News Column

Delivering Integrated ERP Solutions

August 22, 2014 Staff

The global ERP market has reached a stage of major transition as organisations focus on the value and flexibility of their investment in strategic software and its ability to provide a fully integrated, multi-dimensional view of the business. Larger customers are looking for ways to open up their lumbering legacy ERP systems to take advantage of the benefits of cloud computing and service-based software delivery.

At the same time their SMB counterparts are increasingly attracted by the accessibility and variety of ERP packages emerging from a new generation of cloud-based vendors who don't have the individual clout to challenge players at the top of the league, but who collectively threaten the long-term dominance of household names in this traditionally big-ticket market.

According to Gartner, the global ERP sector picked up in 2013 after a sluggish period, growing in value from $24.4bn the previous year to $25.4bn a rate of 3.8%. And the market is still led from the front by the big five: SAP, Oracle, Sage, Infor and Microsoft. But with ERP consolidation now a major driver in the face of newer, leaner business models, they are under constant pressure to adapt to a new set of market conditions and opportunities.

In the Middle East, this state of flux is much in evidence and poses some significant challenges for resellers and systems integrators as they extend their range into ERP consolidation and integration projects.

Jawad Squalli, regional vice president, Middle East, Africa and India at vendor Epicor, said there is still a long way to go.

"Every region and business is unique, and that is one of the major factors driving integration and consolidation," he said. "Concepts like the consumerisation of IT, BYOD and Web 2.0 are also working as catalysts and forcing ERP vendors and VARs to provide systems and applications that can be deployed on smartphones and tablets, and can integrate seamlessly with point solutions and third-party solutions."

Squalli said the ability to adapt to these new technologies and trends will be a key differentiator for ERP solution providers.

"Businesses today are looking for ERP solutions that are flexible, provide the agility to deliver immediate results and be more responsive to customer needs, are compatible with mobile devices and tablets, simple to use deliver real-time business intelligence regardless of location, and are quck to integrate with other software systems."

Naturally, the major vendors will all say they are meeting these requirements mainly by capitalising on cloud delivery model. And their focus is on helping customers achieve competitive edge a key marketing message for resellers and partners to take out into the field.

"In order to transform IT to being a core enabler of the business and driver of competitive differentiation, a higher effectiveness of the ERP solutions and the business processes enabled by them is a prerequisite," said Frank Forndron, director head of quality management for SAP MENA & EMEA emerging markets.

"By changing the way companies consume and use technology, cloud computing is playing a crucial role in this context as a foundation for driving consolidation and innovation."

Forndron said the ongoing need for organisations to be able to do more with less makes a strong business case for ERP consolidation, leading to reduced TCO, and the establishment of a "single source of truth" which speeds up decision-making and enables consistent business processes.

"In a nutshell, achieving higher integration and consolidating the ERP landscape is a very obvious approach for a CIO to drive down cost while at the same time enabling them to enhance business value and competitive edge."

The shift from on-premises to cloud solutions means that channel partners will have to work differently, suggested Forndron.

"Cloud applications are designed to be simpler, hence require less professional services and eliminate to a large extent the lower value services. At the same time, however, this trend enables opportunities for higher-value services and becoming the trusted resource to bring new cloud capabilities in a continuous way while helping to transform customers to use these solutions most effectively," he said.

This also means that channel partners must feel confident when it comes to core integration issues, as the focus continues to move away from single-vendor, best-of-breed platforms to a pick-and-mix service that helps customers particularly SMBs to navigate this complex and heavily-populated market.

"Channel partners play a prominent role in ERP consolidation and integration projects," said Jawad Squalli. "Regional requirements mean there may be niche solutions that are needed to address fiscal or legal regulations, and these may be obtained externally."

He said Epicor works with many partners to make this functionality available and integrated into the core system or as an additional module.

"Some partners have built value-added functionality based on vertical requirements and integrated with the core ERP," he said. "An example of this is the fast-growing retail industry in the Middle East, wherein channel partners have created a point of sale (POS) system integrated with the ERP system."

The biggest challenge for ERP resellers and it is constant throughout the regional IT industry remains the shortage of technical talent.

"One of the biggest hurdles in the implementation of an integrated ERP, both with the channel and the end-user, is the lack of skills," said Ali Hyder, group CEO at Focus Softnet. "We have seen many customers holding back their ERP implementation as they don't have the resources to carry on internally. It's the same for the channel. Most resellers face a lack of functional expertise and that is the most critical skill set when it comes to successful ERP implementation."

SAP's Forndron said the channel will also have to build its knowledge of change management, user adoption ad value realisation methodologies if it is to capitalise on the opportunities created by ERP consolidation.

"We see that for many customers, hybrid delivery models combining cloud solutions with on-premise solutions from a single vendor with high levels of integration will turn out to be the most appropriate option," he said. "It will be essential for the relevant players in the channel to ramp up specific competencies and offerings in this area to allow them to be at the forefront, differentiate themselves and capture market share.

"As this trend to the cloud continues, services such as installations and upgrades are moving out. Higher-value roles such as business transformation enablement and integrating many leading-edge components are going to be a focus,

"These differences change the role of the channel in sales and services. It will allow prepared channel partners to move from a project-based engagement to a continuous stream of process improvements based on the frequent delivery of new capabilities. This means more sustainable, higher-value relationships for those partners making the transition."

And it is the combination of technical expertise and business transformation consultancy skills that epitomises the risks and opportunities that the channel faces on the ERP front. Vendors can help them address the skills shortage through education and training but channel partners need to be more proactive in their supplier choices.

"Other than the lack of skilled resources, sourcing the best-fit ERP for specific industries makes the channel push for applications that partially meet customer requirements," said Focus Softnet's Ali Hyder.

"Vendors trying to push their applications irrespective of industry requirements are actually worsening this situation. What is required is or channels to categorise vendors based on their strength in different verticals to ensure they provide just the right product to the end-user."

The risks of ERP consolidation projects data duplication, broken connectivity between modules, system downtime, data loss and son on are all bound up in the channel's ability to select the right platforms and pin down the business benefits for the customer.

"Regularly in this context, the biggest challenge turns out to be the human factor in the process," said SAP's Forndron. "This means that achieving ERP consolidation requires overcoming resistance to change as people are set in their ways and used to doing things in a certain manner.

"All of these are management problems rather than software problems, so they can be overcome by effective organisational change management driving user adoption, a strong ERP project team consisting of representatives from business and IT coupled with solid management backing for the transformation journey."

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Source: (United Arab Emirates)

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