What do recent technology advances mean for ERP?
The only constant when it comes to technology is change. Mobile networks are improving coverage, rolling out 5G, and introducing narrow band IoT networks. Not yet solved, but there have been significant improvements in battery capacity. The software industry has developed complex image recognition algorithms, AI is a hot topic in application development, and integration is faster than it has ever been.
These advances have opened up opportunities for extending ERP not previously feasible. This includes opportunities to extend ERP processes beyond the enterprise walls, providing new insight, new opportunities for new business models, revenue and automation, and ultimately cashable benefits.
Extending ERP processes: Real-world client use cases
The future of ERP is here. I’ve already helped many enterprises extend their SAP systems using these technology advances. Examples include:
A re-useable medical kit embedded with tracking, tamper, and usage sensors: Kits are distributed across a wide supply chain – including manufacturer, shipper, sterilizer, holding warehouses, and hospital stock rooms. Historically, this has been hampered by poor record keeping across multiple systems, leading to kit loss. Now, the entire supply chain can view real-time inventory and, for example, sterilization status. Hospitals need not cancel operations for lack of the right kit, replenishment is automated, and since the manufacturer now knows about the tools used during surgery, kits can be refined.
- Flow-monitors for real-time consumption monitoring and billing: We enabled flow monitors on the consignment stock of large paint containers used in the aerospace and car industries. The supplier can now real-time monitor stock at customer sites, and automatically invoice based on consumption. The result? No more stock outs, and increased cash flow.
- Smart helmets used in open cast mines to improve worker safety: We fitted helmets with an array of monitoring sensors – gas, impact, and fallen worker. Great for improving worker safety - but there are operational benefits too. Previously after a blast, each worker was contacted by walkie talkie individually. Now a simple check-in button means safety checks take seconds, rather than hours.
New technology, new business process, new revenue streams
Opportunities also now exist to extend, change, and create new business processes.
The classic example is a product as a service. We know that customers don’t want a drill, they just want to make holes. Or a customer doesn’t want to own an expensive earth mover, they just want to move earth. Today’s technology allows manufacturers to sell what clients actually want – the service, not the product - and in the process, help manufacturers create new business models.
With embedded asset monitoring and sensors providing detailed feedback on condition and machine usage, a manufacturer doesn’t need to convince a customer to buy equipment. But to pay for how much that equipment is used. Usage sensors detect holes drilled, buckets loaded, miles driven, drinks dispensed, and hours used. All feed to the ERP to bill automatically. In parallel, condition sensors and predictive failure models allow the manufacture to maximize equipment availability. This means that the manufacturer has created a new service business model, offering customers an opex, not capex expenditure, therefore opening up new markets with the help of IoT networks.
This is, of course, just one potential use of new sensor technology. The reduced cost of connectivity and hardware, and the introduction of low power IoT networks, means that asset monitoring is possible on a more granular level. Enterprises worried about the transport of a sensitive product – medical, beverage, electronics, etc – will no longer monitor the environmental conditions of, say, an entire truck, but will be able to monitor the conditions of individual pallets, kegs, or parcels.
Pilot ideas quickly and cheaply on the cloud
Advances in cloud software platforms like SAP’s Business Technology Platform provide the tools, framework, and system integrators to quickly and cheaply pilot new ideas. If no template exists, simple integration can blend analytics, AI, IoT and services like image recognition to deliver a bespoke supply chain solution. The technology is here now. You need to innovate before someone else does.