ERP Takes Root in Wider Array of Businesses

ERP Takes Root in Wider Array of Businesses

As companies increasingly lean on ERP systems for infrastructure, visibility and control, manufacturers have learned to become more sophisticated users.

When sales for wines plummeted by 30% worldwide in 2009, wineries in Napa Valley responded by pinning their business hopes on direct-to-consumer sales. That's meant focusing heavily on marketing and distribution and utilizing tools not normally associated with pinots and malbecs.

Many have turned to Enterprise Resource Planning (ERP), integrated technology systems that let all the various pieces of a business operation communicate with each other.

ERP historically has been synonymous with manufacturing. But as the systems have grown more cohesive, flexible and standardized, they have crossed over into industries such as pharmaceuticals, insurance, utilities, banking and, yes, wine.

The reason for this is simple: ERP, regardless of industry, provides a company with the infrastructure, visibility and control needed to manage intricate day-to-day operations.

"From distribution to warehouse management, to outbound traffic, to all the financials, ERP has come to mean the entire enterprise," says Rod Winger, senior director for product marketing at Epicor.

"Why can't someone purchase management like an iPhone application?"
-- Rod Winger, senior director for product marketing, Epicor

For manufacturers, the needs for ERP are somewhat unique. For instance, today, ERP is used for automating manual processes, improving inventory control and scheduling. According to a recent study by IT research firm Aberdeen Group, manufacturers are also using ERP for industry quality standards, compliance requirements and strict traceability.

This hasn't happened quickly -- or easily. By the estimate of George DiGrandi, president of JGI Consulting, companies are now implementing their third or fourth generation of enterprise systems. And, more importantly, they are becoming more sophisticated users.

"We've lived through a lot of horror stories," says DiGrandi. "Manufacturers that are implementing new systems are doing a much better job of differentiating what they want in an ERP system versus some of the things that are nice to have."

According to Dinesh Mohan, industry principal of enterprise solutions at Infosys, over the last decade enterprise systems have consolidated and standardized, allowing for global corporations to keep all their operations running on one platform.

In previous years, for instance, customers had to purchase separate software for product lifecycle management, advanced quality management and preventive maintenance. Today, customers have come to expect that those functions will be included in the package.

At the same time, however, Mohan sees a trend toward customization.

"You're seeing us provide a system that has a basic framework, but we'll mold the ERP to fit specific needs," says Mohan. "If a business is run a specific way, you can build on top of that framework so that the reporting, workflows, forms and data capture are done the way you want it."

There are also generational changes taking place as well. Call it "The Apple Effect." As younger workers in their late 20s and early 30s emerge into leadership positions in many companies, they are weighing in on decisions for enterprise platforms, wanting systems geared toward connectivity.

"Within a day of having an iPhone, I said I'd never go back to a Blackberry," says Rod Winger, senior director for product marketing at Epicor. "It's just that intuitive. Well, I think that's where applications need to get to from an enterprise perspective. You're used to interacting intuitively and most enterprise applications aren't very intuitive."

ERP systems have already begun the evolution. A mobile framework has been in place for years, with support on smart phones. But Winger believes the next step is a smaller footprint.

"Why can't someone purchase management like an iPhone application?" says Winger. "Technically, there's no reason why not."

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