21 June 2019

Mashfrog and the implementation of cloud ERP systems to enable intelligent business

SAP S/4HANA and innovative Intelligent ERP solutions.

The "Third Platform" scenario

Companies are currently going through a very significant transformation phase that is affecting both internal processes – from production to the way services are provided – and the relationship with customers, partners and suppliers. In fact, the digital transformation is pervasive; it affects businesses of all sizes in all sectors and is not limited merely to modernising systems and technology. Its impact can be felt across the board in organisational structures, decision-making processes and new ways of working. Even small and medium-sized enterprises are not exempt from this transformation and must adopt a 360-degree approach to digitalisation, overcoming organisational and departmental silos and smoothing out cultural resistance. 
The evolution of ERP systems offers an effective aid to those looking to implement digitalisation; by their nature, these systems are widely distributed throughout companies, managing various processes belonging to different corporate departments.
The Digital Transformation (DX) is based on so-called Third Platform technology (cloud, mobile, social and big data analytics) and on Innovation Accelerators (including the Internet of Things and cognitive/artificial intelligence and augmented reality systems) and is allowing business to evolve; modern business is characterised by real-time decision-making processes and full data-driven activities. DX is not a simple list of technology projects but a change in a company's culture and its approach to business and the market; this inevitably involves all processes and corporate functions. Thanks to their wide-ranging coverage of processes and functions, ERP systems are widely established within organisations and can act as a select means of accelerating corporate innovation. 

In fact, these solutions are made up of different modules (Financial, Supply Chain, Human Capital, Procurement, Inventory Management, Asset Management, Order Management, Manufacturing) that contribute to the management of key activities belonging to various functions. Their evolution can therefore act as a key lever in a company's shift towards digitalisation and innovation. We have identified some of the new needs expressed by companies that will have a significant impact on ERP systems: 

  • Replatforming: to enable digital business, companies need to develop their legacy systems (in terms of both infrastructure and applications) towards cloud models, allowing them to "open up" to integration with platforms situated outside traditional IT systems (e.g. external cloud platforms, repositories, data sets, etc.);
  • Enabling digital business: companies are moving towards systems capable of enabling business by capitalising on meaningful data and a better customer experience, as well as by providing intelligent user support, thanks to the use of new interfaces based on natural language processing which help improve day-to-day performance; 
  • Agility: digital business must be based on agile systems that can manage processes dynamically and that are therefore mapped out and designed innovatively, including using design thinking and DevOps methodologies. 

 

To meet these needs, the ERP market is evolving in line with the following trends:   

  • SaaS and cloud-enabled: companies are beginning to shift towards cloud platforms that are accessible from anywhere, at any time and via any device, with lower implementation costs and increased agility; 
  • Intelligence: ERP systems are increasingly incorporating advanced analytics features to make the most of the enormous amount of data available to companies; this includes the use of machine learning algorithms that can reduce the workload of the most common manual tasks performed by employees; 
  • Improvements in UX: improved ERP interfaces, which are already more intuitive and interactive than in the past, are giving these systems greater appeal; 
  • Blockchain: as it evolves, this technology will also be integrated into ERP systems to improve the relationship with "trusted" partners and to allow certain activities to be securely certified (transactions, supply chain operations, etc.).

 

The cloud is significantly changing the way ERP systems are delivered, while advanced analytics are transforming these systems and helping develop their ability to "understand" customers and to improve and automate processes. Furthermore, the use of machine learning algorithms and artificial intelligence systems is boosting these systems' ability to support companies through predictive analysis and by streamlining activities such as quality control, procurement and supply chain planning.

Upgrading ERP to SAP S/4HANA

In recent years, many Italian companies operating in the manufacturing and industrial production sectors have demonstrated that their systems need to evolve to respond to the demands of modern business. 
For example, take companies made up of a group of small businesses controlled and distributed internationally (from Brazil to China): these will have various requirements, including more standardised systems, the streamlining and digitalisation of certain core processes, the need to use ERP via mobile systems and devices, and fast and agile access to data. All this alongside real-time analysis and evaluation of simulation scenarios. Companies often choose to upgrade their ERP to SAP S/4HANA, relying on a fully cloud-based model. S/4HANA is the new SAP Business Suite built for the SAP 4/SHANA platform, offering a practical response to the needs mentioned above:

•    Efficiency: reduced data volume and redundancy;
•    Flexibility: cloud, on-premises or hybrid;
•    Real-time: data on suppliers, business partners, clients and machines is processed in real time;
•    Performance: planning and simulation options;
•    User-friendly: new interfaces and compatibility across all devices (SAP Fiori);
•    Smart: allows for predictive suggestions beyond automation;
•    Cutting-edge: technology that supports the IoT, big data, real-time analytics, mobile, etc.;
•    Fast: the average duration required for SAP Business Suite migration to the SAP HANA platform is 6 months (75% of SAP clients);
•    Cost reduction: thanks to a huge reduction in the cloud memory required by S/4HANA, the necessary IT infrastructure and capabilities are significantly simplified;
•    Smooth: customisation can be maintained after migration and used as compatible with S/4HANA;
•    Real-time: processes and analyses company data in order to extract key figures for defined periods in a matter of seconds;
•    Effortless: implementation projects are carried out by SAP Partners (60% of projects, 40% by SAP directly) and users are not required to have specific technical skills;
•    Sales optimisation: improved product placement based on current stock data; 
•    Slim technology: the in-memory technology based on the SAP HANA database is built on a single central database, reducing data maintenance, backup and consolidation and creating additional opportunities for cost reduction;
•    Digitalisation: promotes the digitalisation of key business processes throughout the company and prepares the business for future challenges with SAP S/4HANA;
•    Next-gen tech: supports new technologies like blockchain, IoT, AI, big data, real-time analytics, etc. 

Mashfrog's experience with a wide variety of SAP migrations

The group is currently a technology partner for top clients such as Prysmian (with support for supplementary systems), Enel (with communication and marketing services), Trelleborg and Prima Sole Components (for the management of project implementation without compromising business transformation).

Benefits and conclusions

The positive results that can be achieved by integrating Intelligent ERP are numerous. They include:

•    the possibility of using new interfaces, including mobile ones, to access data and information from any place and any device;
•    faster decision-making processes thanks to the availability of real-time data and the possibility of evaluating different scenarios;
•    access to advanced analytics features;
•    more efficient information sharing;
•    more efficient and agile processes.

Even small and medium-sized enterprises, just like large companies, are now moving towards new technology paradigms to take full advantage of the opportunities and advantages offered by digital business. 
The benefits resulting from the use of new ERP systems are also clear in terms of the optimisation of resources, people and processes, and these aspects will give companies the opportunity to improve their performance and decision-making timeframes.
In the age of the Fourth Industrial Revolution and Industry 4.0, an intelligent ERP is becoming the must-have tool to obtain a competitive advantage and improve productivity and customer experience. What's more, an intelligent ERP can be used by all corporate functions (not just by the CIO or CFO). This is why understanding the advantages of the evolution of ERP in business terms is the fundamental step for companies looking to target the digital transformation and move towards an Intelligent Enterprise model.

Andrea Albanese, Digital Enterprise Solutions Manager at mashfrog Group, says: 

"The Digital Transformation process cannot be considered purely in terms of technological innovation – it has to add something new to the way business processes are carried out (through re-engineering, revision, expansion, etc.): forecasting analyses, support for real-time decision-making and scenario simulations are among the main factors required to anticipate contextual changes and obtain a competitive advantage in the market.

SAP S/4HANA positions itself as a company’s digital core, connecting people, objects, business networks and big data on a single platform. Adopting a management system like this, integrated with all the business processes now profoundly affected by new digital technology – such as e-commerce, industrial automation, social collaboration within the company, and the new digital channels used to interact with the market – is a critical move in order to make the Digital Transformation a practical success."