ERP systems have been through enormous transformations since they first emerged. After undergoing various subsystems added in the 1980s and 1990s, they adapted to the Internet and globalized business from 2000 on. From that point, they were then again impacted by different business channels that developed from 2015 onward.
However, these transformations only consolidated when ERP systems designed by Omniera were introduced. Note that each new major disruption to markets has led to ERP systems being adapted to continue supporting new business requirements. In the course of this metamorphosis, some of the more conservative players fell by the wayside while ERP giants bought out the companies best suited to serve emerging models. As a result, interesting new players appeared.
The rigidly monolithic ERP systems that previously dominated the scene during the last two decades will continue to lose relevance over the coming months and years. Change of this kind creates a need for global players to efficiently create drastic changes regarding their positioning as they review their agendas. Previously overarching and inflexible methods are no longer applicable in a scenario such as Omniera’s, in which businesses are subjected to dynamic change frequently.
In this context, an important point is that software development has gained a new status over the last decade due to advancing technology - functionalities that were extremely expensive two decades ago are now available for almost no marginal cost. In addition, with the growing avalanche of service-orientated architecture (SOA), the big monolithic blocks - legacy and traditional ERP systems offered mostly by major players - are steadily losing market share. In Brazil alone, for example, there are over 560 ERP system vendors.
#ERP Systems - Evolution and The Current Situation
Fast-changing shopping behavior is changing businesses too. Top brands have adhered to various business channels to enhance consumer interaction while leveraging and strengthening their market presence.
Management systems have had to keep in step with the new ways of consuming that are being seen, such as new business channels based on e-commerce, marketplaces, mobile commerce, etc. As a result, disruptive companies cannot continue to run businesses on the same lines as they did 20, 30 or 40 years ago. It does not make sense, and it does not correlate with modern digital commerce practices.
Particularly since 2015, these transformations in relation to business management have taken place given the consolidation of Omnichannel concepts and the need to combine brick-and-mortar points of sale with digital channels, along with strategies that work in cohesion with e-commerce, marketplaces, social media, online campaigns, etc.
The book Omniera ERP Systems - Business Intelligence, Planning, Management and Operations breaks a key paradigm by showing innovations in the architecture and conceptual model of ERP systems, which have always been seen as very rigid systems lacking in agility and fluidity. However, this book shows ERP systems that have been redesigned to ensure the agility required to cater to everything from startups to complex Omnichannel operations.
Several changes were made dating back to 1990, when ERP systems were consolidated, through 2015, when they were initially redesigned to support Omniera. Among them were the following chief points:
- Instead of the traditional models’ use of text file exchange, datasets were fed directly into databases from web services until this development reached the current use of APIs, which are simpler and more adaptive;
- Registering procedures no longer assume this process should be designed exclusively to issue invoices. In other words, the same product would now have several descriptions and be offered using different strategies such as photos and storytelling, which are commonly used in e-commerce and marketplaces to contextualize the sale of an item;
- Stock management evolved to support drop shipping, cross docking, online sharing with numerous sales channels and new warehouse management technologies such as RFID, voice command picking, automated packing and billing using conveyer belts and robots;
- Planning and managing procurement and purchasing use more dynamic, fluid supply chains to arrange logistics by category and analysis of turnover, coverage, order point, variable coverage, continuous replenishment, Open To Buy (OTB), Open To Receive (OTR), Retail Inventory Management (RIM) and Retail Calendar 45. In addition, this new approach enables companies to optimize their financials based on accurate consolidated visualizations of sales, margin, inventory and receipts;
- Instead of traditional price planning in industry and distribution, businesses are switching to assertively work from variables involved in online sales, such as different expenses and fees or rates for e-commerce platforms, marketplace payment gateways, shipping, packaging, etc.;
- Businesses are creating model showcases to instantly identify the channels through which each product is being offered, in addition to their price, delivery date, picking from stock, checking and tallying, invoicing and shipping to customers. Among many other advantages, they are able to organize all showcases, campaigns and promotions within a single ERP system;
- Ability to deal with all kinds of tax complexities, ranging from those characterizing different industries, importers and distributors;
- Moving on from traditional outdated models with their limited and invariable workflows to manage the entire business process through customized workflows instead. This is done using Business Process Management (BPM) concepts that will enable a company to orchestrate all sales orders from its OMS (Order Management System) regardless of which channel they orginate. This also individualizes differences for each channel and allows for common business rules to be grouped together for several channels, thus optimizing management of the company’s orders as a whole;
- Moving on from traditional ways of exchanging or returning goods to reverse logistics models. This means that shipping costs for each delivery activity must be handled separately, thus requiring agile processing of exchanges / returns to eliminate negative impressions for consumers if something goes wrong. In addition, each operation’s profitability must be properly considered, taking into account the fact that a consumer may have changed a product several times, etc.;
- Being able to offer same or next-day deliveries, or in some cases delivering within a few hours to meet Same-Day-Delivery needs;
- Customizing products to make sales processes more innovative and consumer products more exclusive;
- Adding depth and decreasing inventory disruption while sharing across all branches, depots, distribution centers, partners and suppliers. As part of this process, a single repository enables the concept of “infinite shelf” of product possibilities;
- Enabling new businesses and channels with the introduction of online-to-offline (O2O or ‘clicks and bricks’) to manage, say, a restaurant whose tables are booked through various third-party mobile apps or a laundry services company that sells packages of services online and enables customers to track the whole process online;
- Support for new business through a new Omni POS concept, which integrates brick and mortar stores with online stores, or a POS that can be used for itinerant sales during events and / or shows. All of this must be conceived hand in hand with managing stocks and financial transactions;
- Natively integrated BI solutions that do away with the old stereotype of fixed-template ERP system reports. These BI solutions will diversify the creation of reports, charts, performance indicators, dashboards and even predictive analytics;
- Migration from on-premises IT to cloud computing, thus making information more accessible and enabling an Omniera company to be truly connected;
- Improved selection, purchasing/engaging, deployment and maintenance processes to ensure more affordable experiences aligned with customers’ needs and their available structure.
An ERP system that has the above mentioned 17 characteristics is ideal for the vast majority of companies that operate through more than one business channel and are changing their management models to more innovative methods.
Given the above changes and constant transformation affecting business, companies have been switching their ERP system in recent years. This whole process has led to disuse for legacy and / or traditional systems (monolithic, inflexible, and ‘one size fits all’) while being replaced by ERP systems designed for Omniera, which are flexible, fluid and adaptable to new scenarios.