As the differences between the core “financials” modules of most enterprise resource planning solutions becomes less pronounced, it’s the functionality beyond the financials that buyers are focusing on as they seek out technology to help drive business benefit and differentiation.

Functionality ranging from customer relationship management, electronic data interchange, supply chain management, mobility, e-commerce, e-recruitment, business intelligence and even carbon footprint monitoring and management are all becoming part of ERP solutions as customers demand more and vendors work harder to meet their expectations.

What’s driving this broadening of the ERP offering? Peter Dickinson, chief executive of business software developer Greentree International, sees it as a reflection of three general trends being experience across business and society.

Firstly, standards are rising across the board – people no longer accept poor quality goods, poor service or poor delivery. As a result businesses have had to raise their performance, which has meant improving process management.

Secondly, says Dickinson, today everyone in business is time-poor. There aren’t the hours in the day there once were to devote to training staff, for example. But at the same time, the cost or making errors in business has become extremely high.

Thirdly, the internet has led to the rise of self-service, and put much more power in the hands of consumers. For Greentree, which specialises in solutions for midmarket organisations, the upshot of all this has been a shift in the type of development the company has focused on in past few years. The one time “accounting software” company has been focused on building functionality such as supply chain management, e-commerce, EDI and HR into its solutions. It will launch a new mobility platform later this year.

“This is so far away from back-end systems hiding away in the accountant’s office,” says Dickinson.

“It’s really about having fingers through the entire operation, whether it be the factory floor in terms of manufacturing, or the help desk in terms of service management.”

And this type of integration, to create more of a full business management system can have the flow-on benefit of making the technology suite easier to use.

“If you have a system where the user can quickly put together either complex, or quite simple, processes then you address a lot of training issues. You address a lot of the issues that arise when you bringing new people in [to an organisation].”

Knowledge is power
Mike Carroll of Strategis Solutions says another driver behind the broadening of ERP functionality is end-user demand for having all the information they work with easily accessible.

A worker sitting at a terminal who has an interest in product X wants his screen to tell him basic ERP-type facts like stock levels and price for that particular product. He also wants be instantly be able to pull up a picture of the product, its technical design notes, or a link to the vendor’s website.

This is not just about enhancing productivity, says Carroll, it’s also about empowering staff with instant knowledge.

“If you’ve got someone on telesales, they may not have all the technical knowledge but if it’s easy to get at then they can deliver a quality service to their end customers,” he says.

And while ERP buyers are demanding this type of integration and widened functionality, at the same time there is also a growing requirement for seamless integration and easy synchronisation of data between systems.

“We’re seeing that the ERP is expected to deliver more but is also needs to be able to collaborate with outside packages in a more standardised way – for example XML interfaces are becoming more common,” says Carroll.

Different drivers
SAP spokesman Peter Sertori says the ERP enhancement process is being driven by both large enterprise users and the small-to-medium sector of the business market, with the two groups having different motivations.

At the small-to-medium enterprise level, customers were often moving up to an ERP solution for the first time, so were looking to replace a collection of small systems – accounting, HR, etc – with a standardised solution which would show a return on investment in a short time frame.

At the large-enterprise end of the market, organisations which had run ERPs for several years were looking to extract more value from their information infrastructure, Sertori says.

“They are looking to us for solutions around business intelligence, business performance management, CRM and increasingly – with emissions management becoming a key issue – they’re looking at governance, risk and compliance solutions which will encompass their environmental compliance responsibilities.”

Sertori says another factor impacting enterprise technology investment was that a new generation of employees was entering the workforce with a different expectation of the software they interact with and an “information now” demand.

“It’s a function of the changing nature of the workforce. People have different expectations now of the applications they interface with at work and they don’t want hard-touse, inflexible applications anymore,” he says.

“Companies need to be aware of that when they’re upgrading their software, and that’s driving a lot of expectations of companies when they come to us – they need cleaner information in a faster timeframe”.

Vertical focus
Nicholas Johnson, ERP Dynamics Manager at Fujitsu New Zealand, says there is a trend in the market to “verticalise” solutions – making them specifically applicable to business verticals, either using functionality provided by the vendor or built by partners.

“When customers are out there looking for a solution they’re really focused on those products that have got that vertical solution, for example traceability if their business is pharmaceuticals or food,” Johnson says.

“Also, they’re looking at whether you [as the consultant or integrator] have people on your team who have capabilities and knowledge of their industry.”

Fujitsu, for example, has built up a specialty in the pharmaceutical or food industries, with staff who had good industry knowledge of those sectors.

“When we go to sell our team can talk to customers on a level where they feel we’re providing benefits to them from a consulting point of view, not just talking about features of the product,” he says.

“Particularly in the manufacturing and primary industries area, there is a real need to have people in your team who have a good deal of knowledge of those industries so they can offer benefits through the implementation and consulting process.”

Antony Zigliani, Fujitsu’s NAV development manager, adds that the company has received an increasing number of requests over the past year or two for systems with additional functionality, much of it relating to the supply chain area, including demand forecasting, EDI, and e-commerce.

“These days we get more and more demand for integrated systems rather than organisations wanting just financials by themselves,” he says.

“Customers want automated interfaces with their trading partners and their suppliers. They want a richer environment, not just ERP alone.”

Going mobile
Another trend is mobility functionality which is becoming increasingly popular with ERP buyers who want systems capable of getting closer to customers or the point of transaction.

This transaction proximity may involve “road warrior” staff issuing electronic orders at the time of purchase which are automatically beamed back to their company’s system from the mobile device.

Being able to operate in that way has numerous benefits such as avoiding the delays associated with paper processing and data re-entry, and allows sales to be made on the basis of real-time inventory reduces error rates.

Strategis Solutions’ Carroll says mobile methods of extracting information from ERPs is in growing demand with various “push” and “pull” methods being deployed depending on management requirements at specific organisations.

Some vendors have developed sophisticated mobile phone clients capable of extracting and displaying key data. Oracle and SAP, for example, has both recently released CRM applications for the iPhone.

On the other hand, for some users a solution involving the sending of a simple text or email message, triggered by a specified event recorded by the system, is all that is required.

Making an ERP investment decision this year? 

Check out the 2008 iStart ERP Buyers Guide and the ERP Research Pavilion for exhibits, case studies, white papers and downloads from a range of New Zealand’s leading ERP vendors.

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By Simon Hendery