The top ERP trends to watch out for this year
1. ERP and SaaS
Traditional ERP applications are stored on your servers, which means you're responsible for upfront hardware costs and data backup and recovery. SaaS-based apps are stored on cloud-based servers, much quicker to update and scale, and don't take up any valuable office space.
In several other business app sectors, including CRM, HR, and talent and procurement, SaaS has become the default deployment model for new implementations. For large enterprises, adoption will be more restrained near-term, but solutions are maturing quickly, and we will see significant adoption at scale for complex businesses within five years.
Your incumbent on-premises ERP vendor may offer an attractive migration path to SaaS, but you're advised to take care to understand the benefits and costs of such a project—and whether the new SaaS offering delivers relevant architectural, flexibility, and usability advantages similar to products natively built for SaaS.
2. SaaS-Only and Mixed ERP Options
Although the software landscape seems to be an either/or proposition, you don't have to abandon an on-premises product in favor of a SaaS tool. Often, you can work with your vendor (depending on which company it is) to build a mixed model, which gives you the flexibility to add new SaaS-based modules to your ERP tool without having to start from scratch.
For example, if the on premise ERP tool works perfectly but you'd like to add document management and CRM to the mix (without having to purchase additional hardware), then you can plug SaaS modules on top of your existing ERP. This is becoming a more popular option for users, especially as more business IT becomes cloud-based. Make sure to speak to your current vendor or potential vendors to find out if this is an option.
The key forecasting trends for the ERP market in coming years
The Key Growth Trends for ERP are as follows:
- Project ERP market is estimated to rise to approximately $41.69 billion in sales by the year 2020. Between 2014 and 2020 ERP will register a growth of 7.2 percent.
- On-premise ERP software will continue to hold a majority of market share by 2020, occupying up to 57 percent. However, cloud-based ERP continues to rise in popularity, with a projected growth of up 10 percent by 2020.
- From 2014 to 2020, aerospace and defense verticals are expected to contribute a total CAGR of 8.9 percent.
- From 2014 to 2020, SMEs are projected to contribute a CAGR of 7.9 percent.
- By 2020, the finance function is projected to contribute 30 percent growth to the overall market revenue.
- By 2020, Asia-Pacific is projected to contribute $9.77 billion.
The advantages for ERP in the financial sector of a nation
At this time, the main motivation of some companies for choosing ERP is to achieve an improvement in the management of their financial area. Sometimes they rush into the decision without taking into consideration the real contribution of the implementation in relation to the benefits that may provide this section with.
The Field in which the ERP is applied
The high complexity and competitiveness of the market, due to continuous changes in a global environment, requires efficiency and effectiveness in the management of companies. The first issue that needs to be understood in this context is the bi-directional relationship of the different areas and processes of the company. If only the financial indexes are considered, it will not reflect the reality.
As the center of the financial activities of the system, the General Accounting helps to capture and integrate the transactions made inside the module, allowing you to see the influence in financial terms over the enterprise as a joint system.
The system allows the use of measure units in accountable motions. The register of entry of the Daily are displayed in a complete way. This function permits that two users work in different entries in the same accounting package. The MS-Excel is a commonly used source, and ERP provides security in the access of the use macros; through the use of an MS-Excel book it is possible to connect to different companies, and through one single electronic page you can connect to different databases.
In order to maintain a proper order and record of all the activities, all the details related to audits include information regarding who made an entry and when, as well as who created and modified the last time. One of the general worries of potential users is how to avoid the deletion by mistake with details important for the running. Consequently, you can program it to block the modification of details from auxiliary accounts. Since the global economy is a generality, the program has the feature to handle double currency, with automatic and flexible conversion.
This system does not require special closing, which allows you to introduce retrospective entries. It offers the possibility of generating two types of reports: Verification Balance and an Entry Balance. It has the ability to execute a double accounting closing (local and corporate) and the possibility of registering the motions in new fiscal periods without having closed the previous period. One of the most important characteristics appreciated by the users is that the accounting information of several years can be maintained online without affecting the performance. The systems could be integrated with other modules for the automatic reception of accounting entries and it allows the accounting consolidation of an unlimited number of enterprises, in an unlimited number of levels, which constitute a hierarchical pyramid that could be represented as a tree.
ERP Specific Benefits
The inclusion of ERP in the Financial Area gives support to decision making since it guarantees reliability and total security on the accounting information.
Another advantage provided by ERP is the great operational flexibility and the fact that it is a very useful tool for multinational companies and corporate bodies since it permits them to execute the fiscal closing. Likewise, it is having another outstanding feature which is to make easier the work of external and internal audits, and gives the flexibility to do research on historical information.
The benefits of an intelligent financial management are the result of a net of independent connections that join a wide range of activities of the enterprise in its daily operation, and a huge range of interlocutors of the financial department.
To achieve integrated business processes, it is necessary to have open access and interconnect the different financial functions: accounting, treasury, management of payments to providers and management of the client’s credit. The main objective is to open unifying tracks so that the data and real work can flow easily and safely from one compartment to another.
An efficient solution for the financial chain of value management should include the data of the banks, of the financial markets, branches of the company, providers, clients, electronic marketplaces and, investment managers. One of the most sophisticated and expensive systems is ERP, which goes ahead of the accounting and integrates different departments. An efficient system of financial management becomes the initial point of all the financial information that circulates around the enterprise. This means that it not only compiles comprehensive information and delivers it, but also directs the information in the adequate format to the right person that needs that information in a precise moment to perform a task.
ERP also offers better access and more safety. All the components of the financial department will be able to access the chain of flow management. However, each person will only have access to a limited number of functions and will see the details and tasks that are previously authorized for him. On the other hand, the financial director as the main administrator can manage a huge number of processes, and can use the opportunities of communication.
Another area where the new technologies could improve the management of the funds is the quick cashing of accounts to charge. The result is evident: it charges before, and the DSO and credit risk decreases. The fund investment of the enterprise accounts to charge is minor.
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