the supply chain players and the customers, access to live data but selectively share the company brands CRM data. Supply chain partners will hold trust in the data since there would be social layer on ERP and they would know whether the source is a trustworthy

8|Page

person or notviii. ERP solutions are continuously using Social media technologies to evolve into new Social ERP solutions. Following and trending is very important for everybody. In the same spirit relevant enterprise information can be filtered and reported through ERP dashboards and to employees smart phone devices. The employee productivity, coordination and decision making can be improved through such social media interfaces. Such ERP social networking technologies will help the employees get a big picture though a single glance, receive notifications, follow relevant information and also stay connected with ERP on their smart devices.

EVIDENCE BASED SOCIAL ERP

Salesforce.com had added mobile device support among several other features in its new updated version of social networking tool Chatterix. The new Chatter provides the next generation mobile and social CRM to its clients and helping them transform the way they connect to customers. There are around 200,000 active Chatter social networks in operation as of date and a survey of Salesforce.com revealed that the client meeting volume reduced by 25% on an average. With extensive social networking tools, Salesforce.com is has ventured into social ERP. For this it is partnering with Infor where Infor will use Salesforce.coms Social ERP to view data from its ERP, order management and also marketing. InForce Everywhere was delivered to Infor within a few months of this partnership. Inforce Everywhere has been built natively on Force.com which is Salesforce.coms social ERP platform for social applications x.InForce everywhere is using social, mobile & open functionalities of Force.com and Chatter to achieve efficient social network and ERP integration.

ERP FOR SMES

SMEs have the requirement of a streamlined enterprise resource planning software but often many are discouraged by the high-maintenance, capital intensive and marginally effective ERP systems. A suitable ERP could support the strategic and business objectives better. When the ERP is not fully integrated with day to day business processes, there is a high chance that the implementation could be a failure. The challenges arise from the fact that most SMEs need a customized ERP platform which suits its needs better. Traditionally the ERP software available was standardized according to different industries and for SME implementation high customization was required which would turn out to be very costly. Moreover, the standard ERP softwares provide the functionalities which SMEs did not need and lack in the specialized modules which they need. Todays ERP space has evolved into a diverse range which can host a solution for every SME. For example, Salesforce.coms Cloud ERP services are highly customized according to SMEs requirements. There are also simple implementations for selective modules based on each companys business requirement. There are a lot of companies who are implementing webbased ERP solutions. The following section on Evidence Based SME ERP deals with a novel solution developed by Microsoft for SMEs and also a successful ERP implementation in a SME in India.

9|Page

EVIDENCE BASED SME ERP - 1

Microsoft Dynamics is a cloud ERP solution developed exclusively for SMEs. Microsoft Dynamics solutions can be either cloud or on-premise deployments based on customer requirement. Pandora, a jewellery manufacturer and retailer company has deployed the CRM, GP suites of Microsoft Dynamics in cloud and on-premise forms xi. This is helping the company to deliver excellent customer experience and products and support the companys growth.

EVIDENCE BASED SME ERP - 2

Oxford bookstore is an SME of 25+ stores and a Rs 25 crore organization. It has been one of the early adopters of the cloud ERP. In 2008, Oxford bookstore had problems of IT infrastructure. Their inventory management system was integrated with the Point-Of-Sale system and due to challenges in sales function their control over inventory was reduced. Head of finance of Oxford bookstore, Subhro Biswas expressed that book retailing was prone to over stocking of SKUs and huge and slow moving inventoryxii. Oxford has a decentralized approach and one title could have multiple codes which led to huge inventories, which further added to its shortcomings. There was an immediate necessity to regulate operations and manage transactions and inventory. There was dire need of transparency and flow of information across various departments in the organization. These functions could be fulfilled by an ERP system. But Oxford being an SME could not afford the ERP implementation that is required. Without huge IT investments or problems of scalability, cloud ERP could substitute the ERP implementation serving the required functionalities. The management had apprehensions about the SaaS model citing security limitations and also irreversible dependency on the SaaS vendor. They overcame this by making the vendor a fully involved business partner. Currently the Cloud ERP initiative has centralized all Oxford titles across all outlets into the database. The project cost was around 1 crore which was to be paid in 5 instalments over 5 years. The following are the benefits that Oxford enjoyed with Cloud ERP implementation: a. b. c. d. e. f. Revenues increased by 20% Increased customers visiting Oxford bookstores by 25% Increased bill values by 20% Online sales increased by 100% Reduced carrying cost of inventory CRM was easier where loyalty programs and discount schemes could be managed efficiently

KEY TECHNOLOGIES THAT WILL SUPPORT ERP TRENDS

a) IP Security issues could be addressed with the upcoming internet technologies and internet protocol versions (IPv4, IPv6), which provide network layer security. b) Cloud Cloud computing industry is growing rapidly with internet giants like google dedicating considerable resources towards its research and development. Cloud offerings- IaaS, PaaS and SaaS, are increasingly being adopted by companies.

10 | P a g e

c) ERP Integration applications Depth and quality of the new applications with data and legacy platforms integration on mobile devices, cloud infrastructure as well as other platforms. d) Business Process Management Increasing research, collaboration for application building with companies. There is increasing awareness among companies about the business process streamlining with ERP and the elevated rewards with social ERP and other emerging ERP trends. Companies are willing to partner and coordinate by providing resources for creating conducive development. e) Highly Specialized ERP platforms- SOA, EAI, grid computing etc will evolve extensively. Big ERP vendors like Oracles, SAP, Microsoft would create the best alliances and partnerships to achieve highly specialized platforms. f) Analytics Lot of importance for analytics and usefulness of big data will make companies adopt the infrastructure or service models to enable easier adoption of the ERP trends.

CONCLUSION
ERP systems have been extensively used by companies to improve their top and bottom lines. They have become integral part of the way business is done today. Technologies are now erasing the boundary between the companies, their competition and the clients. Hence there is a dire necessity that enterprises need to be equipped with the capability to handle the new generation challenges. Being proactive to such changes and capturing the business improvement opportunities is rewarded many more times compared to a reactive approach. SOA imparts flexibility to the firms for BPR as and when they enter new products, markets, geographies and businesses. There is Big Data generated everyday due to a host of devices, consumer social media activities and even the sheer size of increasing transactions and business. Analytics has obtained a new business meaning and there is increasing importance to BI, CRM, OLAP and the way ERP integrates with analytics. Cloud computing in speed, space and service has emerged extensively opening new arenas and opportunities for companies to improve their business. Cloud ERP has been particularly a boon to SMEs and other companies as well. Mobile ERP has led the companies to improve their service levels simultaneously cutting down costs. ERP mobility provides real-time data to procurement, quality, production, sales and service teams which generates increased sales and business performance. Social networking has become an integral part of how the business is done and off late companies have been exploring the deployment of Social ERP to help them increase innovation, decision making, productivity, and collaboration within their employees. The ERP trends need to be supported with high security technologies, improved infrastructure, highly sophisticated ERP platforms and robust integration applications. The company should foresee the opportunities and identify the right ERP technologies that can add value. And help the company to reconfigure and reorganise according to the changing markets, and bring agility and flexibility in their business services.

11 | P a g e

REFERENCES
Andrew McAfee. (November 2006). Mastering the Three World of Information Technology. Harvard Business Review. 11 (1), p40-48.
i

ii

Thomas H. Davenport. (August 2000). The Future of Enterprise System-Enabled Organizations. Information Systems Frontiers.2 (2), p163-180.
iiiGress,

J. (2012). Mid-sized Manufacturer Gains 400% Productivity and Creates Powerful Integrated System with Acumatica. Available: http://www.acumatica.com/images/uploads/Acumatica_Case_Study_AME_Corporation_4.pdf. Last accessed 19th Mar 2013. Beckett, H. (2007). Case studies in implementing service oriented architecture (SOA). Available: http://www.computerweekly.com/feature/Case-studies-in-implementing-service-orientedarchitecture-SOA. Last accessed 19th Mar 2013.
iv v Scott,

M. (2012).Case Study: Eat deploys BI to take on Olympic challenge. Available: http://www.computerweekly.com/news/2240118390/EAT-deploy-Qlikview-to-take-Olympicchallenge. Last accessed 19th Mar 2013.
Deborah J. Nightingale and Donna H. Rhodes. (March 2004). Enterprise Systems Architecting: Emerging Art and Science within Engineering Systems. MIT Engineering Systems Symposium.14 (1), p12-25.
vi

Adshead, A. (2009). Case study: mobile ERP - Efficiency in connectivity. Available: http://www.computerweekly.com/feature/Case-study-mobile-ERP-Efficiency-in-connectivity. Last accessed 19th Mar 2013.
vii viiiMetz,

A. (2010). Social ERP: What is it?. Available: http://socialmediatoday.com/metzmash/105615/social-erp-what-it. Last accessed 18th Mar 2013. Holland, M. (2013).Salesforce updates business social network Chatter . Available: http://www.cloudpro.co.uk/saas/collaboration/5403/salesforce-updates-business-socialnetwork-chatter. Last accessed 19th Mar 2013.
ix xInfor.

(2012). Infor Delivers Inforce Everywhere to Connect Salesforce CRM with ERP . Available: http://www.infor.in/company/news/pressroom/pressreleases/Inforce/. Last accessed 19th Mar 2013.
xiMicrosoft.

(2013). Global Jewelry maker, Pandora, uses Microsoft Dynamics to manage rapid growth. Available: http://www.microsoft.com/en-us/dynamics/customer-success-storiesdetail.aspx?casestudyid=710000001508. Last accessed 20th Mar 2013.
xiiChidambaram,

V. (2010).With SaaS ERP, Oxford Bookstore increased its revenue by Rs 3.4 crore. Available: http://www.cio.in/case-study/erp-solution-delivered-saas-style-bumped-oxfordbookstores-revenue-rs-34-crores. Last accessed 19th Mar 2013. 12 | P a g e