Where Would You Improve your ERP?
What would you most like to change about your ERP system? Where does the cloud fit in your roadmap? And what's important to look for in a cloud ERP vendor? We put these questions to the Institute of Management Accountants (IMA) membership at a webinar last week, and more than 500 financial professionals responded.
No surprises from IMA members on where they’d most like to improve their current ERP deployments. Better business intelligence was the #1 reply with a resounding 32%, followed by improving ease of use (17%). Most on-premise ERP systems in place today were designed before BI was considered essential. Old ERP systems such as Great Plains, Sage and even SAP and Oracle almost invariably require some level of "bolt-on" BI—query, reporting and analysis tools purchased separately for use with the ERP.
That expensive add-on BI software means additional tools to maintain, and complex configuration and data management just to do some basic analysis. Another issue is that often the data is siloed, with financials in one database, sales in another—making Excel the application du jour for consolidated reporting.
As a result, reporting is often out of date and analytics is available only to a few specialized users. Many bolt-on BI tools sit on the shelf, because the pain of getting the data out of ERP is simply just too much to contend with. Bolt-on BI is often too hard to use and provides only a small window into the ERP data.
In contrast to older on-premise ERP, many modern cloud applications include analytics as standard. For example, at NetSuite, our analytics is completely woven into the ERP experience, and it's all available through just a web browser. Rather than just a few users having access to dashboards, KPIs, and self-service management reporting, everyone does—from the accounts clerk to the CEO, from account execs to the VP of Sales.
And because BI is completely integrated with cloud ERP, users can drill from dashboard to the actual transaction or the customer—making analytics truly operational and actionable, rather than based on partial, out-of-date information. In a nutshell, if you want better BI, you've got to take a long hard look at modern cloud ERP applications.
To Cloud or Not to Cloud?
While 37% of IMA respondents were neutral on where they were taking their ERP over the next 12 months, a substantial 34% rated cloud ERP as a moderate to strongly higher priority over the same timeframe. Sixteen percent of respondents ranked cloud ERP a moderate to strongly lower priority over the same period. When you consider that cloud computing was a new concept for many just a few years ago, the fact that more than a third of IMA respondents rank cloud ERP as a priority over the next 12 months signals an important and significant shift—one that we'll be keeping tabs on in the next survey.
What's the Keys to Evaluating a Cloud ERP Provider?
Finally, we asked the IMA membership what some of the most important evaluation criteria are for cloud ERP. Almost equally, the two key areas were vendor viability and ease of customization.
These are clearly areas that buyers should scrutinize closely. With the growth of the cloud, more vendors have appeared on the scene. Many of them will be here today, gone tomorrow, because they never achieve scale or run out of funding. So it's critically important to inspect a vendor’s track record, ensuring it has solid cash reserves, a sound recurring revenue stream, and that the company is generating cash. ERP is a mission-critical system, so long-term vendor viability is key.
Ease of customization is another important area—it ensures business and power users can create workflows and reports, and modify forms without having to engage outside consultants. A flexible customization layer also means there's less chance of outgrowing the ERP, and that it can be easily adapted to ad hoc business needs more easily. At NetSuite, the majority of our users use our SuiteCloud customization layer to make changes—and better yet, unlike many on-premise systems, the customizations migrate automatically with each upgrade.