The global manufacturing economy is at a crucial crossroad. While technology and globalization have opened exciting new revenue streams and markets, they have allowed a sobering downside to sneak in behind them. Interconnectedness has led to interdependence, causing shifting economies on one side of the globe to send shockwaves all the way to the other. The resulting inconsistent market behaviour has devised manufacturing executives wondering in what direction markets are genuinely headed and what actions they should take now.
As is often the case, global uncertainty has divided the manufacturing sector into one of two camps. Some fortunate producers have found themselves growing despite the unpredictable economic climate, and have ramped up production to near-capacity. Others may be considering or have already scaled back, cautious of another prolonged downturn. Both, however, are waiting for current market gyrations to calm down. Hopeful that the economic smoke will clear and the markets will reveal they’re true intentions. How long that may take is yet another question mark.
The moment they make themselves available and insulate their bottom lines from erratic behaviour in emerging markets. One critical action they can take is to adjust their ERP strategy to increase agility, decrease complexity and leverage the benefits of cloud computing.
External market drivers have always challenged manufacturers to find profitable solutions in the face of uncertainty. Lately, however, an internal obstacle has emerged to threaten manufacturers’ profitability more than overseas fluctuations ever could: traditional ERP systems.
ERP systems, whether on-premise or simple hosted cloud, start out with good intentions. However, somewhere between version 1.x and the latest-and-greatest, these digital behemoths invariably lose their way. Rather than shoring up their underlying ERP architecture to meet modern needs like cloud and mobility, they try to match their competitor’s offerings, adding layer upon layer of disjointed features with little regard to how customers will use them.
As pressure mounts to make their true capability match their marketing brochures, they lose sight of fundamental elements like simplicity, ease of use and low total cost of ownership.
The version that finally ships is usually a convoluted mess of disjointed modules and bizarre human interfaces that make end users cringe.
Make no mistake. We expect ERP to evolve into more powerful systems, taking advantage of the compute benefits Moore’s Law affords. However, the vast majority of legacy ERP vendors continue to run up a debt of complexity with every new version, leaving their customers to foot the bill in the following ways.