Studying Time: 4 minutes

Enterprise Useful resource Planning (ERP) consolidation, akin to SAP consolidation, is a recurring scorching subject that’s in focus once more as a result of ongoing volatility in provide chains, as not too long ago reported by GEP. In our new regular, anticipating useful resource wants by way of ERPs and provide chain administration techniques (SCMs) has grow to be ever more difficult, and aligning SCM with ERP is much more tough. These enterprises with a number of, poorly built-in SCMs and ERPs are unable to optimize their enterprise. There are dangers related to ERP consolidation, nevertheless, that trigger IT and enterprise management to refocus. As a substitute of consolidation, main enterprises are emphasizing ERP transformation.

ERP Transformation Versus ERP Consolidation

Curiosity in ERP consolidation perennially arises as a result of it appears smart to scale back the variety of SAP, Oracle, or different ERP working situations throughout an enterprise. Government management desires to speed up their means to handle assets throughout the enterprise whereas simplifying their IT portfolio, however “large bang” ERP consolidation could cause delays in bettering outcomes when enhancements are wanted most. Whereas the promise of simplicity and financial savings by way of consolidation is tempting, there are three issues each enterprise chief ought to know and talk about with IT management earlier than embarking on that journey.

1. Consolidation can put your time-to-market in danger. Except your group has no business-critical, long-lived back-office techniques—presumably true for brand new start-ups, extremely unlikely for enterprises and people who have grown by way of mergers and acquisitions—consolidation would require the deep discovery of legacy processes and software program. In the meantime, different enterprise modernization efforts to scale back time-to-market will probably be deprioritized and even paused.
2. There’s a scalability Achilles heel ready with open-source options. Open supply is usually a highly effective ingredient in enterprise modernization, however ERP techniques require connectivity and integration with a number of SCMs, CRMs, and comparable business-critical techniques of document at an enormous scale. The necessity for integration—usually by way of lots of, if not 1000’s, of interfaces—will imply customized connectors must be developed, and people would require upkeep with each software program replace. Many enterprises have tried open supply for ERP consolidation and have discovered the prices and time wanted to construct and preserve connectivity to be a deal-breaker.
3. Cloud is barely a part of the reply. Enterprise management has grow to be rather more conscious of the benefits cloud computing can present, akin to larger enterprise agility, scalability, and accelerated enterprise transformation. Nevertheless, a hybrid strategy could also be finest for ERP techniques. The info that flows by way of ERP techniques could also be topic to regional or native sovereignty regulatory compliance. As well as, the “additional hop” from one area to a different by way of a cloud might add latency—the time it takes information to journey by way of techniques. Your IT management will perceive when information sovereignty is an element and when added latency will affect enterprise agility and buyer expertise. 

In distinction to ERP consolidation, ERP transformation is centered on optimizing enterprise outcomes greater than merely optimizing IT spending. By reframing the problem of ERP sprawl from an IT techniques challenge to a enterprise actuality—provided that a lot sprawl will proceed by way of mergers and acquisitions—IT management can deal with iterative, adaptive approaches that assist broader enterprise objectives. These adaptive approaches are primarily based on strong and scalable messaging, integration, and information administration—and have been confirmed over time. 

Actual-world Success By means of ERP Transformation, Not Consolidation

One instance is that of a world athleticwear producer primarily based in Europe, which has chosen the agility and adaptableness of ERP transformation. This enterprise wanted to optimize a seamless order-to-fulfillment expertise for its clients and buying and selling companions and decided {that a} “large bang” consolidation wouldn’t assist its enterprise objectives. By means of TIBCO’s platform strategy to connectivity, messaging, and integration, the corporate can handle 1000’s of software interfaces, passing practically 100 million messages per day to and from regionally distributed on-premises and cloud information warehouses. 

“We’ve been working with this buyer for the reason that early days of their imaginative and prescient for enterprise optimization by way of ERP transformation,” stated Ulrich Hatzinger, Director of Technical Presales, TIBCO, “and the pace with which they’ve been in a position to impact a metamorphosis of this measurement is a testomony to their considerate strategy all through our partnership.”

One other instance is that of Edwards Lifesciences. Edwards Lifesciences is utilizing TIBCO know-how to combine greater than 30 business-critical functions on Amazon Net Providers (AWS) for techniques that alternate greater than 300,000 messages a day. 

“The TIBCO platform covers just about each crucial enterprise software—a product lifecycle administration system, an ERP system, a producing execution system. Plenty of business-critical techniques are built-in by way of TIBCO,” says Rajeev Bhardwaj, senior director of enterprise know-how at Edwards Lifesciences.

Find out how to Enhance ERP and SCM Outcomes, With out the Dangers of ERP Consolidation 

To create a single supply of enterprise fact in your group, all enterprise techniques must be stored routinely in sync with ERPs. By means of adaptable, scalable integration, you may enormously scale back data silos to yield full, correct, and well timed ERP information all through your enterprise. With the TIBCO platform, you too can uncover superior buyer insights by integrating your CRM platforms, akin to Salesforce or Microsoft Dynamics CRM, along with your ERP techniques. By means of an built-in buyer system of document, your enterprise can optimize enterprise primarily based on these insights and additional automate customer-centric processes. This adaptive strategy additionally streamlines onboarding new ERPs from mergers and acquisitions, minimizing enterprise disruptions.

The most effective path ahead would require stakeholder enter on integration prioritization. In case your group doesn’t but have a Middle of Excellence for ERP transformation or SCM enchancment, a obligatory first step could be to pilot a working group or steering committee to make sure IT is aligned with the enterprise. 

Enterprise leaders should assist IT in altering the dialog from merely reducing prices to true enterprise optimization and might help IT keep away from the dangers of ERP consolidation whereas getting the enterprise advantages of ERP transformation. And even non-technical management ought to know there are prebuilt options obtainable particularly for accelerating SCM system insights that could be price dialogue as priorities align.

Learn extra about how Edwards Lifesciences moved to TIBCO on AWS to assist a seamless movement of information.