2020 was a rough road for most of us. New challenges presented themselves on a daily basis, and disruption was the name of the game. Some manufacturers, distributors, and supply chain organizations were better prepared than others. More specifically, the companies that made a decision to move from on-premises to Cloud ERP before 2020 were in a decidedly better position to weather the tumultuous business climate.
Companies that had already gone down the Cloud ERP road had a flexible platform. They could easily configure changes to their system and processes while allowing many of their employees to work from anywhere.
Meanwhile, companies making the journey with an old, on-premise legacy ERP struggled to adapt and couldn’t easily accommodate remote work.
2021 will bring new challenges in addition to those already brought on by COVID-19. Companies on old systems will once again come to a fork in the road. They may realize their current systems no longer meet their needs or support their business objectives. They won’t want to wait long before they change course. But what will it take for them to shift direction sooner rather than later?
Cloud ERP: Travel the Low-Code Road
Cloud ERP has been around for several years, so this road offers a relatively smooth ride, especially since low-code technologies have been added. Low-code tools empower business users to become “citizen developers.” This means laypeople can launch mobile apps, analytics, and AI where they’re most needed in a business. They can utilize drag-and-drop tools to create screens and workflows that automate processes and improve efficiency.
By empowering users to become citizen developers, companies can quickly deploy capabilities that add value and allow them to adapt to market changes. In other words, low-code turns cloud ERP into a superhighway, accelerating the rate of digital transformation.
Companies won’t need a team of programmers to tailor an ERP. This will take the burden off IT in terms of coding, maintenance, and upgrades, and lets people closest to the business create capabilities to solve business problems.
A cloud platform also enables teams to collaborate more effectively through online communities and integrated communication streams, like Slack or Teams. In this way, internal and external stakeholders work together via a secure collaborative platform to address industry requirements and customer demands.
Business Drivers: Mind the Road Signs to Low-Code ERP
Low-code, cloud ERP will become mission-critical in 2021. If companies pay attention, they’ll be able to see the fork in the road coming up ahead, especially if they heed the signs.
The pace of Change – No Speed Limit
The rate of change is set to rapidly accelerate. To keep up, manufacturers, distributors, and supply chain organizations need the speed and agility inherent in low-code, cloud ERP to effectively compete.
Digital Transformation – Do Not Yield
Digital transformation remains critical. But software is the real driver behind such initiatives. Companies need to be able to leverage software in new ways, and ERP must become the core of a company’s digital transformation strategy. Low-code enables companies to more easily tailor an ERP to meet ongoing customer demands.
Workforce Crisis – Road Narrows
Legacy ERP systems will inhibit a company’s ability to recruit technically proficient employees. In a competitive labor market, it will be difficult to find candidates who find legacy applications appealing. If a company manages to attract younger, tech-savvy workers, they’ll be difficult to retain once introduced to the legacy work environment. Younger generations, including millennials and Gen Z, want to utilize cutting-edge technology with a “hip” look and feel.
COVID Catalyst – Detour Ahead
COVID-19 exposed the weaknesses of legacy ERP – too many manual processes, an overreliance on spreadsheets, and non-integrated forms of communication are just a few of the shortfalls. Not only did COVID-19 reinforce the need for speed and agility, but it also redefined what “business as usual” will look like in the future, including the need to support remote work and enable a resilient supply chain.
Competition – Passing Lane
Companies that continue down the legacy ERP road are headed to a dead-end, allowing competitors to pass them by. They’ll lose ground to companies already on the onramp to cloud ERP. And this cloud ERP road is sure to become a superhighway with the bandwidth to handle more customers, transactions, and growth.
Legacy ERP: Left in the Dust
Manufacturers that operated with a legacy ERP faced significant difficulties in 2020. COVID challenges aside, ERP systems designed over 20 years ago are not built for the dynamic nature of business today.
The crux of the problem is traditional or legacy ERP systems are difficult and expensive to customize and change, often requiring consultants to make even the smallest tweak, such as adding a new report. This drains time and resources away from ongoing innovation. In fact, only about one-third of legacy-ERP users are running the latest version of the software and are literally stuck on an old release.
Understandably, some companies might be reluctant to start down a new path. But they’re getting left in the dust with yesterday’s ERP. These systems don’t fit their businesses anymore. Some companies are hanging onto an outdated release due to the time and effort required to upgrade and re-configure a new version to their needs. If they haven’t read the signs and started to look for a more modern solution, they may be unable to compete.
Case in Point: Shifting Lanes
One manufacturer faced this type of fork. It essentially had two choices. Down one path, it could perform a major ERP upgrade. This would require implementing the latest version of the software, re-configuring its unique system customizations, and coding for new compliance issues.
The second option was a modern cloud ERP with low-code capabilities. This platform was highly flexible and would better equip the company for the future, as it could easily adapt to changes in the market or regulatory environment.
In comparing the two, the company realized option one would be complex and costly, and it could cause delays and possible disruptions to their business. The second option provided a modern platform that could drive efficient operations. Making the decision to go the cloud route easy.
The Road More Travelled
In 2020, COVID-19 made many companies abruptly aware of the problems inherent in their legacy ERP systems. These systems couldn’t easily adapt to volatile market conditions, couldn’t support resilient supply chains, and couldn’t easily accommodate remote work for employees.
Meanwhile, innovative companies already on the road to modernization with cloud ERP were better positioned to navigate the issues brought on by the pandemic. And with the addition of low-code customizations, they’ll be able to adapt to the ongoing changes ahead.
With the prospect of mass vaccinations in 2021, we could see commerce rise to pre-pandemic levels. Companies on legacy ERP solutions must rethink whether they want to continue down their current road, as it could hinder their ability to respond as the economy reopens.
Although companies must read the road and signs themselves, choosing low-code, cloud ERP gives them a modern, flexible platform to compete, grow, and thrive in the year ahead.
