By Accenture
It has been more than 18 years since ERP (Enterprise Resource Planning) solutions were implemented in Korea by Accenture in 1994. In the past, the ERP system was mainly used for MRP (Material Requirements Planning) to optimize inventories, but the influence of ERP has expanded to cover the PLC (Product Lifecycle) of an enterprise in all industry segments. Moreover, almost all Korean companies have implemented ERP systems and accordingly, Korea has accumulated world-class experiences and capabilities for ERP implementation and retained related professionals.
ERP has become one of the crucial systems for business operation. According to the survey on “key benefits targeted by enterprise systems” conducted by Accenture of the highest-level executives of global companies, “better management decision making” ranks first, and “improved financial management” follows.
Furthermore, “ease of supports for business expansion, growth and increased flexibility” is also seen as a crucial benefit of ERP. According to the survey, “globalization of domestic companies” and “diversification of business coverage” have been accelerating continuous ERP upgrades and integration.
As domestic companies expand their business territories overseas, integrating whole business processes has become one of the key business requirements which ERP solutions can address by supporting this integration. The combination of several discrete solutions only increases the complexity of IT architecture. For instance, an automotive supplier in Korea implemented its IT system based on ERP solutions to cope with the business requirements of the real-time management of domestic and overseas inventory including stock-in-transit and planning of world-wide production.
One of the approaches that has been tried since 2005 to cope with the needs of integrating systems located around the world is GSI (Global Single Instance). GSI is now a big trend driving the integration of businesses over the world, being adopted by major companies.
GSI enables a company to simultaneously utilize one server and one ERP solution for its headquarters and overseas subsidiaries, leading to secure enterprise information visibility, credibility and integration as well as reduced costs for implementation and maintenance.
The critical success factor of implementing GSI-based ERP is to standardize business processes and main master data. The effectively streamlined business process of a company enables the local based company to deliver GSI project successfully.
Standardization of master data such as products, customers and materials is a crucial prerequisite to GSI implementation, and the utilization of the MDM (Master Data Management) system has been increasing to guarantee consistency among discrete solutions.
The latest ERP solutions suggest various options of delivering additional value by utilizing enhanced information technology and not being limited to only meet the basic requirements. Three innovative trends that Accenture ERP professionals voted on last year are as follows.
Business leaders today are looking for faster queries to bigger databases. Their organizations crave real-time data, immediate and easy access and self-service, user-centered systems for delivering insight.
That’s why there is so much emphasis on investment in analytics capabilities, competencies and tools. But there is widespread frustration with the limitations of current analytics systems. Several business-intelligence barriers get in the way of effective, informed decision making. To begin with, most company data are still distributed throughout a wide range of applications and stored in several disjointed silos.
New in-memory systems make it much easier to rapidly process a greater volume of data in real-time, and in-memory technology is moving into the corporate data center. Google searches owe at least part of their speed to the disk-less memory used in the company’s giant storage farms. It has become possible to store data sets of whole companies entirely in main memory, which offers performance orders of magnitudes faster than that of traditional disk-based systems.
By 2012, according to Gartner, an IT research firm, 70 percent of all Global 1,000 organizations will load detailed data into memory as the primary method of optimizing the performance of their business-intelligence (BI) applications.
The use of in-memory technology marks an inflection point for enterprise applications. In-memory data warehousing finally offers the promise of real-time computing; business leaders now can pose ad hoc questions to the production transaction database and get the answers back in seconds.
Mobility has become the core to every industry. Integrating ERP with mobile devices helps to transform business-to-consumer (B2C) relationships, to create new services and to improve client retention. Business-to-business (B2B) mobile applications are being widely adopted to improve supply chain efficiencies. Business-to-employee (B2E) mobility initiatives to drive workforce productivity and customer service are becoming table stakes to compete in today’s economy.
The explosive growth of mobile devices can be seen in almost every industry segment. Chief sales officers are embracing new mobile workflow applications to enhance productivity and improve customer service capabilities.
Organizations are rapidly equipping employees with mobile devices and mobile enterprise workflow applications to support daily workflow. For example, Pharma representatives are using iPads as a way to educate time-pressed physicians about new drugs so they can quickly understand main effects, side effects and so on. Communications and construction companies are embracing mobile technologies to improve dispatch, scheduling and reduce unproductive truck rolls.
Some Korean companies are increasing the use of enterprise solutions through mobile solutions. An active adoption of the technology that enables access to important enterprise information “anytime” and “anywhere” is under way.
Mobility is changing the way consumers and businesses operate. It is creating special opportunities for organizations looking to stay competitive in today’s marketplace and organizations must therefore create an effective mobility program to be able to compete and thrive in the global marketplace.
Most ERP customers look for a way to upgrade their IT infrastructure with small investments due to the struggling economy condition. But with competitive pressures mounting, they can no longer tolerate underperforming systems and strongly require improved performance, greater differentiation and lower the total cost of ownership now.
Cloud computing enables lower infrastructure and application costs while increasing system performance. Although the term “cloud computing” is relatively recent, elements of the concept, such as timesharing and virtual machines, have been around for several decades. A key catalyst is the success of major internet companies Google, Amazon and Microsoft. The highly global and scalable infrastructure these companies have built to power Internet search, electronic commerce, social networks and other online services forms the core of cloud computing.
Cloud computing constitutes a major step in the continued industrialization of IT and will play a role in enabling high performance. The changing business model, underlying technologies and architecture will likely lead to a wave of innovations. By using cloud computing technology, an IT professional can quickly add business value to run applications and develop software off-premise.
Like any other new technology platforms, cloud computing brings risks in the areas of data management, security and privacy, integration and service quality. Continued success with the cloud will thus require careful planning, smart navigation and ongoing adaptation. Companies should take incremental steps toward this new environment so they can reap early benefits for applicable business situations and learn how to deal with associated risks. Accenture helped the world’s largest publicly traded copper company, in ERP transformation, leveraging private-cloud architecture to cover major acquisition.
Nowadays, ERP solutions are not an IT solution just for certain big companies. Many small and medium size companies already have used ERP solutions and upgraded it continuously to operate their core business processes. In general, IT systems are to support business requirements, but there is a wide range of ways to support business and reduce costs of IT.
By keeping eyes on the trends of technology innovation which may not be satisfying current business process and IT infrastructure, you will identify various routes to take advantage of ERP solution more effectively with less cost. If you are a CIO (Chief Information Officer), why don’t you think of Steve Jobs’s saying, “Stay hungry, stay foolish” differently. “Stay hungry, stay smarter.”
This article was provided by Accenture Korea.