SAP in Transition Economies: Part II
In my last post on SAP in Transition Economies, I shared with you my observation, of organizations in and around the Caspian Sea region leaning more towards SAP adoption in the last few years. Let us now look at the probable reasons which might have led to this change of mindset and approach.
On taking a deeper look, I realized that large and medium size enterprises in this region were actually facing the heat on many aspects. Despite growing at a rapid rate, they are finding it hard to leverage business best practices because in-house custom systems are unable to provide required automation and enterprise-wide visibility. Add to this the pressure of meeting regulatory compliance, which can prove a hand-full, when you are running your business through custom software. Moreover, as these companies are also expanding their footprints through mergers or acquisition, their legacy applications are proving to be of prime concern. This eventually is leading to serious business problems like increase in inventory, longer production lead-time and inaccurate forecast model. Real-time information exchange across the organization inevitably has become very complex and something to seriously think of. If we do a detailed analysis, we can probably conclude that these organizations are facing the following main challenges on today’s date:
Need for Industry Best Practices: A number of mid-sized companies in this region are actually expanding in leaps and bounds through organic and inorganic growth. Such explosive augmentation also comes with its share of problems. Thus, these organizations now feel the need of having a complete ERP system to leverage the entrenched Business Best practices. And who better to offer this than SAP.
Lack of automation: There is no doubt in the fact that any organization is bound to struggle with disjoint software applications, running in silos, which do not support end-to-end business process automation. When you have data related to your different business functions like sales, finance, procurement posted in different systems, you can end up with the risk of duplication of data, which will be error-prone and will ultimately require more manual effort for reconciliation. And we are left with an inefficient supply chain management process. Coupled with it, lack of system integration is proving to be of major hindrance to having an effective business intelligence mechanism, as proper data capture is pivotal to measure key business KPIs.
Regulatory Compliance Cost: Most industry sectors today have to adhere to stringent documentation and data maintenance procedures related to their procurement, production and distribution processes to attain regulatory and legal compliance. As long as the organization was small, it could afford to comply using manual processes without incurring excessive costs. However, with time as these companies grew, the costs and complexity related to regulatory compliance also increased substantially.
Business on the Web: Today internet is proving to be absolutely critical for cost saving for companies which intend to carry out business on the web. It is extremely important for some of these companies to ensure that their customers can place and track the orders directly through their website, which thus in turn has to be linked with the back-end legacy systems. However, such an internet enabling actually requires high quality of transaction and master data maintenance, and the old legacy systems for these systems are falling short by a considerable margin in this aspect.
So, to address the burning issues mentioned above, these organizations today are gearing up for traditional, green field ERP implementations, on an all pervasive SAP platform.
