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ERP As A Living System

Thu, 10/28/2010 - 4:32am

Change-on-demand capabilities allow companies to quickly realign their ERP and business processes, and to continuously embrace change without consuming costly IT resources.

The Limits of a Legacy Approach

Manufacturers traditionally implement enterprise resource planning (ERP) software solutions through static versions. That is, the company implements a licensed solution and receives ERP version upgrades over a period of time— often annually.   

The manufacturer receives software disks and updated product documentation. Then, the manufacturer analyzes the new version to determine which fundamental processes have changed and how those changes will affect their current procedures. Teams must be formed in order to determine any necessary retraining, forcing the manufacturer into a time-consuming and costly project that becomes inflated beyond original expectation.

Research Findings

This legacy approach negatively impacts overall performance.

Industry experts find that an ERP implementation that is several versions behind the latest release severely limits a company’s ability to operate efficiently.* 

Researchers also conclude that over a third of small- to mid-sized manufacturers operate two or three releases behind the currently available version of their implemented ERP software system. 

A New Approach

Today’s winning manufacturers implement IT systems from developers who do not guess what a user needs related to enterprise software features and functions.

In this new approach, the developer seeks out and puts emphasis on partnering with users who want to move the product and the services forward.

Rapid Application Development

Plex Online ERP, delivered as a Software as a Service (SaaS) solution is one system that incorporates this “community driven” product enhancement model, and signals the end to the static version upgrade process.

When a user requests a new feature that cannot be met with existing settings configuration, the manufacturer receives the enhancements in a fraction of the time due to Rapid Application Development capability. The manufacturer does not have to wait months to receive requested product enhancements or performance improvements in a service pack, a feature pack, a small release, or a major release. Features are developed using an iterative process and deployed when they are ready.

The Power of Community

Due to the Database-driven Application Architecture, even though all users run off a single centrally-managed system, they all operate within their own configuration.  Each user runs their own custom system and can “opt in” to system features as appropriate to their needs. 

Each user can take advantage of the accumulating strength and capabilities of the system, and at the same time, enjoy the advantages of community-driven enhancements.

Best Practice: Cross-Enterprise Financial Reporting

A powerful example of a customer-driven enhancement that benefits the entire user community is cross-enterprise financial reporting.

A large Tier 1 automotive supplier sought to streamline the process of managing financials across their domestic and international locations. To this end, the supplier used Plex Online to build accounts payable, accounts receivable, and general ledger reports that return data from multiple locations. This allows a centralized accounting/finance department to analyze data across locations or plants faster and easier without having to log in to each individual system, extract data, and paste together in an Excel spreadsheet. Examples of reports that have been developed are Cash Requirements and Account Activity.

Larger companies using Plex Online have benefited from these reports. A centralized corporate location can now manage and report on financials across the global enterprise. This further exemplifies the integrity and relevance of the information since data sources are real time as business transactions are simultaneously made throughout the system. 

Conclusion

The change-on-demand capabilities described here allow companies to quickly realign their ERP and business processes, and to continuously embrace change without consuming costly IT resources.

In each case, companies benefit from an ERP system that is a perfect fit for their business structure, without a dead-end customization effort.

With the Plex Online “Living System” approach, product enhancements are community-driven, giving every user a constant stream of opt-in feature improvements accumulated from the real-world knowledge of the Plex Online community.

*ERP in the Midmarket:  Managing the Complexities of a Distributed Environment  C. Jutras; Aberdeen Group 2009.

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For more information, visit www.plex.com.

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