Traditionally most businesses have run on a single piece of software that essentially did everything for them, from their finance to their sales and marketing. But, as time moved on and technology became more sophisticated, business software moved away from this monolithic model. Instead, today’s organisations are embracing best-of-breed solutions for each individual requirement of a business. Yet, businesses have ended up with siloed applications that don’t always talk to each other. Paul Cartwright, Technology & Innovation Director ERP at Node4, explains how businesses can successfully consolidate their applications into a standard, robust solution, which is easily monitored, maintained and extended.
Historically, most businesses that deployed Enterprise Resource Planning (ERP) software relied on a single solution that handled everything from order and asset lifecycle management to HR, procurement and financials. It is rooted in technology that’s now been around for over 30 years, the oldest of these utilised on-premises hardware with dedicated servers, networking and firewalls.
Businesses have tended to stick with these monolithic solutions even if some modules did not perform as well as others. This compromise made sense in many instances because the alternative was to install third-party bolt-ons. Many of these needed their own servers and supporting infrastructure too, and specialist systems integrators were often required to ensure data flowed between the original ERP solution and the bolt-ons.
Yet, despite significant investment in time, money and resources, these efforts were often met with limited success. Sometimes, data still had to be transferred manually from one application to another. Indeed, this is why there are still organisations around today that copy and paste information from procurement spreadsheets to invoicing software.
Manual work like this results in slower, more cumbersome processes and makes data errors more likely – with the knock-on effect of a poorer customer experience. In addition, data often becomes siloed, and the free flow of information across the business, which is required to maintain efficiency and profitability, vanishes.
SaaS-based ERP solutions and the pandemic
Businesses attempted to address these issues by migrating to cloud-based SaaS ERP solutions. Since there were no physical servers and network components to contend with, IT decision-makers were optimistic that these solutions would provide more flexibility and make it easier to integrate business applications where necessary. However, integration with third-party applications still proved challenging, even with advances in API technology, and still often required assistance from systems integrators.
Adoption of SaaS-based business applications really took off during the pandemic as organisations struggled to maintain system access to on-premises infrastructure across highly distributed workforces. Unfortunately, the pressure to meet COVID work from home regulations often meant hasty and ill-thought-out software migration strategies, with IT decision-makers opting for departmental-level business applications that couldn’t easily provide data to other systems.
Given more time, they might have given more thought to the planning stages, selected enterprise-wide software solutions and established inter-departmental agreements about sharing data across the organisation. But none of these things happened, and as a result, data became siloed once again.
Getting the best results from business intelligence software
IT decision-makers quickly realised this approach would not work and, as the pandemic’s work from home directives gave way to long-term hybrid working routines, they were keen to address the issue.
Organisations needed the seamless data flow offered by monolithic ERP solutions. However, they were in no mood to compromise on poorly performing modules or accept siloed data due to third-party bolt-ons.
Application integration became even more important as business intelligence software continued to advance. IT decision-makers wanted to use these solutions to spot customer trends and develop new offerings. However, to work effectively, business intelligence software needs unrestricted data access – data silos and restricted information access mean less comprehensive results.
For all these reasons, many businesses are now choosing to replace their legacy monolithic ERP software with a selection of modular business applications within a public cloud environment.
Public cloud adoption driven by a desire for application integration
The major cloud service providers, Microsoft, Google and AWS, now offer application stores and marketplaces for businesses. They’re easy to navigate and look a lot like their consumer application counterparts. This makes it even easier to select compatible best-of-breed software offerings and create a bespoke enterprise-wide ERP solution.
As such, an increasing number of mid-market organisations, in particular, are telling us that this choice and flexibility, combined with the potential for cost savings, is driving public cloud adoption and has become a catalyst for Digital Transformation.
Of course, there’s still work to be done to ensure individual business applications can communicate with each other and share data securely. Advances in API technology and software developer willingness to build API gateways into their solutions definitely make it easier. However, cloud service providers do their best to make things as simple as possible. Looking at the Microsoft universe, for example, there’s a range of Azure Integration Services on offer, including API Management (APIM) and Service Buses to speed integration and prevent data silos.
Get your data strategy sorted
Once the business applications have been selected and the integration work is done, it’s important to focus resources on data strategy. This will help ensure that all data is of the highest quality, and will help drive gains in profit, efficiency, innovation and customer experience. Steps that businesses might take to achieve this could include:
● Optimising performance and availability of an existing data environment
● Prioritising data systems migration
● Building or expanding data warehouse or data lake environments to cope with current and future data volumes
● Modernising data systems where necessary
● Building or expanding data analysis capabilities for improved business intelligence
According to findings in our latest Mid-Market IT Priorities Report, many companies are already taking this approach. Indeed, addressing the performance of existing data environments and migrating data systems are joint top data strategy priorities for mid-market IT decision-makers.
The findings also showed that over a third of mid-market companies plan to build or expand data warehouse or data lake environments in the next 12 months. This indicates a wish to centralise data and improve analytic and insight capabilities. It also reaffirms the importance of establishing solid foundations to ensure data is accessible and performant.
Looking to the future
As AI evolves, prioritising data availability for integrated applications and wider business intelligence initiatives will become even more important. AI’s ability to pull data from across an organisation is already a game-changer. However, further down the line, AI is likely to revolutionise ERP strategies and become embedded in even more ERP software and business applications. As such, AI may also be a key piece in the puzzle in terms of delivering fully integrated business software solutions and removing siloed data.
It’s important, however, to stress that despite the incredible speed at which AI is evolving, these kinds of advances will take another three to five years. That said, companies do need to start laying the foundations now. First, they should ensure much closer application integration. They should also reevaluate their data strategy in readiness for the greater role that AI will play in business application advances and ERP implementations.