ERP Solutions and the Changing Role of the CIO

1. ERP Solutions and the changing role
of the CIO – Roadmap to business
innovation leadership
ERP Solutions
of the CIO
This e-book explains how new Enterprise Resource Planning software solutions (ERP) support
the changing role of CIOs today and analyses the most important current ERP trends.

2. Table of contents
Introduction: The changing role of the CIO
I. Investing in IT
II. ERP solution benefits
III. Top Trends CIOs should consider
IV. Which ERP forwhich organisation?
Conclusion

3. The changing role of the CIO
Introduction
It is difficult to find another role in today’s business world
that has changed as rapidly as that of the chief information
officer (CIO). Only a few years ago the heads of information
technology departments were mainly there to make sure the
infrastructure a company needs to perform its ‘business as
usual’ was in place and functional. But with the ever-growing
importance of technology-driven innovation their role has
changed fundamentally.
Not only has it become more diverse and challenging, CIOs
now need to cover a whole lot more ground and stay on
top of a rapidly changing field defined by quick shifts and
advances. Above all, they are suddenly shouldering a much
higher amount of responsibility.
The nature of the CIO position has changed substantially with
rapid and successive developments altering the very fabric of
the business world, making it the responsibility of the CIO to
incorporate these new methodologies and applications into
business.
This fundamental shift in the role of the CIO reflects the deep
changes business environments undergo on many different
levels. ‘The visual, social, virtual, and mobile transformations
that are already happening are creating a new golden era
of technology-enabled innovation, and the CIO needs to
be leading the charge,’ says Daniel Burrus, CEO of Burrus
Research(1)
.
The single most important factor in CIO personnel decisions
is now what new, innovative solutions they can bring to
the company. In stark contrast to the old image of the CIO
as a dry IT-guy, s/he is now supposed to ‘wow’ the board
with amazing schemes to facilitate company growth and
performance.
Not all CIOs are up for this challenge. Recent surveys
revealed that more than half of the CIOs participating in
Gartner’s large-scale report Taming the Digital Dragon: The
2014 CIO Agenda feel that technological change is happening
too quickly for them to keep abreast.
The requirement to deliver both basic IT for an organisation
while preparing it for new issues around big data, the Internet
of Things, cloud computing and up-skilling workforces, will
require a “bimodal” approach to IT.
‘Most organisations will require a two-speed approach’,
says Gartner Fellow Dave Aron. ‘The first will remain as
conventional IT with conventional vendor and approaches to
things like risk and governance; and the second mode will be
non-linear IT, with uncertainty and the need for innovation,
collaboration and new skills(2)
.’’
What is becoming clear is that the mounting challenges at
the crossroads between technology and business innovation
are leaving CIOs in need of the right tools to enable positive
change for their companies.
(1)
http://www.huffingtonpost.com/daniel-burrus/todays-cio-the-chief-inno_b_3989501.html
(2)
http://www.v3.co.uk/v3-uk/news/2322642/cios-must-prepare-for-two-tier-it-management-as-third-era-of-computing-dawns

4. I. Investing in IT
The opportunities IT-solutions offer for any business are
virtually endless – and decision makers know this. According
to a Gartner’s study, top business priorities shifted in
recent years from cost saving, which was prevalent during
and shortly after the global financial crisis, to growth and
profitability. For no less than 41 percent of all companies
growth is now one of the top-3 priorities, and IT solutions
play a pivotal role in making this happen(3)
.
The figures are overwhelming: Half of all companies
participating in the study plan to increase their IT spending
in the following year, and 52 percent already have a digital
strategy in place that is aligned with the company’s overall
goals(4)
. ’This requires CIOs to prepare for the first
significant wave of IT investment in more than five years’,
Gartner’s concludes.
The willingness to invest heavily in new IT solutions is a
direct consequence of the recognition that new technologies
can positively affect any internal department that needs
improvement. ‘Social, mobile, cloud and information continue
to drive change and create new opportunities, creating
demand for advanced programmable infrastructure that can
execute at Web-scale’, says David Cearly of Gartner(5)
.
Another factor is the heightened focus on business analytics.
The most significant keyword in this respect remains Big
Data, which is widely acknowledged to hold tremendous
potential but relies entirely on IT innovations that were
unavailable or impractical only a few years ago. Considering
all this, it is no surprise that investing in IT is very much on
top of many a company’s agenda.
Having said that, of course cost effectiveness also
remains a business priority, and often CEOs feel as if their
IT departments could do more to keep the costs down.
More than half of the companies cited in Gartner’s report
believe that the most significant way CIOs can boost their
contribution would be for them to ‘run IT like a business’(6)
,
prioritising the streamlining of processes and cost-
effectiveness.
How can a CIO bridge the gap between the demand for
paradigm-changing innovation and the pressure for cost-
effectiveness? One way forward lies in the implementation
of enhanced Enterprise Resource Planning (ERP) software
solutions, which manage work-flows and information across
locations in one unified system.
(3)
Gartner, CEO and Senior Executive Survey 2013: CFO Focus Turns to Growth, p. 3
(4)
- ibid.
(5)
http://www.gartner.com/newsroom/id/2603623
(6)
Gartner, CEO and Senior Executive Survey 2013: CFO Focus Turns to Growth, p. 1

5. II. ERP solution benefits
As detailed above, a sound IT strategy is the driver behind
most recent paradigm shifts in business, be it information
management through the cloud and remote working, or
performance and resource management across various
locations. Most CIOs who face the challenge of leading
business innovation today rely on ERP systems to achieve
their goals.
In short, an ERP solution is a business application that
integrates all functions individual departments operate
with into a single software application. The usage of only
one platform greatly facilitates a wide variety of processes.
While ERP systems do not automatically generate
innovations, the way they improve the very structure of
information opens up a number of opportunities.
Here is an overview of the most important
benefits an ERP system offers:
A single view of your business
The use of a single, unified system reduces the manpower
wasted on manually tracking down vital information across
the company. Information is to be found in one central spot
rather than in dozens of disparate departmental systems.
This allows for the gathering of data in real time and greatly
helps in reducing so-called ‘information silos’ that obstruct
full inter-departmental co-operation.
Streamlining of processes
Similarly, reporting systems used to evaluate and process
information of all kinds are streamlined, preventing different
departments from ‘speaking different languages’ when
communicating. This ensures the smooth completion of
standardised processes and fosters inter-departmental
synergies.
Transparency
With all company data stored on the same system,
privileged departmental information is a thing of the past.
This is especially helpful for senior management personnel.
They need comprehensive and intelligible overviews but
without an ERP solution they have to rely on disparate
information prepared for them by others. The complete
visibility ERP software provides ensures that they keep the
macro perspective in sight easily.
Short- and long-term ROI
Modern, enhanced ERP solutions can greatly improve
a company’s performance from day one. Right after
installation, re-structured and streamlined information
allows for new insights into the way a business works
from the inside. The accumulated savings in invested
project hours, and the new clarity of view that can uncover
previously hidden cases of resource wastage, make for a
very strong return on investment immediately.
At the same time, the performance of ERP solutions
keeps improving the more relevant data it has access to.
A company that continuously feeds its ERP system new
information will see that the full potential of enhanced
resource planning is practically limitless.
Ideal for international companies
Resource planning is particularly challenging for global
companies with offices in several countries. The different
business cultures and legislation frameworks prevalent in
each country can lead to friction losses that negatively affect
the whole. A global ERP solution that enables companies
to have global access to production, inventory, purchase,
sales, and order information across the business and
to automate complex processes between sites leads to
major improvements of company processes and increases
transparency. Global forecasting possibilities, financial
aggregation, and international invoicing as well as the
support of international bank formats are also crucial for the
management of a global company.
Because ERP solutions can easily be implemented on
any base structure, they allow for the synchronisation of
business data across various countries and continents.
No matter whether offices work in Portuguese or Polish or
whether transactions are made in euros or yen, the data they
will be working with looks the same anywhere.
‘An ERP solution allows us to integrate information across
countries, for example between our main office in Portugal
and our production in Poland. With an ERP solution all
systems are always updated, and with all the information
centralised we can react more quickly to the customer’, says
Tiago Pinho, Chief Technology Officer at ERTGRUPO(7)
.
(7)
Sage customer testimonial, www.sageerpx3.com

6. Effective 2-Tier Strategies
The implementation of an ERP system enables a company
to run an efficient 2-tier approach. It allows departments to
focus on their core area of expertise - whether a region or
industry segment - while still benefitting from being part of
a larger organisation. The data and qualitative information
used to frame decision making is more relevant to the daily
operations of businesses in practice.
Best solution for mobile technologies
Modern ERP systems are specifically designed to take
full advantage of the ‘digital revolution’. Recognising that
more and more businesses rely on the hyper-versatile
communication structure that mobile devices made
possible, ERP solutions can be accessed from nearly any
device fit to do so. Be it a smartphone, tablet computer or
smartbook, employees can update the system with their
latest information as and when they care to.
Easy to synchronise with 3rd party solutions
Another advantage of ERP systems is that they can connect
easily to software platforms used by external applications.
The collaboration with supply chain partners and customer
portals can be greatly facilitated by directly linking to their
software interface, extending visibility and control for both
sides.
Single software package for the whole
company
With company-wide ERP solutions the same software
package is used across all departments. This means
that no expensive and troublesome updates of individual
software systems will be necessary. The purchasing and
maintenance of software systems is centralised, freeing
up resources in the individual departments and avoiding
incompatibility problems across different branches.
Suits all sizes of businesses
Since an ERP solution is a software system based on
modules, it is highly flexible and can be adjusted to the
needs and requirements of any company, no matter its
size. Companies that rely on highly complex processes
and structures benefit most when a wide variety of
modules are implemented, whereas businesses using a
more straightforward model can use the core benefits of
ERP systems with a slimmer solution.
Security
The usage of ERP systems can substantially increase
security across the whole company because the same
protocols can be applied onto the entire system in only
one step. There is no more need for various security
solutions tailored to individual department requires.
In addition, security breaches from the user side also
diminish since each and every transaction made on the
system can be easily tracked, increasing accountability
and ease of control.

7. III Top Trends CIOs should consider
ERP solutions and how they are used undergo constant
changes. CIOs need to be up to date with the latest trends
that will dominate user practice and impact on future
planning.
Cloud-based ERP
Arguably the most talked about change in ERP technology
in recent years, the advent of the Cloud means significant
changes to the way an ERP solution can contribute to a
company’s success. The ability to use applications straight
from the web without resorting to static, on-premise
software is less costly and more speedy than traditional
systems. The time savings in installing cloud-based
systems, in comparison to on-premise ones, are enormous
and can literally save years. It is little wonder therefore that
customer demand for cloud solutions has been increasing
steadily over the past years.
‘The convergence of trends in cloud computing, embedded
analytics, and commerce will drive new competitive
dynamics, offering new applications and functionality to
customers and end users while also driving demand for
related security technology and services,’ says Christine
Dover of Enterprise Applications and Digital Commerce(8)
.
Interestingly, the rise of Cloud-based ERP also means that
competition among ERP suppliers is increasing. Cloud-
based solutions can be developed and supported much
more easily than on-premise systems, which encourages
‘small’ players to take a stab at the market.
Mobile ERP
Going hand in hand with the Cloud is the further
development of mobile ERP and BYOD (bring your own
device) schemes. As briefly mentioned in section II, the
ubiquity of handheld and portable devices of all kinds
means that nowadays business is done in various places, all
the time. The direct connection to the main system via such
devices is an invaluable asset.
‘Gone are the days of accessing ERP systems from
a single computer – now employees use phones and
tablets just as much - if not more - than they do a
computer or laptop’, says Eric Kimberling, managing
partner at Panorama Consulting Solutions. ‘Vendors are
finally beginning to provide compelling and secure ways
for employees to accomplish this, so look for increased
adoption of mobile solutions(9)
’.
The inclusion of BYOD can also add to the cost-
effectiveness of ERP solutions. Employees can use their
familiar, private devices on top of company-owned ones,
reducing the need for IT support and diversifying usage.
Usability
Looking beyond these three top trends in the industry, many
believe that usability will quickly become the real overriding
issue with ERP software. Experts say that Cloud-based ERP
and mobile ERP could have developed much faster, had it
not been for relatively poor user friendliness in these areas.
‘Vendors realise they must make investments to reduce the
complexity of ERP and make it more usable for end users’,
says Rebecca Wettemann of Nucleus Research. ‘It’s not just
doing mobile, but making mobile more intuitive. It’s not just
adding new features but really thinking about making the
UI more user friendly(10)
’. When adapting to new software
solutions, businesses tend to behave as consumers first,
expecting intuitive design. New ways to provide such a
beneficial user experience will be a major trend defining ERP
development in the next years.
(8)
http://www.idc.com/getdoc.jsp?containerId=241279
(9)
http://www.enterpriseappstoday.com/erp/top-8-erp-trends-for-2014.html
(10)
http://www.enterpriseappstoday.com/erp/top-erp-trend-usability-says-nucleus-research.html

8. IV Which ERP for which organisation?
When choosing the right ERP system for their company,
CIOs need to be treading carefully. Due to the popularity of
ERP solutions, there is now a myriad of service providers on
the market, promising any number of things to extend their
client base. A judicious decision for the right system and
the right ERP partner is crucial for the success of an ERP
implementation.
The six most important criteria when assessing the best
ERP solution are the following:
Future Proof
It is vital to understand that an ERP system fulfills its
potential best when it is thought of as a tool to facilitate the
positive long-term development of your business. Before
deciding on which system or which modules to get you
need to be aware of where you want your business to be in
five or even ten years. The further ahead you plan now, the
more adapted your ERP solution once you reach the next
milestone.
Tailored to Your Business
Each business is different and each company has its own
priorities. When dealing with a potential ERP supplier, it is
important to make sure your specific needs and demands
are met all the way. From the initial road map to the system
settings and tools that will ultimately be used – each step
needs to be perfectly tailored for the client’s needs.
Solid Implementation
It is impossible to spend too much effort on the pitch-
perfect implementation of your ERP system. A smooth and
solid start to the ERP solution usage makes sure everyone
is on board with the structural changes and guarantees the
best results from day one. The implementation needs to
be both quick and thorough, and has to include employee
training as well as a forward-thinking deployment strategy
for a successful transition. Relying on standardised
implementation models that have been tried and
tested many times over can help speed up the process
significantly.
Integration
The choice of the right ERP solution depends to a large
degree on the systems it is supposed to replace. In nearly
every case there are parts of the pre-existing setup that can
be easily integrated into the new one. With the right solution
internal data can be transferred cleanly from one platform to
the other.
Experienced partner
While ERP systems are easy to use once everything is
running smoothly, without an experienced partner who
can deliver expert consulting services and support there
is a risk of running into trouble, especially during periods
of adjustment. It is absolutely crucial that your support
partner truly understands your industry – not everything that
works for a car part supplier will matter to a bookseller. It
is also imperative that your ERP partner has a proven track
record of successful projects and can be expected to still
be in business many years down the line. Considering how
fast the field of ERP is moving, this latter point is not to be
underestimated.
ROI
As mentioned above, in order to justify the implementation
of an ERP solution, CIOs are reliant on a quick return
on investment. Few companies will be willing to wait for
years until the new software platform makes back the
money it cost to install; it is therefore vital to ensure that
the ERP system of choice is functionally rich, efficient,
and user-friendly enough to have an immediate impact
on daily business. What helps is that a savvy ERP setup
usually reduces the cost of IT purchases and maintenance
sufficiently to offset other costs right away.

9. Conclusion
The times when a company’s IT system was merely a tool
to conduct the business activity, which functions just fine on
its own are gone forever. Today the information technology
a business uses directly reflects its strategy and vision.
This is why ERP systems are now the most customary
solution favoured by CIOs in all business segments. In an
environment where the efficient management of information
decides over success or failure, a well-implemented ERP
solution allows a company to grow and prosper according
to its potential.
Of course, it is not the ERP system in itself that provides
innovation. It is the possibilities it creates through the
delivery of better business intelligence that enables better
decisions. It is up to the CIOs to become the leaders of
innovation most companies now require them to be with the
help of ERP software. While the possibilities are endless,
the changes and constant updates ERP systems undergo
require CIOs to stay truly engaged with the opportunities
that keep occurring.
‘The inventive CIO is reborn’, says Gartner fellow Mark
Raskino. ‘The inventive CIO will strive to develop unique
new technology capabilities for competitive advantage,
using a powerful and creative internal technology resource
base. If your company wants to remain a leader in your
industry, information and technology must become a core
competency again(11)
’.
(11)
http://blogs.gartner.com/mark_raskino/2013/10/24/the-return-of-strategically-inventive-it-leadership-at-last/

10. Pour plus d’information :
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