What is an ERP system actually for? At first glance, the question seems nonsensical. Nevertheless, it's a question that is well worth addressing, says Martin Hill, vice president marketing for Epicor Software in EMEA. And that, he explains, is because it's clear that there are a growing number of aspects of a business where ERP systems contribute relatively little.
"Look around, and it's easy to see that the problems faced by people in business are becoming ever more acute," observes Hill. "Data volumes are climbing, and the velocity of information is accelerating. Yet by remaining true to its origins as a purely transaction-centric system, ERP is doing little to help people to become more responsive."And the key word there, he stresses, is 'responsive', a word that is central to much of Epicor's thinking at the moment.
"Right now, manufacturers are focused on responsiveness because they're very aware that in today's business environment, it is agile and responsive businesses that will be more successful," he asserts. "So manufacturers want their ERP systems to be more agile and responsive because without that, they know that their own businesses won't become more agile and responsive."
And responsiveness, in Epicor's book, is very much a multi-faceted concept, stretching right across the business and, hence, ERP's mission.
For instance, points out Hill, there's strategic responsiveness, which is about aligning and realigning the business based on the insights that the ERP system provides into trading conditions, sales trends, and customer and supplier activity.
"The ERP system is right on the front line in terms of how the business is performing, and where it's going," he observes. "Yet one of the challenges to be addressed is how the ERP system can become relevant to the business leaders who make strategic decisions. For these people, ERP needs to provide up to the minute information, in a useful context."
Next up: operational responsiveness, which Hill sees as ERP's original heartland. Here, he says, responsiveness is about building, executing, and refining effective and efficient business processes – both within the business itself, and along its upstream and downstream supply chains.
Then there's customer responsiveness to consider. Again, says Hill, it isn't difficult to see the requirement. Because almost without exception, he points out, customer expectations are becoming more demanding: customers want better service, faster service, lower prices, and better quality. All of which, he adds, clearly frame the role that ERP must play.
"For manufacturers, it's about how their ERP systems can help to build a better customer experience through the web, or via mobile technology, giving them more and better information and service," he sums up. "You hear a lot about the 'perfect order': acknowledged and processed efficiently, delivered on time and in full, and invoiced correctly without error. And it's the job of the ERP system to make that happen."
Finally, there's personal responsiveness to consider. And there are two aspects to this, notes Hill. First, people within businesses are these days expected to work with significantly more data, and are required to make decisions faster. Consequently, he points out, it's important that they are provided with tools that give them the flexibility to make these rapid, data-intensive decisions. And second, today's communications paradigm is very different from yesterday's: today, we think nothing of communicating in real time with suppliers and customers – often over substantial distances – with the result that significant amounts of data flow through our corporate and personal networks.
"So we need to think about our ERP solutions very differently, even going so far as to redefine what an ERP system is for," sums up Hill. "ERP has a role to play acting as a 'citizen' of these networks, and acting as a decision support system. More than that, ERP also has a role to play taking action on some of those decisions."
In short, he sums up, tomorrow's ERP will have to go far beyond simple transaction processing, and take a proactive intelligent role, participating in networks as a full peer, taking part in the 'conversations' taking place, and taking independent action as appropriate.
Put like that, concedes Hill, the idea of ERP as an intelligent participant sounds like something out of science fiction. But in reality, he stresses, it's just another step in the evolutionary process that ERP has already undergone. Consider, for instance, that today's ERP systems routinely accept orders from customers, acknowledge them, and trigger the dispatch and invoicing of the ordered items, all without human intervention. Consider too that ERP systems routinely place and update orders on suppliers as forecasts and actual demand change, yet again without human intervention.
But the real 'proof point', he stresses, is that the world of ERP as an intelligent participant has already started to arrive, delivering solid down-to-earth benefits that are anything but science fiction. Take Epicor Social Enterprise, a collaboration tool embedded within Epicor ERP, that already makes it possible for users to construct their own incoming streams of information.
"Users can 'follow' an order, a product, a customer, or even a work centre," says Hill. "As a result, they can be kept up to date with whatever is happening with that object, and make adjustments and transactions as appropriate. So it's a tool that is already helping users to focus better, and to manage those volumes of data are part of business today. They can change 'feeds' at will, and create 'groups' to collaborate on specific issues, such as quality problems or customer issues."
And this is just the start of the revolution, he stresses. "Integrated with e-mail and voice networks, ERP will one day be able to 'hear' instructions such as 'Let's put that customer on hold,' or 'Let's switch from work centre 1 to work centre 2,' and take appropriate action, checking your authority to take such decisions, and either actioning the instruction itself, or notifying the relevant people."
Far-fetched? No more than any number of other technology changes that we've seen in recent years, points out Hill. Moreover, he adds, as the world of business becomes more complex, and as data volumes continue to climb and accelerate, the need for enhanced responsiveness will drive such changes, with users only too keen to adopt them.
"Responsiveness isn't some vague abstract notion," he sums up. "It's very concrete, and competitive advantage is going to be gained by those businesses that are responsive, right across those four aspects, and so are able to take decisions that are better and faster than those of their competitors."
