Taryn Cromie, HansaWorld South Africa

The SA market is behind on worldwide consolidation, but mobility shows promise.

The major consolidation among ERP vendors in SA happened approximately 10 years ago, according to Simon Griffiths, product and industry marketing consultant at SYSPRO. “For example,” he says, “with Microsoft’s acquisition of Great Plains and Navision, and Oracle’s acquisition of Peoplesoft and JD Edwards.” Since then, he says, there hasn’t been a large impact or much movement in the market, with the last few years proving significantly less tectonic.

Says Taryn Cromie, sales manager Africa for HansaWorld South Africa: “As a mature market, ERP has undergone various waves of consolidation.” However, she believes the resulting systems tend to be somewhat moribund: they have a limited future in terms of technical development, with the vendors showing a restricted ability to innovate and respond to new ways of doing things. “Specifically with the emergence of SaaS and cloud models, many of these vendors are way behind.”

What that means for the customers of these vendors, she continues, is that they are getting left behind. “As cloud models provide more efficient, lower costing and more fl exible systems, those stuck on old technology models are restricted in their ability to grow or innovate their business processes. In turn, that can affect competitiveness.”

She believes that globalisation means no matter where in the world your business may be, you need to be efficient and innovative. “If your technology systems cost too much and take too long to respond to market opportunity, being stuck with a legacy vendor will cost you,” she explains.

ADVANTAGES

According to Cromie, today’s business environment demands that companies be in control of their business processes to be competitive and efficient. “Beyond a certain scale, this just isn’t possible when using different applications patched together, and certainly not with just a simple bookkeeping package and spreadsheets.

Simon Griffiths, SYSPRO

“An ERP system is information-driven,” she says. “It provides visibility on processes, performance, customers, suppliers, stock, sales, the supply chain, financials, and more. It is a central tool to make sure all aspects of the business can be ‘known’, enabling managers to make informed decisions quickly. If the system reaches any device, so much the better.”

ERP offers enterprises many advantages, such as true visibility across all aspects of their business, says Johani Marais, channel manager for Africa at Epicor Software. “This, however, is only true if it has been implemented correctly,” she stresses.

“We have found that companies sometimes are not clear on their objectives, why they should implement an ERP system or even what they are looking to achieve. Companies need to understand the cost of doing business, where their bottlenecks are, why they are winning business and what it costs to make their products. Too often, businesses have relied on the input of a few key people; an ERP system offers longevity as there is continuity in every aspect of the operation,” Marais says.

“ERP has evolved from its transactional roots and it’s no longer just a must-have for its processing powers. Most companies now understand that ERP can be a vital front-office and operational resource that provides staff with timely business data to help the business become more agile and competitive within their market. With this view in mind, ERP can offer endless competitive advantages and we continue to see our customers becoming more responsive to their market conditions, more proactive and innovative in reaching their business goals. Truly flexible ERP solutions can inspire any business to greater achievements,” she explains.

SIZING UP

Despite its many advantages, however, many companies are still somewhat hesitant to employ ERP systems. “This is especially true when it comes to high-end, expensive, production-based solutions,” explains Daniel Hall, VP: sales and marketing at Magic Software SA. “The tremendous economic pressure is causing companies to relook at their decisions to invest large sums of money in large-scale ERP systems. Organisations are looking at selecting ERP solutions which may offer less functionality but are cheaper to deploy, and where business wins are quicker to achieve.” He says increased revenue from companies such as SYSPRO and Sage are evidence to this trend.

“Companies with existing ERP implementations are looking to extend their investment in these systems, rather than to replace or upgrade. Where ERP systems do not provide all the functionality organisations require, integration technologies are used to integrate the ERP with other key systems. This approach is proving to be more cost-effective than trying to customise the ERP application to meet every business requirement,” he explains.

According to Griffiths, large or mid-size organisations are definitely not saying no to ERP systems, however. “Larger organisations reach a point where managing Excel or a small accounting package is not feasible or sustainable, where a centralised ERP solution is a necessity to automate processes and reports efficiently. Companies that are only 10, 15 or 50 people in size will most likely say no to an ERP system, but there is definitely a tipping point – once the company grows – where an ERP system becomes a necessity to streamline processes.”

Cromie believes without ERP, it is prohibitively difficult to run a company which is even rudimentarily complex. “Whole complexity comes with ‘size’ – number of employees – this is not the sole determinant of whether or not ERP is necessary. There are many factors. Companies are therefore not saying no to ERP by any means.”

She says such systems provide and manage the information which is necessary to make decisions and monitor the many facets of the business. “In its absence, the use of unstructured systems that have to be monitored manually means a great deal of inefficiency; in a competitive environment, that inefficiency would put the company at a serious disadvantage.”

According to Marais, businesses seem to be placing major emphasis on improving their competitiveness in the marketplace. “In some instances, this may involve reducing or understanding their true costs of production or distribution, others need to improve service delivery. Companies are placing a bigger emphasis on controls and measures across their businesses, and these can only typically be achieved through the implementation of systems. This is typically on the top of the list when executives are asked to list their desired outcomes from an ERP project.”

MOBILE ERP

As the penetration of smart devices continues to deepen and broaden within the South African corporate market, employees of all levels will demand to be able to access and interact with corporate information from any device, and at any time, from any location, according to Hall.

He believes the strength of mobile ERP will be felt when organisations adopt mobility not just as a means to ‘mobilise’ ERP, but rather where they provide contextualised information to the mobile user in such a way that the user is empowered to make the right decision at the right time in the best interests of the business. “One such way to do this is to create a consolidated view of the enterprise. Such an approach provides the user with enterprise data that has originated from a host of disparate business applications, being transformed or mashed up to contextualise the data, and then is presented to the user through a single mobile interface,” he explains.

Cromie believes the future of mobile ERP is bright – very bright. “Bring your own device (BYOD) and the availability of internal and external information while onsite at a customer and suppliers is so easy today,” she says. “If this is presented as an obstacle to any initiative, ask why, because it shouldn’t be.”

Mobility is an important factor underpinning a globalised business world, Cromie continues. “With availability of ERP software on mobile devices, productivity increases. That won’t happen if your employees have to be in the office to get things done,” she says.

Marais sees mobile ERP as being critical. “Businesses must have up-to-date data and be able to transact using that data. Customers no longer accept the standard ‘I’ll get back to you’ reply; the quicker you can respond and give accurate ETAs or stock availability, the bigger the opportunity will be to close more business.”

She says nowadays companies need to do more with less, and older traditional methods of doing business (pen and paper) just won’t yield the results that are required in today’s competitive marketplace.

According to Griffiths, opportunities for mobile ERP in SA include: flexibility, information being available where and when needed, and the processes that smartphones and applications enable today that couldn’t be done before. “Enterprise mobile applications can now take advantage of sensors within mobile devices, such as GPS, cameras and microphones; in future this may also include temperature, air pressure and humidity sensors.” He says the use of this sensor information in existing applications could, for example, pick up temperature change, which could influence an automatic rule that makes the warehouse cooler (in real-time) if this were to happen.

”The opportunities are endless, and we can only guess what is going to be possible in the next five years in this space. Exciting times ahead!” Griffiths concludes.