The Magic of ERP – A Tool for Agility and Resilience Drives Business from the Cloud

On the journey from paper through Word and Excel applications, business operations with the help of the enterprise resource planning (ERP) system have soared into the cloud, connecting all processes that could be connected. The dramatic onset of the coronavirus pandemic over the past year and a half has changed the business model even in companies that had not previously considered a complete digital transformation of their operations. ERP has also done this, a business information system that now enables complete control over business processes through cloud operations.

According to a global study by the American consulting firm McKinsey, market leaders, as well as smaller companies, recognized the benefits of applying cloud business applications during the pandemic and rushed into digital transformation and the introduction of ERP at the beginning of 2020. The introduction of new technology was more important to them than the costs of investing in it, so by innovating business processes, they made a quantum leap both organizationally and industrially.

Bravely to the Cloud

As a result, the American consulting firm Gartner, which predicted in 2018 that eighty percent of business processes would be conducted in the cloud, now forecasts a significant increase in spending on corporate software; in 2021, it will grow by 10.8 percent, and in 2022 by 10.6 percent. Gartner’s Vice President Sid Nag claims that research shows that cloud consumption is gaining increasing momentum as new technologies such as containerization, virtualization, and edge computing become commonplace. He also states that the corona pandemic has helped IT department directors overcome their reluctance to move critical business tasks to the cloud. The goals were to stimulate performance and agility, lower total cost of ownership (TCO), higher return on investment (ROI), and greater security and standardization by integrating, simplifying, and modernizing the core digital infrastructure and applications. To achieve this, performance and operational optimization is extremely important, which is why modern ERPs must include advanced analytics of live transactions and real-time operational reporting.

According to Ronald Hogenboom, Senior Manager for IT, Finance, and Logistics at the Dutch TomTom International, a company engaged in location technology, launching SAP ERP has shortened the time needed to launch new systems from several weeks to hours and increased employee agility, while spending less time on monitoring, maintenance, upgrades, troubleshooting, and backup has saved the company money.

Old Ailments

Today, Croatian companies also widely use ERP solutions, and some are even developing them. How ERP works and what its future holds was explained by Mario Dalponte, head of the NAV/MS BC department at Omega Software, a Croatian company that implements Microsoft’s ERP but has also developed its own solution. ERP mainly consists of integrated applications with a central database that collects data from all departments in the company: accounting and finance, production, procurement, sales, warehouse operations, human resources…

– Before the emergence of modern enterprise resource planning solutions, companies kept business data mainly in paper form and in various records, and with the help of Excel and Word applications. Users could only access data physically or by sending emails, so access was limited, and business processes were much harder and slower to track. At that time, the possibility of entering incorrect data was much greater, and data that was only on paper or in directories on network servers was also significantly less secure – says Dalponte.

Fewer Errors

Modern ERP solutions automate, simplify, and connect many processes and allow data sharing among users, as well as with other applications and partner companies if necessary. Users and company managers can obtain a comprehensive and detailed overview of the company’s status and business processes in all its departments through the integrated ERP solution and make timely business decisions based on the information they receive.

– With ERP, it is easier to identify deficiencies in business processes and easier to correct them. Data is easily and quickly accessible, which increases user productivity as they no longer have to spend hours searching for the necessary information. In short, ERP systems help connect people, processes, and equipment in companies – emphasizes Dalponte.

Code Migration

He adds that ERP solutions must always evolve in step with new technologies because the application of such technologies ensures quality and competitiveness for ERPs. Such solutions are also a better choice for companies that will have a market advantage thanks to them compared to those that do not use ERP or use outdated solutions.

– It is not easy to predict what ERP will look like in the future, but trends indicate the direction in which this technology is developing. There will be an increasing shift to cloud solutions. This became particularly clear last year when many workers had to work from home due to the coronavirus pandemic. Cloud ERP has facilitated remote work, and since it also provides other benefits, it can be expected that this model of work and cloud solutions will not be abandoned. Cloud solutions are also particularly useful for small companies, which make up the majority of the market and create the most jobs. Such companies can leverage the benefits that ERP brings through the cloud without having to invest in a large specialized IT team to maintain it. It is also expected that legacy ERPs will continue the initiated code migration to cloud solutions and thus adapt even more to end users. In the future, the development of ERP technology will be influenced by the Internet of Things (IoT) and artificial intelligence (AI). Future ERPs will be personalized, include enhanced business intelligence functions, etc., and the development of mobile device solutions is also anticipated. ERP solutions are one of the main pillars of a company’s IT infrastructure and will certainly be one of the main drivers of digital transformation in business in the future – notes Dalponte.

Omega Software introduces two types of ERP solutions: Microsoft Dynamics 365 Business Central, a standard global ERP solution used in various industries, and Imperios – BGA, its own modern ERP solution with highly customizable modules used by other Croatian and regional companies.

Quality and Speed

The company mStart plus does not have its own ERP solution but offers clients leading global ERP solutions, such as those from SAP. According to Emina Subašić, Director of the Business Information Solutions Department at mStart plus, the company covers the entire business with the latest technologies – from procurement processes, production to sales and reporting. These solutions are tailored for small, medium, and large companies.

Subašić emphasizes that a company that manages its business well wants to have a fully integrated information system that will provide quality information as a basis for management and decision-making. A comparative advantage of mStart plus is that it can offer comprehensive solutions that cover all parts of the business of large systems. For example, it has simultaneously implemented the SAP S/4HANA system in three large companies, involving fifty top experts and covering the entire business of the clients. Such ERPs save clients time, optimize inventory, timely detect anomalies and opportunities, and provide them with leverage for quality business decision-making. But they perform the same work for smaller companies as well.

– Smaller companies have fewer available resources, which is why a quality solution is important for them to gain more time to focus on business. It is also important for them to implement solutions quickly, which is often one of the requirements – says Subašić, adding that for small and medium-sized companies, SAP Business One is an excellent solution, which holds the title of Best Core Platform. Its features include a high level of flexibility and easy adaptation to specific business needs, as well as the ability to integrate with other systems.

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