A topic that excites Subu D. Subramanian , the Chief Executive Officer of Chennai-based Defiance Technologies ( >http://bit.ly/F4TSubuD ), is ERP (enterprise resource planning). ERP is undergoing a transformative reinvention, he avers, during a recent email interaction with Business Line. Read on…
Excerpts from the interview.
How do you see the evolution of ERP platforms in the next two to three years?
Globally, most of the economies are coming out of recession and the companies are catching up on the growth curve. This requires them to capture new and emerging markets, introduce newer products faster, and connect with their customers and suppliers seamlessly. There is continued need to enhance the efficiency of operations to be globally competitive, besides addressing the social and economical aspects of the business.
Besides the industry and business changes, there are also significant technology innovations and adoptions like mobile, cloud and social computing having impact on the enterprise applications. The ERP platforms are evolving to address these emerging needs of global enterprises. Beyond addressing the changing needs of the global enterprises, such platforms need to address the unique needs of small and medium enterprises (SMEs) that are looking to deploy the ERP platforms to automate their business processes.
Today’s enterprise applications straddle across new devices, cloud and social computing platforms. Imagine an engineer at a project site who finds a wrongly-delivered part. He immediately beams back the image to the corporate supply chain buyer (or vendor) and follows it up with a video-call the next minute without knowing each other’s location or contact details using the standard enterprise process. All this may be facilitated by the next-generation ERP platforms.
Cloud is considered a disruptive technological evolution. How is it impacting the enterprise backbone that runs on ERPs?
Over the years, we have witnessed the emergence of different computing models. First it was the mainframe. Then the client / server technologies came up. With the advent of the Internet, the web technologies emerged. Now we have cloud computing. In this sense, the cloud computing indeed represents the 4th generation computing model.
At this current stage of its evolution, there is still lot of “cloud around cloud.” While there are already some good enterprise-class solutions on cloud, the cloud computing model is still evolving and maturing. However, the cloud computing model is here to stay.
For large enterprises, cloud computing represents both an opportunity and challenge. While there is a clear opportunity to optimise computing infrastructure, enterprises are carefully evaluating the challenges/perceptions around the security of data on the cloud. There is significant debate around the deployment models of cloud, viz. public, private or hybrid. There are concerns around moving core enterprise applications to a public cloud environment. But there is significant interest around private cloud deployments.
Enterprises are likely to adopt a hybrid model involving private and public cloud deployments. The non-business-critical applications are likely to be immediate candidates to move into a cloud environment. While there would be pockets of cloud deployment, traditional ERPs would continue to be a significant part of the enterprise backbone during the next few years.
The cloud computing model is a big boon for the SMEs. The SMEs are likely to increasingly adopt “enterprise on cloud” solutions as these will involve less or zero capex for them while taking away the maintenance challenges and cost. This model will provide rich functionality that is flexible and scalable on a “pay as you use” variable cost model to them.
Today, proven on-premise software (such as SAP) faces competition from much smaller cloud-based solutions. How can a CIO choose between these two options?
It is not X vs Y, but the value that a solution provides for a company. That includes scalability, flexibility, process maturity, data security, total cost of ownership, and more so speed-to-value while considering users and external interface aspects. Cloud solutions may sometimes solve relatively smaller issues for larger enterprises.
The CIOs are, therefore, keeping the big picture in mind. It is about what is a better and a more appropriate solution for that organisation and business process to be automated. At the current stage of technological evolution, the answer could be different for two different organisations. It is not one-size-fits-all.
A plethora of devices and ‘apps’ has brought a new era in personal computing? How do you see it fitting in the enterprise landscape?
One must say that the evolution in devices has exceeded even the wildest of the expectations. Today, many such devices have a very high computing power and storage capacity matching even the power of mainframe computers of the past. The communication protocols such as 3G and 4G have complemented the apps-driven world of new devices.
Going forward, we would see a world of enterprise apps running on these devices that will complement the rest of the enterprise. Imagine a CEO checking the visually-represented worldwide sales data, picked up from the server on his iPhone or Android-powered device at an airport before boarding his flight to Frankfurt. Then, getting down at Frankfurt, he analyses to see if there are gaps in production and sales forecast etc. With ‘Internet in the sky’ offered by some airlines, the business decision-making will continue seamlessly, across locations, as you move.
Of course, such enterprise mobile applications are still evolving and most of them are today at pilot stage. Hence, the enterprises need to address the issues of security, maintenance and integration of such devices into their enterprise applications.
Are some ERPs more suited to specific verticals than others?
The choice of a specific ERP product will be driven by the specific business needs of the company considering an ERP deployment. Different ERP products offer different degrees of specialisation towards different verticals. The organisation considering the ERP deployment should undertake a detailed assessment of its business requirements and conduct a best-fit analysis of the different ERP products offering functionality in its vertical.
Some of the key analysis criteria would include the closer match of the product’s functionality to the company’s business requirements, the specific value addition provided, the installed base of the product, the current and future development plans for the product and so on. The commitment of the ERP vendor towards the product is also critical for future support and enhancements of the product. Such analysis would decide the choice of the specific ERP product.
How is social computing getting into the enterprise mainstream?
Getting insight into consumer behaviour is a key imperative for any enterprise. Traditionally, enterprises have largely employed manual methods to gather consumer feedback/opinion about their products and services. This involves significant challenges and efforts in reaching out to the consumers, collecting relevant data and aligning the same to get meaningful insights.
Today, social computing technologies offer exciting new ways to directly connect with the consumer and obtain consumer feedback in a flexible manner. Such technologies provide tools that help capture feedback in a structured way. We are already witnessing organisations adopting social computing in certain enterprise function areas in the mainstream.
For instance, a leading global IT product company successfully employed social computing for its product launch. Even as the launch was on, marketing could gather consumer feedback instantly through social computing. The issues noticed were fixed by R&D before they could snowball into major problems. Gathering insights into employee behaviour is another area where organisations are employing social computing.
While social computing technologies provide a convenient way to capture feedback and opinions, the challenge will be to transform this information into specific insights. Organisations need to find ways to effectively integrate this information into their CRM, supply chain and analytics systems, and leverage this to enhance the competitiveness of the organisation.
