Is ERP an obsolete spend analysis platform?

Although software companies are working constantly to make their solutions more flexible, scalable and intelligent, many professionals remain skeptical of ERP's capabilities.

The reason why? In the traditional sense, ERP has functioned more as a spend analysis platform, used by financiers to make sure an organization isn't operating at a loss. However, the complexity of global sourcing has obligated accountants to consider three elements:

  • Manufacturing operations management
  • Demand fluctuation
  • Sales success

In regard to these three factors, enterprises with hundreds of partners distributed worldwide need to be able to swiftly collaborate and scrutinize data together. The majority of ERP systems, according to SupplyChainBrain contributor and NeoGrid CEO Paulo Viola, are incapable of doing just that.

What is e-procurement? A solution

In his article, Viola acknowledged the disparity of systems and how it negatively affects materials acquisition and liquidation. He noted the importance of operating at the speed in which contemporary consumers purchase goods, which is incredibly fast considering the technology individuals have at their disposal.

So where does the solution lie? E-procurement. Capitalizing on the benefits of business process outsourcing isn't a bad idea, all things considered. Enterprises would benefit from contracting a company that can not only provide enterprises with professional insight and expertise, but supply them with a platform through which they can:

  • Easily share information with overseas partners
  • Measure demand for goods with manufacturing capabilities
  • Map out a sustainability plan that all entities contributing to the procurement process can participate in
  • Help production enterprises measure performance against sales output
  • Organize efficient, flexible global logistics routes
  • Quickly change strategic planning based on disruptions (warfare, protests, natural disasters, etc.)

Where does it reside?

An e-procurement solution's capabilities are optimized when hosted in the cloud. Such an environment makes it easy for partners to share data, sanction meetings no matter what the distance and conduct marketing analysis endeavors in real time.

Viola outlined an example of how such a platform can streamline business processes. Suppose a manufacturer and a retailer can trade information on the same platform. Whenever the latter company's inventory reaches a certain level of deficiency, the former organization will receive a notification detailing what goods its customer requires and set up a delivery time.

Flexible operations contributor Greg Goodwin referenced a study comprised of 56 responses, the LNS Research 2013-2014 Manufacturing Operations Management survey, which showed that production companies are still having difficulty adapting to sporadic changes in global demand, fluctuating client priorities and other such factors. A cloud-based, e-procurement solution succeeds where ERP fails in this respect, providing modern manufacturers with the connectivity necessary to prioritize responsibilities.

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