Enterprise Resource Planning (ERP) is crucial to the success of any business. The software and technology used to integrate the various management components of a business provide a holistic view of business processes and facilitate the finest technical nuances.
Software as a service (SaaS) and cloud-based solutions for ERP and cash management systems (TMS) are the overwhelming preference of modern businesses. However, ERP migrations can be complex and time-consuming, especially when corporate treasury and IT staff lack the bandwidth to support such a transition.
To learn more about how partnering with a specialist helps reduce the pressure encountered during ERP migration projects, PaymentsJournal spoke with Jon PaquetteVice President of Solutions, USA at Treasury Intelligence Solutions (TIS), and Steve MurphyDirector of Commercial and Corporate Payments Advisory Services at Mercator Advisory Group.
Cloud-Based SaaS Solutions for Enterprise Resource Planning
PaymentsLog Cloud-Based SaaS Solutions for Enterprise Resource Planning
Exit the old complexities…
Enterprise resource planning has never been easy. Historically, complicated aspects of ERP have involved hosting and architecture. These complexities are largely solved with SaaS and cloud-hosted solutions these days, the benefits of which are mostly felt on the IT side.
“The IT department no longer needs to create, maintain and support the infrastructure on which the ERP is ultimately hosted,” said Paquette, “which is a big advantage over previous on-premises models. that the organizations were using”. This frees up IT to take advantage of the unlimited processing power of a cloud provider like Amazon Web Services (AWS) or Microsoft Azure.
The biggest business benefit of cloud-based SaaS solutions for ERP is improved accessibility over on-premises systems. Giving everyone involved access to ERP applications offers a huge opportunity for improvement, not to mention an easier time with automate and standardize process.
…with the new complexities
Now, the new challenge is for companies to get the most out of their investment in ERP migration. “A lot of complexities don’t go away,” Paquette pointed out. As companies consider all the different systems they are migrating from, there are a number of questions to ask:
- What other integrations are needed?
- What are the payment processes like?
- What do reconciliation processes look like?
- What do cash apps look like?
- How can these processes be automated?
- What data is needed to control everything?
APIs (application programming interfaces) also present an opportunity. More businesses than ever want to use APIs to gain real-time transaction insights for cash forecasting, cash positioning, reconciliations, and more. For ERP migration in particular, APIs can be very useful for bulk accounts payable payments.
However, there are substantial variations both in the type of APIs that banks and businesses support, as well as in whether or not these organizations are able to handle API integrations. “Not everyone has the ability to manage the creation or consumption of APIs,” Murphy remarked. “Another problem is the lack of API standardization.”
Apart from payment platforms such as TIS can help companies resolve standardization issues. Specialist partners can also help companies avoid redundant implementation processes by navigating API integrations that are workable in the present and will adapt seamlessly to future capabilities.
Whatever the specific ERP concern, SaaS is a simpler, more cost-effective, more scalable, and more accessible solution. Still, it’s important for companies to make the transition in a controlled way that doesn’t disrupt business. “Business continuity is the most important objective during an ERP migration,” said Paquette.
Tips for a successful ERP implementation
There are many common errors that can occur during ERP migration. Paquette offered several key points to keep in mind throughout the process:
- Understand the business needs of end users – Ensure that ERP systems are tailored to end-user needs, which can vary significantly from region to region based on different standards and protocols.
- Recognize knowledge gaps – There is a wide range of topics that need to be addressed and understood during the implementation process, and it is essential to know where to fill these gaps with external resources, lest small problems derail the process and don’t involve everyone in finding a solution.
- Compartmentalize and pace workflows – Separate finance-related and non-finance-related ERP functions. Take ERP migration in small, controlled chunks, and know that ERP migrations are multi-year initiatives.
- Don’t lose sight of your vision – It’s easy to get bogged down in technical components, but always keep an eye on how the ERP implementation will bring about major improvements.
- Seize the transformation opportunity – Investing in ERP migration with the help of an expert partner providing SaaS cloud solutions is a chance for businesses to take an exciting leap forward.
“There’s a perception that you save money by doing things in-house during an ERP project,” Paquette said. “Partnering with someone who specializes in this particular aspect of SaaS solutions is really critical to the success or failure of your ERP project, and the SaaS fees you pay to a vendor are pretty minimal compared to the investment you you put in the full ERP migration.
The essential partnership between the company and the supplier
It takes a village to migrate ERP integrations; neither the ERP vendor nor the business itself can do it alone. IT and treasury staff may lack the bandwidth to play a major role in the migration. Specialist providers such as TIS will fill in the gaps with support and advice on SaaS capabilities. External consultants will go deeper into the integration with specific information on how the ERP system translates to regional connection points, but ultimately the responsibility rests with the business.
“At the end of the day, it’s the company that really owns [the transition]», specifies Paquette. “They are responsible for what they seek to accomplish, what systems to integrate, the scope, how they envision everything to work well – and if things don’t ultimately go as planned, that’s the company that is affected.”
To this end, there are a variety of deployment strategies for companies:
- Maintain a regional focus – Starting in one zone allows everyone to work in the same time zone with the same standards and provides scaffolding for potential expansion.
- Building on success – Starting with already strong and highly automated businesses means the ERP migration will be leaner and provide valuable experience for future implementations.
- Updating legacy systems – Starting with legacy systems in a particular region or industry can be a good place for companies starting the ERP migration process.
No one can deny the growing popularity of cloud-based software. “About 30-35% of institutions are now actively using the cloud in some form,” Murphy said, “and that’s expected to increase to over 50% over the next two years.” The cloud-based “as-a-service” model offloads the IT implementation and ongoing maintenance expenses of ERP migration, but also enables the latest upgrades and software without having to do ongoing development.
It is important for companies to realize that there is not necessarily an ERP finish line; banking relationships are constantly changing and payment technology is constantly improving. TIS helps businesses stay on track. “The goal of most of these migrations is financial transformation,” Paquette concluded. “It’s important that business end users stay focused on the operational improvements they’re looking to achieve here.”