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Strategic benefits of choosing multi-sourcing ERP solutions

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ERP solutions enable companies to use a system of integrated applications to manage the business and automate several back office functions

Benefits of ERP solutions

Benefits of ERP solutions

Benefits of ERP solutions-Change is inevitable. Traditional ways of companies sourcing Enterprise Resource Planning (ERP) are undergoing a change. Companies used to outsource complete IT department or ERP solutions to a supplier or used to run it in-house. Companies are increasingly moving from outsourcing to a single ERP provider; to multi-sourcing with different ERP providers; a shift that is turning out to be a strategic advantage for organizations. Multi-sourcing not only reduces the dependency on a single supplier it also creates flexibility for the organization, while widening the options to source services from ‘best-of-breed’ suppliers, creating a competitive edge for the business while being cost-effective.

In the current world of IT strategy, companies have a menu of competitive offerings to choose from. They have a range of On-Premise and Cloud ERP solutions to evaluate, based on business needs. They are also looking at ways to keep all multi-sourced solutions under one umbrella, with an effective framework around it, which encompasses IT Service Level and financial management. In fact, analysts are also encouraging companies to consider the advantages of multi-sourcing models.

In parallel, it is equally important for this change in approach, to tie-in with business needs and evolving business process changes. For instance, the IT strategies within an organization also need to evolve to support business transformation initiatives through multi-sourcing. A clear assessment of business priorities and overhead should drive technology needs and future IT architecture.

Increased ERP choices drive a multi-sourced approach

It is also noteworthy to mention that the advent of software as a service (SaaS) has also increased ERP choices. Large enterprise software companies offer Cloud solutions and services as part of their go to market strategy. Market reports have forecasted that the SaaS market is expected to attain a market size of $186 Billion by 2024, with a growth of 20% year-on-year.

While traditional ERP offerings tend to run large chunks of a company’s business processes, there are usually gaps and missing functionalities that are often fulfilled by customization. Such customizations usually result in tedious version and release upgrades, which IT is more often than not challenged to manage, and often unable to adapt to the business process changes especially in the midst of business transformation programs in an effective and synchronized manner

To overcome this, ERP software providers offer “holistic solutions” to companies by offering SaaS solutions as “add-ons”, which potentially address all the requirements a customer needs and expects from enterprise software.

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Article Credit: Dataquest

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