The Eight Ways “Version-Locked” ERP Damages Your Business

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Today’s Outdated State Of ERP
When was the last time you upgraded your ERP system?

Not just patched, fixed or tinkered with it—but implemented a substantive upgrade that enabled real business innovation, generated excitement and unleashed a wave of ideas and productivity from your users? You know—the same kinds of enthusiasm that greets web or iPhone apps like Instagram, Spotify, Netflix, etc.?

FACT: BETWEEN 50 PERCENT AND 90 PERCENT OR MORE OF A TYPICAL IT BUDGET IS SPENT ON MAINTENANCE, NOT INNOVATION.

Owning an ERP system that can only be upgraded every four or five years (at best) is simply not enough to maintain competitiveness with your peers. Business and technology are now moving so quickly that even if you do invest six months and $1 million in an ERP upgrade, the end result will be out of date by the time it’s completed. Worse still, old ERP is fundamentally incompatible with the way companies need to be structured for success.

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It’s time to explore the eight ways that your aging ERP system is holding back your business.


1. Legacy ERP Drains the Innovation from Your IT Budget
The key to knowing how aligned your ERP systems are with your business imperatives is measuring how much of the IT budget is devoted to innovation rather than maintenance.

Analysts from Forrester to Gartner measure this allocation closely, and find that maintenance spend can range from 50 percent to more than 90 percent of a typical IT budget. Only a fraction is left over for meeting business needs.

Competitors are already changing their budget allocation—and cloud computing is the tool that enables them to do it, by cutting IT costs by 50 percent or more. They’re able to reduce spend on maintenance, and increase spend on such value-added activities as creating new cross-functional workflows and reporting processes, adding sales channels, entering new markets and improving connectedness between internal and external systems. That adds up to a decided competitive advantage, while the company gains enterprise security, redundancy and data recovery that would be cost-prohibitive as internal company initiatives.


2.Business Regulations Demand Fluidity; Brittle and Outdated ERP Fails to Keep Pace
The accounting and regulatory environment is in constant flux as governments tighten fiscal policy through sales and corporate tax changes, or accounting bodies implement more stringent requirements such as FASB’s ASC 605-25 rules governing revenue recognition for “multi-element” products and services. These kinds of changes place enormous pressure on finance organizations. An out-of-date ERP is simply not designed with change in mind.

The fact is that your on-premise ERP will never track with change—because on the rare occasion you upgrade it, the operating environment will already have changed, and spreadsheets and personnel once again rush to fill the gap.

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In contrast, Cloud-based ERP aligns continuously with your operating environment. It applies the same philosophy to corporate ERP that’s behind web-based applications like TurboTax Online—you’re always up to date to adhere to the latest accounting rules, tax regulations and compliance standards. These upgrades are rolled out regularly by the cloud ERP vendor as necessary and while you sleep, your ERP is updated with the latest regulations and requirements. The result is less risk, less headcount and more time spent on strategic rather than operational tasks.


3. Aging ERP Is a Drag on Business Velocity
The web enables business to go global instantly—reaching many millions of customers in a year or two, whereas it used to take a decade or more to make that type of progress.

Some of today’s fast growing publicly traded companies are growing because they are not shackled to their on-premise ERP systems.

Cloud applications like Oracle Fusion Applications provide the engine to drive growth, enabling businesses to lay down an applications footprint for each country and subsidiary in weeks—not months or years. Cloud ERP spares businesses from having to worry about scaling up expensive IT resources and large capital expenditures on IT infrastructure. The result is velocity
that creates true competitive advantage


4. Mobile Workforce Battles Immobile and Outdated ERP
The millennial generation entering the workforce demand easy-to-use systems that mirror social tools or online shopping and increasingly blur the lines between work and home life. According to Gartner, worldwide devices (the combined shipments of PCs, tablets and mobile phones) are on pace to reaching more than 2.9 billion units in 2017.

Old ERP was never designed for the post-PC era of the anytime, anywhere workforce, but cloud applications are. Cloud ERP applications are optimized for bringing the world of mobile computing together with ERP, enabling your employees to monitor and manage the business from anywhere on any device.


5. Centralized Old ERP Hampers the Increasingly Decentralized Business
It’s not just workers that are becoming mobile. Businesses as a whole are becoming more distributed.To compete, businesses are looking to achieve agility and fluidity in their business structure. In a globalized world, businesses need to be able to choose where work takes place based on cost, timeliness and the ability to maintain and adapt an elastic workforce. Today’s businesses are running operations in multiple locations and maximizing efficiency with off-shoring and remote workers.

Cloud computing enables the distributed “elastic” business—enabling the extended workforce to access applications from anywhere across the globe, offshore as it makes sense, and scale up and down easily whenever needed. They can easily operate on a true “follow-the-sun” model and not be limited by the constraints of centralized ERP or be dependent on local IT resources.


6. Legacy ERP Fails to Satisfy the Appetite for Real-Time Information
If you’re running legacy ERP’s, you know the drill. Your business is running on spreadsheets, and management reporting is an onerous and error-prone exercise. You’ve got employees dedicated to the job of simply reporting, or reporting consumes the lion’s share of their day.

More often than not, it takes days to assemble bookings, billings and backlogs reports, or complete the periodic budgeting and forecasting process.  You’re constantly struggling to unlock data that’s buried in the ERP (or other disconnected systems and spreadsheets).

A survey by Forrester research titled Key Prevailing Trends in ERP, more companies are interested in adopting the following trends and Analytics is one of the top three priorities.

SaaS: Deployments are complementary to on-premises apps.
Mobile: Running ERP apps on a variety of smart devices.
Analytics: Broadening their organization’s use of BI and reporting.
Collaboration: Taking on technologies as part of a push for app usability.
Business processes: Embedding processes within ERP apps.

For good reason – there is a gap between what financial mangers need and what their ERP delivers. Static reports or out-of-date spreadsheets are not enough. The legacy system starves your business of information, forcing you to make decisions based on out-of-date, incomplete or erroneous data.

To compete, businesses need modern Cloud ERP designed to meet the challenges of today’s business needs. Here the combination of mobility and distributed access enabled by the cloud with real time analytics puts your company firmly on the path of true competitive advantage by eliminates the gap between the demand for analytics, your business processes and the decisions you need to make based on both of those items.


7. Stone Age ERP Walls Your Business Off from Suppliers, Channels and Customers
Everything has become connected through the cloud. Your customers are no longer content to wait on the phone to check an order; they want to browse your website to get their order status right now. Your suppliers stand ready to drop-ship your orders in real time rather than forcing you to tie up capital in inventory. Your operations have to be interconnected with customers, suppliers and partners, enabling real-time information exchange on demand.

Unfortunately, your legacy out-of-date deployment was never designed for such an interconnected world.

In contrast, cloud ERP applications were designed to connect with other platforms and web applications within your enterprise and beyond. cloud ERP makes it easy to synchronize your back- and front-office with your website in real time and connect to the extended enterprise.


8. Old ERP Is a Barrier between Your Employees and Self-Service

  • Are you part of a self-service business?
  • Can your employees enter time and expenses themselves into the ERP, or does someone need to rekey it for them?
  • Can an accounting manager quickly implement a new purchase order process, or do you need to wait weeks for IT to do it?
  • Can your finance team easily change the invoice template, or add another field to a customer record themselves?

If none of this rings true, don’t blame your co-workers—blame your ERP.

Stone Age ERP was designed when businesses were top-heavy in general administration. Cloud ERP is designed for lean businesses and uses the power of the web to drive employee self-service. ”


From “Version-Locked” Outdated ERP to “Version-Less” Cloud ERP
Cloud ERP frees businesses from the brittle, inflexible and change-resistant ERP of the past. With the cloud, businesses can run on ERP that is “version-less.” It means that businesses get the latest innovations automatically, from new features to support for the latest regulations. No more waiting, no more costly upgrades, no more upgrade risk. No more outdated ERP.

“Version-less” cloud ERP enables enterprises to experience ERP innovation as fast as consumers experience innovation in the enhanced web applications they use every day. It continuously aligns your ERP with your business operating environment.


The Competitive Advantage of Cloud ERP
A recent Forrester Research Forrsights survey found that the top four reasons that businesses move to the cloud are:

  1. improved business agility,
  2. speed of implementation and deployment,
  3. faster delivery of new features and functions and
  4. to support business innovation with new capabilities.

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About BrightStar Enterprise Application Consulting

BrightStar Consulting is the leading provider of Oracle Cloud-based Enterprise Resource Planning (ERP) software suites. In addition to ERP, BrightStar also offers a broad suite of applications, including Financial, Taxation, Localization Management (FTLM), Supply Chain Management (SCM), WareHouse Management (WHM), Enterprise Asset Management (EAM), Enterprise Performance Management (EPM/BI), eCommerce and Retail Management, and Human Capital Management (HCM) that enable companies to manage most of their core business operations in single integrated suite.

BrightStar’s Cloud solutions allows businesses to automate operations, streamline processes and access real-time business information anytime, anywhere. For more information about BrightStar Consulting, please visit http://www.bslion.in or contact Cloud Solutioning Team at info@bslion.in.

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