During a recent interview with Computerworld Malaysia, enterprise applications provider Oracle's Jasbir Singh, vice president for Cloud ERP/SCM Applications, said the cautious economic climate, especially in the manufacturing and logistics sectors, in the first few months of 2016 will improve. He also focused on how Enterprise Resource Planning (ERP) Cloud can help businesses keep up the pace to deliver more returns on their investments as digitisation is increasingly seen as an imperative.
Photo - Jasbir Singh, VP Cloud ERP/SCM Applications, Oracle APAC.
What indications do you have of an upturn in the coming months?
Let's first look at the current situation in the country and around the world. Undoubtedly, there is intense pressure on executives to innovate using technology, and there is also intense cost-cutting pressure due to economic conditions and the change in the overall consumer driven market. Many companies are wondering if now is the time for adopting new solutions or should they continue with maintaining their current setup and wait for better times ahead.
Although the question is when, it is inevitable that times will get better. As with any economic cycle, the upward trend will arrive and companies should be prepared. Globally, we see that average companies spend 82 percent of their IT budgets keeping their existing investments working, while only 18 percent of their budgets are dedicated to finding new ways of using technology to help them innovate and communicate with their existing and future customers. In the current economic situation, this will prevent companies from keeping up with the dynamism in the market, something that is crucial in order to weather through the current situation.
The other interesting component that many companies failed to realise is the arrival of the Millennials. These are workers born around 1990s (birth of the internet) to around 2000.
There is also now internal pressure on late baby boomers to give way to new ways of working. This generation demands built-in collaboration tools, analytics, insights, predictive capabilities and mobility as a way of doing work. The system should have all these modern capabilities, else they will shift to another place. Some adaptations have come about from employers accommodating Millennials. The bring-your-own device trend (BYOD), for example, is at least in part a reaction to the Millennials' near-addiction to mobile devices. Workplace satisfaction matters more to Millennials than monetary compensation and work-life balance is often considered essential.
This is where the flexibility of cloud and prudent measures in enterprise resource management come into play. Companies that have already been investing in such solutions would already be reaping the benefits as they would fare better in these situations. Two forces will drive a change in thinking in 2016. One is lower internal risk factors for taking on a major IT project. Cloud IT implementations aren't as slow and risky as the on-premises software projects of old, so even core IT projects can be done within months instead of years.
More importantly, companies now realize they must adapt to changing business models in the digital era. Their employees, processes, performance metrics, channels, and data needs are all evolving fast, and business leaders won't tolerate legacy systems that can't keep up with their customers', internal and market demands.
How are local conditions going to be changed sufficiently to guarantee such an upturn?
Changes are constantly happening and it keeps accelerating. Whether it's caused by the launch of disruptive products, customers' changing tastes, tougher economic conditions or rapidly evolving regulation. In such environments, reacting to change faster than your competitors would give you a significant advantage.
Such changes can often impact businesses if they are not prepared. In order to handle all these changes, companies must be nimble and have enough information at hand to make informed, accurate choices about their resources. Here, the question is how fast can the current business model respond to change?
This is why ERP in the cloud is the perfect way to be agile to address a constantly changing market, demands and economy. The cloud offers a way for organizations of all sizes to change the mix of IT spend so more resources are devoted to innovation and fewer on maintaining current systems.
What specific local examples do you have that show ERP is generating business benefits?
ERP apps, delivery ecosystems and knowledge resources have evolved radically over the last two decades. One industry where ERP has had a significant impact is in retail and ecommerce. Oracle recently surveyed 5000 shoppers from 10 different countries of different regions and found that 83% of retailers want to invest in new technology. This is potentially motivated by the fact that 67 percent of shoppers prefer their mobiles as a channel.
This is because retailers across here and across the globe in all segments and of all sizes suffer a common problem - antiquated or disconnected systems that don't facilitate visibility, improve efficiency, enable change, or promote growth across their business. Examples include inconsistent pricing between channels, a lack of company-wide inventory visibility, customer orders not meeting expectations, or simply the inability to open operations quickly in a new country.
Retailers need applications that provide an end-to-end process of supporting their transactions. From pricing to availability to returns, every element of the retail experience must be developed and delivered with convenience in mind. This is especially important with inventory management, where a complete overview of the inventory cycle can help businesses effectively manage the flow of goods.
What kind of cost savings have been achieved?
Cost-cutting is a key topic for any business and there are a few ways in which Oracle's ERP services can address costs. Firstly, overly complex business processes generate unnecessary costs. Consider the manual tasks involved in bridging the gaps between incompatible systems or searching for inventory. Automating these processes can generate savings as it helps to streamline business processes. As mentioned, freed up time can then be used to innovate and enhance customer satisfaction. When customers are more satisfied, retention levels increase and the cost of acquiring new customers can be minimized.
Another way ERP helps is in enabling greater adaptability. Reacting quickly to changes in customer needs, tastes, economic factors and the like can give businesses a key competitive advantage. Here, having ERP in the cloud can support this adaptability as businesses can adjust quickly without being concerned with infrastructure costs. This then lowers the overall cost base of businesses.
The main area is the flexibility to expand overtime. In the cloud, our customers can add on more functionality over time. Example is start with FINANCIALS (get your books in order), then add on Procure to Pay, and then start the Order to Cash. Take a break. When you are ready, add on another business function, like IDEA to COMMERCIALIZATION. The cloud allows our customers to buy "Business Processes" when they need it and when they are ready. Like they say, learn to walk first then start running. Here, cost is saved within a reasonable timeframe. In the traditional way, it would have been buying all these at once and then roll it all out at one go, which means taking money out of the bank and buying "shelfware".
How are you convincing local companies to adopt your services?
We have been putting effort into ensuring the local market is constantly updated on new developments.
Aside from providing updates, we also help educate businesses on how ERP can help address and alleviate some of the current issues they may be facing. We frequently have events that bring together industry opinion leaders, our clients and partners to share and discuss how to implement and successfully utilise ERP. An upcoming event would be Modern Customer Experience where we share ways on how businesses can accelerate their digital transformation by modernizing their business.
Many companies are restructuring locally. What advice are you giving to your clients to become more 'nimble'?
Streamlining and automating your business and IT processes reduce complexity and improve the productivity of all employees. Having ERP also makes business more efficient and can help improve customer satisfaction without additional direct customer service expenditure. In addition, integrating internal processes with those of suppliers to share information is another way that can create powerful incremental efficiencies.
Organisations facing economic pressures should consider moving to the cloud. Rather than focusing excessively on upfront costs and speed to activation, decision makers should focus on the long-term value that cloud ERP can create. Additionally, it is critical for organizations to develop a long-term roadmap and maintain a focus on the end goal, while following an iterative path to meet goals along the way. In this way, companies can change course as the business landscape evolves.
With cloud ERP, our customers and we get real-time innovation, agility and insight with analytics to make faster and better decisions to stay productive.
Overall, ERP services can help modernize businesses and decision makers should embrace this digital transformation in order to maintain stability in any economic situation.
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