An Enterprise Resource Planning (ERP) system is the central nervous system of any sophisticated organization. While ERP systems usually have extensive add-on modules enabling advanced functionality, they usually don’t offer a best-in-class experience or results when compared to standalone solutions in the competitive marketplace.
Fortunately, ERP systems are built to be extensible and configurable, due to their nature of unifying multiple business processes across the organization and connecting to other internal systems. This capability allows connections to third-party services that offer advanced functionality, cost-effectiveness, and improved user experience.
Utilizing an ERP in combination with an automated sourcing platform, such as Fairmarkit, enables a business to tap into innovation in data science and supply-chain ecosystems without being restricted by the capabilities of most ERPs.
Outlined below are 6 ways that connecting your ERP to an innovative procurement solution can accelerate your digital transformation.
Data is consuming the world and data-driven startups. Customers of these startups are the largest beneficiaries of an explosion of both datasets and emerging technologies, such as machine learning.
Organizations have an enormous amount of data but often lack the in-house expertise or systems to extract insights to influence positive business decisions. IDC has calculated that the amount of new data created globally per year has grown 44x over the last decade. Often this data is trapped in legacy systems, which prevents enterprises from reaping the benefits. Because of the unintuitive, restrictive nature of ERP features, this data is only accessible by data analysts with the ability to query internal data lakes.
The emergence of 5G connectivity, the dawn of the Internet of Things (IoT), and growing connected global citizens means that data volumes will continue to grow exponentially. Businesses must focus on their core value proposition and unique differentiators. That means leveraging data-focused solutions to accelerate their own digital transformations.
Unfortunately, large enterprise organizations are often at a disadvantage compared to startups when it comes to having data science as a center of excellence. This is exacerbated by a lack of focus on data science capabilities by ERP vendors and the struggle for larger companies to attract data science talent. One path to accelerating data-driven initiatives is to integrate data science technology, such as Fairmarkit's intelligent sourcing, with existing ERP systems without being beholden to limitations of existing systems or internal resources.
As previously mentioned, organizations are tasked with an ever-growing list of strategic initiatives, and applying their scarce resources in the most productive way is an ongoing struggle. Complex projects such as application and workflow customizations and sophisticated integrations can use precious internal technical resources that may best be repurposed on efforts more integral to the business.
By utilizing partners with out of the box technologies and a proven ability to deliver the desired functionality, a company can minimize both the technical and project management efforts to deliver value. Additionally, leveraging partners allows for rapid iteration over business goals without necessitating using internal resources to test the impact of unproven features.
Furthermore, businesses are constantly growing and expanding their global footprint. Leveraging an innovative SaaS platform can aide in international expansion. As new manufacturing plants are brought online or new affiliated companies are integrated with the system, it is possible to bring them into the fold of the organization without burdening internal teams with complex data migrations. Often SaaS vendors like Fairmarkit are accustomed to running multiple international workloads for an organization and constantly expanding the footprint.
Most importantly, by leveraging a trusted solution a company is able to focus on their particular business needs and their internal users which leads to improved focus. The more time spent on internal strategies and not on the nuts and bolts of how ERP integrations work or how data flows ensures optimal use of resources.
Organizations possessing the deepest pools of data and with robust data structures and clear interfaces will benefit most from the rise of data science and machine learning. The Fairmarkit intelligent sourcing platform, for instance, is able to programmatically improve vendor recommendations by combining historic procurement data with our proprietary databases of vendors, their goods and services, and unique attributes. That data is used as the basis for our Vendor Recommendation Engine. The model is continually refined with the experiences and activity occurring in our marketplace.
The mission of our data science team is to extract insight from customer data. However, we recognize that our customers' data is their own and that their own teams must have the ability to analyze combined data sets to answer new questions at their fingertips. It is crucial to offer both rich analytics capabilities within the platform and push data back into our customers’ ERP system or their data lakes. This flexibility and the predictable, automated bi-directional syncing of the data enables richer data models and, ultimately, more clarity on the procurement process.
One of the largest trends in IT spend over the last decade has been a shift from organizations running compute workloads on company-owned machines to leveraging cloud infrastructure to “pay as you go.” A major driver of this shift has been the preference to fund such initiatives via operational expenditure (OPEX) budgets instead of large capital expenditure (CAPEX) budgets.
When compared to procuring software capabilities, purchasing subscription-based software, over expensive ERP software licenses, or capitalizing internal software development, has many benefits. Many of our customers realize immediate ROI with Fairmarkit’s intelligent sourcing and grow the amount they source through the platform over time. This flexibility allows them to realize operational efficiencies and maximize their return on investment.
The true benefit of the cloud is not in financing structure but in the ability to reduce decision cycles and iterate quickly on solutions. As a cloud solution begins to demonstrate value, it can be scaled elastically by having more data flowing through the system without having to re-architect or wait for physical servers to be deployed.
SaaS systems leveraging the cloud provide additional time to market benefits for the maintainers and stakeholders of ERP systems. Organizations no longer have to line up internal development teams or external consultants to customize ERP modules. Instead, a robust integration can be enabled with limited IT resources and configured directly in the SaaS system in a matter of days or weeks instead of months and quarters.
Ultimately, traditional ERP systems consolidate data and business processes for a global organization in one system. This allows organizations to move as one concerted unit towards their goals. When combined with complementary best-in-breed partner technology with proven data flows, it enables procurement teams to take advantage of innovative technology without disrupting their processes or their other committed internal projects.
Connecting an ERP to an automated sourcing platform like Fairmarkit, allows procurement teams to leverage data and automation to drive high impact results. Moreover, they can tap into the ongoing innovation and machine learning happening in the competitive market.