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SYSPRO is a 35-year-old ERP vendor that focuses on products for midsize companies, particularly those in manufacturing and distribution. In manufacturing, SYSPRO supports make, configure and assemble, engineer to order, make to stock and job shop environments. The company attempts to differentiate itself through vertical specialization and its years of ongoing development, which can reduce the need for customization and cut the cost of initial and ongoing configuration to suit the needs of companies in these industries, thereby cutting the total cost of ownership. Worldwide its targeted verticals include electronics, food, machinery and equipment and medical devices; in the United States, it adds automotive parts (original equipment and after-market) and energy.
Continuing to expand its product portfolio, SYSPRO recently introduced new modules for voyage and container tracking that should be of interest to manufacturing or distribution companies that import goods or parts. These are designed to be the missing link in supply chain management (SCM), connecting the flow of data from purchase order to physical receipt of the goods at a factory, warehouse or distribution center. Integrating voyage and container tracking into its ERP system enables such a company to have a centralized view of the full supply chain, providing fuller and more consistent visibility into the status of inventories from the point of their acquisition and therefore an easier and more effective means of supply chain and sales and operations planning (S&OP). Such a system could replace the sets of disconnected spreadsheets stored on individual computers in many companies, and the time is right to do that. Today’s longer supply chains introduce greater risk and uncertainty in SCM and S&OP. SYSPRO’s new modules can help companies with long supply chains mitigate this risk and provide greater agility to respond to changes in the status of inventories as they occur in transit. Bringing together this information with the full range of data captured in its ERP system also should give companies a better understanding of their performance. This is consistent with our benchmark research on operational business intelligence, which finds managing performance and risk and identifying improvement opportunities among the top five reasons for using operational intelligence. SYSPRO’s initial release of the two modules supplies the basics needed to assign purchase orders to specific containers, assign customer orders to the inventory in the containers and assign containers to specific vessels. The product roadmap calls for substantial enhancements in built-in analytics and physical tracking (knowing the location of specific containers)that buyers will find useful.
Tracking the location and projecting the expected arrival of products, parts and supplies from the physical receipt of those goods enables a company to manage its supply chain more intelligently. That is, knowing exactly what inventory is in which containers, which containers are on which ship and when individual ships are expected to arrive provides the ability to plan and allocate inventory further back in the supply chain with greater certainty. It makes supply chain planning and management as well as an S&OP process more effective with much less effort since the information about the inventory is timely, reliable, consistent and integrated with the full ERP system and kept in a central data repository. Reliable data about inventory in transit is available immediately and updates about departure and expected arrival information can provide earlier visibility into supply and scheduling issues. Users also have the ability to allocate individual goods or parts to specific customers, distribution or production locations from the point at which the inventory is loaded into the container. As conditions change, companies can update these allocations. While it happens rarely, containers sometimes are lost at sea (approximately 10,000 annually – about 0.1% of those in use) or destroyed during loading or unloading. Shipping schedules are inexact, and there can be delays caused by strikes, quarantines or official inspections that are difficult or impossible to predict with any certainty. These are ample reasons to invest in software that enables more flexible planning and reaction.
Integrating data about inventory along an extended supply chain also can provide managers and executives with a more robust set of analytics that are available on a more timely basis with far less effort than what’s required when the data is stored and managed in desktop spreadsheets. Companies are better able to track suppliers (freight forwarders and shippers), measure and track the accuracy of the container manifests (actual items vs. bills of lading) and keep tabs on these over time to rate supplier reliability or isolate seasonal or other factors and make more intelligent more choices and potentially more accurate plans. Companies also can assign voyage- or container-specific charges to individual inventory items to better understand to total, as-delivered cost of items.
All of the information that SYSPRO’s ERP system collects is available on mobile devices using its Espresso platform. In our research on business technology innovation companies listed mobility as their third-most important technology innovation priority; it enables anytime, anywhere access to data, reports, dashboards and analytics. Especially for those who aren’t working at a desk in an office (such as sales people tracking orders or manufacturing or supply chain managers), access to this information on a mobile device can improve performance by providing more timely alerts and the ability to collaborate more intelligently to advance a process.
To SYSPRO customers that regularly use container shipping I recommend evaluating how the voyage and container modules might allow them to manage these supply chains and their sales and operations planning more effectively, while reducing the time they may be spending using desktop spreadsheets to manage these elements of their business. I also recommend that midsize companies (or midsize divisions of larger companies) in SYSPRO’s target verticals that are considering purchase of an ERP system and that need to manage long supply chains that utilize container shipping should put SYSPRO on their list of vendors to evaluate. Be aware that because the new modules are designed to be part of an integrated ERP system, they are impractical for purchase as stand-alone software or integrated into another vendor’s ERP system.
Robert Kugel – SVP Research
When applying information technology to drive better business performance, companies and the systems integrators that assist them often underestimate the importance of organizing data management around processes. For example, companies that do not execute their quote-to-cash cycle as an end-to-end process often experience a related set of issues in their sales, marketing, operations, accounting and finance functions that stem from entering the same data into multiple systems. The inability to automate passing of data from one functional group to the next forces people to spend time re-entering data and leads to fragmented and disconnected data stores. The absence of a single authoritative data source also creates conflicts about whose numbers are “right.” Even when the actual figures recorded are identical, discrepancies can crop up because of issues in synchronization and data definition. Lacking an authoritative source, organizations may need to check for and resolve errors and inconsistencies between systems to ensure, for example, that what customers purchased was what they received and were billed for. The negative impact of this lack of automation is multiplied when transactions are complex or involve contracts for recurring services.
Our benchmark research shows that data fragmentation, consistency, availability, usability and timeliness are key issues for companies. The information management issues in process design and execution are similar to those at work for analytics. However, addressing them effectively requires a different approach than just creating a separate data store to be the “single version of the truth.” Careful consideration is required to determine the best method to manage data throughout a core business process, particularly when multiple applications are required to automate and support the execution of the process. Software application platforms offered by some vendors make it far easier to integrate niche software applications into processes in a way that may eliminate the need for an operational data store.
The information dimension is usually overlooked in designing business systems because data is viewed as a given, is not explicitly considered (“we’ll work out the details later”) or is considered only an afterthought. This may occur because the information dimension of systems engineering is treated as being of secondary importance to defining the best process and determining the required applications capabilities. But we think making data an afterthought is a mistake. Ventana Research uses a framework that explicitly calls out information (all forms of data) and technology (software, hardware and networks) as separate elements in addressing business issues, rather than lumping the two together as “technology.” Explicitly taking the data perspective into account provides a broad perspective that frames process and technology requirements. We assert that treating data as a core consideration can result in better process design and clarify the issues companies must consider to select the appropriate systems to support the people and process aspects of business operations.
Quote-to-cash is a useful example of where an end-to-end process requires more than just workflow to manage the handoffs as tasks are executed. In some simple cases, an ERP system can handle all of the details. In others, automating the process and data flows may require multiple systems (such as a CRM system for customer and account information, as well as systems for product configuration, contract management, billing and collection in addition to ERP. Some of the data assembled in a quote-to-cash transaction may have to be transferred to other operational systems to fulfill the transaction. To achieve best results, data must be staged and controlled from start to finish and there must be a single system of record. Deciding on what application (or applications) to use to manage the process and where to locate the system of record physically and logically depends on a company’s specific circumstances.
Engineering quote-to-cash end to end from both process and data flow perspectives can speed its completion (thereby improving customer responsiveness), remove unnecessary manual steps (generating efficiencies) and reduce or eliminate errors at every step (resulting in better customer service and lower costs).
Another example that benefits from a data-driven end-to-end process is requisition-to-pay. It may seem counterintuitive, but accelerating the payment of invoices can improve a company’s bottom line. With interest rates in much of the developed world at historic lows, the greatest return on available cash is taking advantage of early payment discounts. Yet few companies take advantage of these. One important reason why they don’t is deficiencies in the data and technology needed to make early payment practical. Starting the automated process at the point of initial requisition gives the treasury function better visibility into the amounts and timing of future outlays, making cash forecasting more certain. Greater certainty about the corporation’s cash position lowers the amount of cash it needs to hold to meet payment obligations while maintaining an adequate operating liquidity buffer to allow for forecasting errors and unanticipated needs. Companies that have limited visibility will be cautious about making payments and must maintain a larger, more conservative buffer stock of cash. Using automated systems to speed the processing of invoices by eliminating delays in handoffs is only one element needed to make early payment discount feasible. Timely access to accurate data to support processing invoices is necessary, as is data needed by an analytical application that supports the treasury function to handle the complexities of managing cash effectively.
The importance of timely access to reliable data is often overlooked, but it can be the key ingredient to improving the execution of core business and finance department functions. Engineering data and data management into the design of technology-driven processes must not be an afterthought; it must be integral to the decisions about what software is used and how processes are to be performed. Our research shows that data issues plague companies, and the larger the company, the bigger the problem may be. Effective data management is essential to improve corporate performance. We advise companies to review their current processes and take steps to modernize and automate any that are a drag on performance.
Robert Kugel – SVP Research