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Why digital planning tools are critical for enterprises

The global Enterprise Resource Planning (ERP) software market size will hit Sh7 trillion by 2026, catapulted by the effects of the pandemic. This is according to a new research which further states that ERP software systems, which are already core components of Industry 4.0, will become the driving force behind Industry 5.0.

The report by Market Research Future says lockdown and physical distancing mandates imposed to control the Covid-19 spread forced many organisations to digitise their business processes, including supply chain product management, sales, marketing, accounting and finance, and human resource.

“Covid-19 pandemic has positively impacted the ERP software market, fostering digitization and automation across the manufacturing sectors globally,” it notes.

While top priority for corporates and Small and Medium-sized Enterprises (SMEs) when purchasing an ERP software has been flexibility, data aggregation is becoming a more attractive feature, the report says.

To a large extent, most ERP solutions in previous decades were highly complex, had fixed workflow systems but most ERP vendors have now moved to deploy Artificial Intelligence algorithms to help companies make decisions faster, predict product life cycles and ultimately boost profitability.

The study reveals that ERPs are being implemented across SMEs to better manage their business operations while enhancing collaboration, productivity and simplifying compliance and risk management.

“ERPs are also being adopted to effectively plan and streamline data under one platform, regulating operating costs, improving decision-making and increasing sales,” the study says.

The ERP market size, it adds, is witnessing a constant uptick over the past few months, and also solution providers are increasing investments to foster research and development activities and help developers make digital-based recording solutions.

ERPs, usually designed and deployed to control the most critical and core business processes within an enterprise, from human resources, accounting, supply chain management, procurement, production planning and sales, have become a big asset for many businesses during the Covid-19 pandemic period.

Many SMEs that relied on basic software to run processes realised that operations involve critical data points that come in large volumes, prompting the dire need to automate every process to achieve accuracy, production speed and consumer satisfaction in business operations.

In what he calls a smart factory, Doug Hunter, customer and ecosystem enablement manager at ERP software company Syspro told Digital Business that manufacturers not digitising production by collecting data from machines and other devices automatically could soon be running obsolete processes that are costly.

“ERP has been reinforced as a must for manufacturers. It is the basis on which they streamline processes through automation, using and providing accurate real-time information, and reducing costs,” he says.

Citing the example of the Syspro Manufacturing Operation Management (MOM) module that enhances production scheduling, he notes that companies need to directly capture visibility of progress to enable faster agility while feeding operational and labour efficiencies.

And as the Internet of Things (IoT) comes to reality with the launch of 5G in Kenya, many manufacturers may find it more relevant to use the technology to help in boosting production volumes.

“IoT gathers real-time data from a range of smart devices across supply chains covering production counts, quality, safety, product and process innovation and more. With monitoring technology IoT can track machines, equipment and device performance before failure,” says Mr Hunter.

The report further reveals that cloud computing, cloud-based applications, and software as a service (SaaS) or on-demand are key market trends that are positively impacting the ERP market size.

“These advantages are estimated to fuel demand for cloud and mobile apps in the years to come. Cloud computing enables enterprises to store and access data via the Internet with scalability, agility, reliability, and flexibility. Simultaneously, service models of cloud computing, such as SaaS or software on-demand, reduce the company's IT infrastructure costs,” the survey explains.

The proliferation of mobile devices in the working culture, the research found out, is encouraging businesses to invest in cloud-based connected infrastructure, allowing access to information anytime and anywhere.

In his view, chief technology officer at Unit4 Claus Jaspen, the balance between selling software and services will change for vendors, at least those selling vertical solutions and templated implementation models.

“Overall, ERP is set to evolve and change to fit the needs of users and their business goals. Tech leaders should keep an eye out for these trends as we continue to experience seismic shifts in the market,” he says.

For manufacturers, Mr Hunter notes that they need the latest release of ERP software to monitor costs across the business so issues can be identified as they occur, such as variations between expected and actual raw material and production costs, obsolete, slow-moving, excessive inventories, product defects and scrap.

“The digitisation of design, production, delivery, sales and services, as well as integrating partners and other systems that are part of the supply chain, will improve collaboration, planning and execution across an extended value chain,” he says.

He adds that an e-commerce portal should integrate to ERP systems with inventory levels updated in real-time, and show inventory information by warehouse location for more delivery precision.

Calling on African enterprises to embrace the use of ERPs and vendors to create additional layers of cyber security, Mr Hunter predicts that most technology jobs and opportunities will be in Africa in coming decades.

“Africa will generate the highest GDP in future. There will be more tech jobs in manufacturing, that’s why African youth should be skilled in machine learning and all forms of AI.”