Beyond ERP

ERP, a basic block of the enterprise system, may not be the
buzzword but continues to be the hot topic, nevertheless. In fact, there have
been three key factors driving the investment in ERP. First the firms revisiting
their ERP in order to move to a common architecture; and second, the emergence
of ERP from a workflow perspective in sectors such as education and government.
Last but not the least, there are also the first time ERP implementations in
some of the green verticals.

With the large enterprise market for ERP more or less
mature, the incremental growth is now expected to come from the SMBs and niche
verticals such as jewellery, logistics, shipping, and textile. However, the more
pertinent question now is: how to get more out of the ERP and what key insights
the applications can provide to meet the new age challenges of globalization?
And while this is driving the enterprises to open up to a plethora of
applications beyond the ERP (including the usual suspects like SCM, BI, ebiz
apps), integration happens to be the buzzword taking up the CIO's mindshare.

Next Level Applications

According to Rajesh Uppal, chief general manager at the Information
Technology division of Maruti Udyog, the next generation enterprise applications
will focus on collaborative decision-making, strong information analysis tools
and the ability to deliver information on varied devices while encompassing more
domains of business. As a result, enterprise security, decision-making and
strong analytics will be some of the drivers for the future.

Overall, there are few common trends, which are quite
visible in the domestic as well as international market. These include supply
chain planning (SCP), CRM, dealer relationship management (DRM), product
lifecycle management (PLM), enterprise assets management (EAM), sales force
automation (SFA), knowledge management, data warehousing, business intelligence,
and eProcurement among others. In India, with overall improvement of
infrastructure, enterprises are not far behind integrating with the outside
community including their business partners.

Among the enterprise applications, the emphasis this year
has been more on security, identity management system, primarily driven by
regulatory pressures and business practice certifications. The coming years
would see more spends/installations on SFA (including hosting solutions), and
HR. In India, the emphasis is also on BI applications as firms that have already
established ERP are looking to make sense of the data. While large enterprises
have started adopting BI and SCM, there is very low traction in the SMB sector,
which is either initiating or is mid-way through the ERP journey.

According to Dr TR Madan Mohan, director, ICT Practice,
Frost & Sullivan, the factors driving the next level of applications are
primarily emanating from business environments. Therefore, supply chain, BI and
corporate scorecard applications are the traditional next blocks that
enterprises pursue post-ERP, and one can see the same trend in most deployments.
Following this, the next level of application deployment would be based on
interoperability and platform independence. “Many of the previous
installations were based on the efficiency of point solutions without looking at
total cost of compatibility. Today that is becoming a requirement,” says
Mohan.

e-biz: New Horizons

The e-biz applications stand out among the next generation of enterprise
applications in terms of the excitement and anticipation factors. Though still
at a nascent stage, the e-biz status looks positive. “Firms are pushing
intra-industry and dealer network applications more vigorously. The e-biz
applications are being targeted in terms of integrating with tier 1 and tier 2
partners. In the case of suppliers, customers, third-party manufacturers,
authorized service providers, and freight forwarders, the enterprises are moving
information sharing to the online domain with the aim of enabling faster
decision-making.

However, the growth of e-biz application will depend on the
capability of integrating the e-biz applications with the traditional enterprise
applications and infrastructure like the ERP, SCM or the CRM applications.
According to Pillai, this is great challenge for the CIOs to handle and also the
success of this challenge will depend on the network bandwidth, computing power
and storage capacity. Interpretability of the e-biz application is the other
challenge, which is being addressed by the developers. This will determine the
pace of e-biz adoption in Indian enterprise.

Rajesh Uppal, CGM-IT, Maruti Udyog		Dr TR Madan Mohan, director-ICT Practice, Frost & Sullivan India

In terms of the key drivers for the adoption of e-biz
applications, Mohan points out that all e-biz applications that are going to
provide communication, brokerage and integration benefits will be pursued.
Communication amongst suppliers and dealers reduces the time-windows for
decision-making, and increases the speed. Brokerage is the cost of connecting
multiple players. Integration benefits come from seamless flow of material, and
financial information. Hence more emphasis is being laid on mobile-device
applications, portals, and dashboards.

ERP: Still Going Strong

Among the applications, ERP-including legacy MRP and rudimentary planning
systems-continue to be the mainstay. ERP is yet to fizzle out with three lines
of trends continuing to drive this market.

There is still a large potential yet to be tapped from the
ERP market perspective in the SMB segment. Overall, with growth becoming steady
in large enterprises for ERP rollouts in the next 1-2 years, the industry focus
is shifting towards the SMB, which will drive the incremental growth for the ERP
vendors in the coming years. However, large enterprises that are in the process
of stabilizing their ERP systems have shifted their focus beyond ERP. They are
concentrating on reaping the results of ERP implementation by focusing on
techniques like data warehousing and business intelligence. Apart from this,
they are extending ERP to reach tier 1 and tier 2 partners.

According to Daya Prakash, manager-IT Systems, LG India, in
the past, the focus was more on tight integration of organizational best
business practices to the tier 1 and tier 2 business partner integration,
whereas if one looks at the current trends, the clear focus of each organization
today is on “ERRC” which is eliminate (loss, overheads elimination), reduce
(losses), raise (sales, profitability) and create (value in terms of market or
customer). “By just implementing ERP and not concentrating on efforts on data
warehousing and business intelligence, the organizations will not be able to
reap this value,” he says. 

SOA: The Tech Mantra

One can expect more enterprises adopting packaged enterprise applications in
select areas. G Radhakrishna Pillai, head-IT at SRL Ranbaxy points out that in
some niche enterprises, customized solutions can fetch that extra mileage
compared to the standard packages. However, he adds that “this trend will be
overridden by market perception and a CIO will have the advantage of getting a
readymade packaged solution because of the features available and industry
specific standard practice tailored in the packaged solutions.” 

Daya Prakash, manager-IT Systems, LG India		G Radhakrishna Pillai, head-IT, SRL Ranbaxy

From the vendor perspective, enterprise applications have
also started specializing their expertise and focusing on the business
verticals. At present, almost 50% of market adoption is covered by BFSI, retail
and manufacturing. The major adoptors of enterprise applications in the current
phase are verticals such as logistics, healthcare, retail segments, and oil and
gas. In India, the current trend in malls and big retail outlets will boost the
retail segment IT spending not only in the traditional ERP systems but also the
CRM, and knowledge management applications.

From a horizontal perspective, Uppal points out that
finance, non-specialised purchases and a few other transactional areas have
matured in terms of adoption of enterprise applications, with areas like retail
sales and ordering related systems beginning to move in this direction.

Another trend is the growing emphasis on the integration
and standardization issues as the number of applications adopted within an
enterprise grows.  This is clearly
moving towards the service oriented architecture (SOA). According to Prakash, it
would add to the ease with which the integration would happen in the future. SOA,
wherein enterprises may pursue componentized architecture (some owned/managed
for business reasons and others in public space) for anytime use is the touted
route to go. Overall the drivers for future enterprises would be applications
with open and flexible architectures.

Shipra Arora

shipraa@cybermedia.co.in