Home' MHD Supply Chain Solutions : MHD Spt-Oct 2015 Contents Cloud-based enterprise resource planning
(ERP) has been around for more than a
decade and has changed the equation for
a growing number of enterprising organisations
throughout Australia. Yet many distributors are
still relying on aging, on-premise systems to
operate their businesses and supply chains.
That's completely understandable, as it
can be expensive and disruptive for many
businesses to remove an existing system and
install new ERP. But there's a catch: the cost
of not doing anything can be far more costly.
In addition, the internal disruption caused
by launching a new ERP project pales in
comparison to the industry disruption to which
companies running on-premise systems are
having to adjust.
Take, for example, some of the risks of sticking
with existing systems. For many wholesale
distributors, upgrades are just not possible.
Not only is it costly, businesses would need to
customise, rebuild, and test, for their unique
requirements, with the upheaval of an upgrade
just as bad as completely replacing it -- in some
cases, worse. That means the business is not
receiving the latest functionality available and is
stuck in what is often referred to as 'version lock'.
Alternatively, if they were to switch to the
cloud, the company would automatically receive
upgrades several times per year at no extra cost,
with customisations automatically carried forward.
It is also important to note that the limitations
of customising on-premise ERP is a key culprit
behind supply chain inflexibility. Organisations
are forced to adapt their business processes
to the constraints of their software, rather
than adapting the software to their business
processes. This makes it hard to keep up as
supply chains continue to mature, become
faster and more interconnected, not to mention
far more complex.
In addition, many of those older on-premise
systems have been around so long, the
customisations were built by IT staff who are no
longer with the company, or will soon be moving
on. That leaves their successors combing
through old custom code, or the business
becoming dependent on third party support.
The changing landscape is
creating a greater risk
Putting the technology aspects aside, the missed
opportunity costs may be an even greater risk.
Think about all the changes sweeping through
the manufacturing and wholesale distribution
industries in Australia, as traditional models are
rapidly changing and forcing organisations to
find new ways to cost-effectively increase market
share and reach new customers.
Businesses are becoming increasingly
connected by integrating with suppliers,
tying into online channels like Amazon,
or providing real-time status updates to
downstream customers. They also face a rise in
telecommuting and off-shoring, making it key
to ensure workers can access their applications
Increasingly, manufacturers are realising
that they can make better margins using the
internet to go directly to consumers to sell
their products, whether through their own
e-commerce sites or using the likes of eBay or
Amazon. Meanwhile, wholesale distributors face
huge competitive threats from Amazon, Google
and other big players that continue to move into
B2B markets, forcing them to adapt quickly.
The internet is also opening up global
opportunities for Australian wholesale
distributors with new customers, distribution
partners and manufacturers. That demands
multiple language and currency support built-in,
and sophisticated ecommerce capabilities. It
also introduces new complexities with logistics,
supply chain and inventory.
Flexibility and agility
needed to succeed
It is becoming increasingly clear that the flex-
ibility, agility and ease of use of a software
solution are what organisations need to succeed
and grow their business. Companies with
systems that can't quickly scale and adapt to
the modern pace of business, new business
models and ever changing business needs will
quickly fall behind.
To help organisations survive, the ERP
application needs to be highly customisable and
highly configurable, without fear of breaking it.
It must be web-based so that businesses offer
global access and connectivity for employees,
suppliers, partners, customers and channels.
This allows people to work in real time,
make decisions in real time and is based on
information that comes from a single source
and, of course, is in real time.
That's how true cloud ERP works -- a
multi-tenant application that offers a single
360 degree view for financials, e-commerce,
CRM, sales force automation, manufacturing,
distribution, and more. Multiple currencies and
multiple languages are built in. Employees,
new offices and even countries can be added
without additional IT resources, and can be
done in a matter of days.
Cloud ERP isn't just about addressing a
company's existing challenges and needs, but
those they'll face five to ten years in the future.
Now is the right time for distributors to move to
the cloud, or risk being left behind.
From small regional or niche wholesale
distributors to multi-million dollar global giants,
cloud technology is revolutionising how the
industry engages with trading partners, monitors
performance and identifies opportunities for
improvement. It plays a crucial role in helping
Australian manufacturers, wholesalers and
distributors achieve supply chain success.
Mark Troselj is the vice president and general
manager for NetSuite in Australia and New
Zealand. For more information call +61 2 9464
6100 or visit www.netsuite.com.au.
TIME IS RIGHT TO
SWITCH TO CLOUD ERP
"The internet is also opening up global opportunities
for Australian wholesale distributors with new
customers, distribution partners, and manufacturers."
MHD SUPPLY CHAIN SOLUTIONS --- SEPTEMBER / OCTOBER 2015
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