(Newswire.net — April 5, 2017) — In the third quarter of 2016, the U.S. GDP from manufacturing increased to 2181 USD Billion from 2171.70 USD Billion from the second quarter of 2016. The average GDP from manufacturing has been hovering around 1918.77 USD Billion for the past decade. The booming growth has prompted manufacturing companies to shift their focus on emerging technologies, an area which is generally overlooked going by past record.
Disruptive ERP?
Enterprise Resource Planning (ERP) systems have been increasingly recognized as being vital to the performance of a business by strategists who are looking for a silver bullet to help ramp up profits and maintain an edge above the rest. Enterprises have been using ERPs to streamline the business processes and gain competitive advantage. ERP systems integrate different functions of an enterprise from supply chain management to financials and human resources. This inevitably leads every business function to depend on a single, centralized database. This central hub delivers accurate and crucial real-time information to the manufacturing firms.
Today however, there are multiple reasons that are forcing enterprises to move away from their legacy ERP systems:
1. Scaling:
As manufacturing firms grow, their business functions become increasingly complex. ERP applications automate most of the operations with accuracy in the reports and output helping increase the firm’s efficiency and productivity while also providing real-time information, preventing redundancy in the data and improving production, delivery times and customer satisfaction. On-premise ERPs however take longer time to implement and modern ERPs which are cloud-based can help firms adopt faster to the changing needs of their customers.
2. Cost Reduction:
Cloud-based ERPs operate on a software as a service (SaaS) model which is increasingly becoming popular amongst manufacturing firms largely due to the flexibility in the pricing that these models offer. With a subscription-based model, firms can decide how many users would require the ERP and correspondingly pay only for those particular users which leads to savings in expenditure. Furthermore, manufacturing firms have the advantage of deciding to try out different cloud-based ERP providers since the implementation time is faster and the pricing is flexible compared to previous models.
Given these advantages, cloud ERP is poised to become the definitive ERP system for manufacturing since it is fast, cheap and flexible.
3. Competition:
Pressure from competitors who are adopting technology faster is also causing the paradigm shift in the industry with enterprises rushing to implement ERP systems in order to maintain a competitive advantage.
Mobile Supply Chain Applications (MSCA) are also generating a lot of debate and discussion among industry experts. These applications help users stay informed throughout the day with just a smartphone.
The rise of artificial intelligence and the widespread adoption of Internet of Things is expected to lead to further changes in the industry. The impact of big data on modern ERPs is also a challenge as management of the volume of information that will be generated is going to be a complex task for businesses.
2017 seems to be the year where the manufacturing firms could finally break from the past and enthusiastically adopt the modern variants of their legacy applications. The response to these emerging applications has been energetic so far but it remains to be seen if these are indeed the silver bullet that the industry has been chasing after over the past few decades. They might not radically increase productivity but they will definitely lead to major changes in the way businesses are being run and this transformation might usher in a lot of benefits for businesses and consumers alike.