I recently attended QAD’s Explore 2017 customer event in Detroit. QAD is an ERP company that I’m very familiar with, having attended their last 5 or 6 user conferences.
Typically, what most resonates with me at these events is the theme of “Effective Enterprise,” a QAD initiative that emphasizes continuous improvement in the processes and technologies that their users implement. On a regular basis, QAD conducts discovery meetings with their customers, leads vision workshops to understand the goals of their organizations, delivers “Q-Scan” assessments (providing recommendations on how to better shape business processes and technology solutions), and then delivers implementations featuring new processes or functionality.
This theme of continuous improvement for the effective enterprise aligns very nicely with my main takeaway from this year’s event.
Support for Tailoring and Platform Extension
From my perspective, the major announcement at QAD Explore 2017 was the introduction of the QAD Enterprise Platform. The QAD Enterprise Platform is designed to eliminate customizations by providing a platform, rather than just an ERP product, that supports tailoring and extensions.
Traditionally, customizations and bolt-ons were often barriers standing in the way of ERP evolution. The QAD Enterprise Platform will enable easier upgrades without halting the pace of change. In this way, extending apps won’t break, and the organization can continue to innovate. As a result of this approach, QAD customers will be able to take full advantage of flexibility in their solutions, a flexibility that is crucial in the modern manufacturing environment.
In my report, Roll with the Punches: Select Flexible ERP and be Prepared for Business Challenges, you will see that Best-in-Class organizations are 83% more likely to have a solution that can be quickly tailored to reflect business change (Figure 1, below). This calls for templates and self-service solutions to ensure that new workflows, rules, and regulations can be supported. While top performers have teams dedicated to ERP modification, having change easily supported within the solution is a big benefit.
Figure 1: Be Flexible to Change
When an organization has an ERP solution that can be easily tailored as required by the business, it creates a technology environment that is a perfect fit. For example, when new best practices emerge, the organization can customize their solution to reflect the new process standards. Indeed, organizations with ERP solutions that can be tailored to reflect change are more likely to have updated, standardized processes for things such as order management, delivery, and production planning (Figure 2, below).
At the same time, when business requirements change due to new regulatory mandates, an easily changed ERP solution is essential. The inability to comply with mandatary regulations can bring with it fines, or worse. The last thing an organization needs is to have to fight their ERP solution when trying to avoid penalties for non-compliance.
Figure 2: Capabilities to Address Change
There are, of course, times when organizations seek to customize their ERP solution in ways that have little to do with the solution itself. For example, consider situations where individual employees have certain preferences for how they interact with the system. These preferences could include anything from role-specific dashboards and charts, to language or currency preferences for employees located in other countries. Core functionality aside, ERP system flexibility should maintain ease of use. This can impact ROI significantly.
Lastly, ERP platforms need to be flexible so as to support any additional solutions that the organization decides to introduce into its technology environment. These could include logistics solutions, business analytics, or any solution intended to beef up specific functionality in the enterprise. Our research has found that organizations with a flexible ERP solution are more than twice as likely to be able to prioritize the ERP capabilities they hope to leverage.
The ROI of Flexibility
Whether implementing new processes, changing preferences, or enabling integration, an easily changed ERP solution is key to achieving ROI. This becomes evident when we compare the performance of organizations with easily tailored ERP solutions to organizations that do without.
In most cases, any organization will benefit from implementing an ERP solution. Organizations with flexible solutions, however, happen to see even greater benefits (Table 1).
For example, organizations with flexible ERP solutions saw a 15% improvement in operational costs as a result of implementing them. Organizations with ERP solutions that are inflexible only saw a 7% increase in this area. We see similarly different results in areas such as inventory turns, schedule compliance, and the cycle time of key business processes. This is evidence that a flexible ERP can lead to improved ROI.
Table 1: The Benefits
Source: Aberdeen Group, August 2014
Building an effective organization is a job that’s never complete. The manufacturing environment is currently in a state of immense change. Inflexible ERP platforms only hold users back.
QAD’s Enterprise Platform, on the other hand, can provide users with a tool that supports future innovation.