In our top ten predictions for 2013 blog posted last month, we highlighted mobile ERP systems as one of the key trends to gain momentum in the coming year. As we are seeing in both our ERP software selection and ERP implementation practice areas, this will likely be the first year we see mobile ERP migrate from a buzzword with a lot of hype to actual adoption by small and large organizations alike.
One of the components we didn’t specifically call out within this trend, however, is the role of two-tier ERP among decentralized organizations. While mobile software typically refers to accessing core ERP data using devices such as iPads and smart phones, it can also refer to “mobile” or satellite parts of an organization that need to access core operational data without a full installation of the ERP software. This is becoming increasingly common in organizations with operations spread throughout the globe, including those that have grown organically (by establishing sales and distribution offices in multiple locations) or by acquisition. Most of our clients fall in the upper mid-market – meaning our clients are typically multi-national organizations with annual revenues over $500M – which is where we are starting to see more traction related to this trend.
In these cases, the core operations or parent company may have a traditional, on-premise ERP system such as SAP, Oracle or Microsoft Dynamics to run financials, inventory, customer orders and other master data. However, it may not be feasible for the smaller satellite locations or subsidiaries to invest in the infrastructure or cost associated with the on-premise ERP solution. Alternatively, these subsidiaries may instead opt to adopt a simpler and potentially less costly solution such as NetSuite, Plex Systems, Workday or Salesforce, and integrate it back to the core ERP system as the single “record of truth.”
Here is the big question related to this approach: doesn’t it run counter to the single, standardized ERP system intended to obliterate disparate systems, data silos and technical complexity? Yes and no. The two-tier approach can provide niche areas of functionality without the need to invest in large ERP systems that may otherwise be overkill. Examples include Salesforce to address customer relationship management (CRM) and Workday to address human capital management (HCM).
In order to overcome the system spaghetti syndrome, these systems need to tie back to key master and global transactional data housed in the core ERP system. This is obviously easier said than done with data housed in the cloud, but it is becoming more possible with the increasingly robust integration and development tools available. Our larger international clients are typically allergic to ERP implementations without tight integration between systems.
What does this mean to you? It means that you have more alternatives than ever before. It is no longer necessary to choose between mutually exclusive options such as traditional on-premise enterprise systems versus SaaS solutions. Now, even larger organizations can pick and choose what makes sense to the various parts of the organization. However, as we have learned in our ERP implementation practice, this puts more pressure on key implementation activities such as solution architecture, system integration, business process management and organizational change management. These risks can indeed be managed with the right expertise, but they are still risks nevertheless.
Learn more about choosing and implementing the right software solution (or solutions) for your organization at Panorama’s 2013 ERP Boot Camp. And happy holidays from all of us at Panorama Consulting!