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ERP solutions drive business efficiencies

By: Pamela Hamer-Koh
29 July, 2010

Feature of the week: The software integration industry is experiencing a boom time with business enquiries for enterprise resource planning (ERP) consolidations driving business solution software companies to work harder and faster, to keep up with demand.

The benefits are clear as companies gain a new sense of urgency to re-evaluate their processes, as they strive to streamline their production costs. As the dust begins to settle, in these post-GFC days, this urgency is clearer than ever. 

A KPMG white paper, released in September 2009, enthusiastically endorsed the benefits of ERP consolidation as an effective way to improve the efficiency and bottom lines of companies through long-term savings, simplified processes, increased transparency and eliminated redundancies. Above all, the improved operational efficiency and workflow automation gained from investing in ERP integration would result in real-time monetary gains and give companies the organisational agility to respond quickly to changes in the business environment, making it a worthwhile area to look into for businesses in this day and age.

"ERP is currently driving a lot of the requirements in terms of software developments and integration in the marketplace," Jigsaw Technology's Robert McAnderson said.

"In the last three weeks we've been approached by three separate vendor organisations, wanting to develop collaborative partnerships to delivering Cloud Computing solutions, via SaaS (Software as a Service).

"ERP, CRM and the business intelligence components have been the area of most interest to our clients at this time," Robert said.

Other market observers echo this sentiment.

"ERP provides the necessary infrastructure that forms the operational and transactional system of record for manufacturers of all types and sizes. With a history that spans almost three decades, ERP has truly become a mature business application," Aberdeen group director, vice president and research fellow Cindy Jutras said.

According to the 5th annual ERP in Manufacturing 2010: Measuring Business Benefits and Time to Value study, released by the Aberdeen Group (published July 2010), the need to reduce costs continues to outweigh all other pressures driving ERP strategies in 2010.

The research also states that 59 percent of the top performers measure quantifiable business benefits as a result of the overall implementation of ERP in their systems and processes. In addition, statistics in the report show a 22 percent reduction in inventory levels, a 97 percent inventory accuracy, and an average of 3.4 days to close a month - compared to the industry average of 5.3 days.

"With Suntory, a major liquor distributor client of ours whose ERP solutions have been consolidated by our software integration team, the merging process of their ERP solution was done through developing an EDI solution to electronically receive purchase orders that automatically turn them into sales orders, then into invoices, which then issued electronic purchase order confirmations and gave advance shipping notifications and e-invoices to its customers," Jigsaw Technology's Robert McAnderson said.

"Our clients were extremely pleased with the resulting paperless solution which achieved a 500 per cent productivity gain through the implementation of our ERP system integration."

According to AMR research, the market for ERP software will reach $47.7 billion by 2011, up from $28.8 billion last year - a compound annual growth rate of almost 11%.

With globalisation, midmarket growth and other factors increasingly driving the need to minimise costs and maximise time efficiencies to improve business processes and bottomlines, ERP integration solutions has been clearly proven to be a viable method for achieving these goals.

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