Why Every Supply Chain Function from Procurement to Accounts Payable Will Perform Better if You Have an ERP Orchestration Engine (i.e. true Supply Chain Orchestration Platform)
ERPs claim to provide process orchestration. The problem is, if you are using more than one ERP to manage your many business processes, then you end up with inefficient processes due to the data silos created by each system. And, while necessary to managing operations, ERPs only complicate supplier management. They also make it nearly impossible for internal functions and trading partners to collaborate at the level your organization demands.
This is why supply chain orchestration platforms that boast ERP orchestration capabilities are now highly advocated by industry analysts.
While many software-based supply chain management (SCM) platforms will be marketed as “orchestration” platforms, only those powered by a workflow and messaging engine are proven capable of driving supply chains away from the chaos of multi-ERP supply chain management, as my colleague Steve Rice discussed in his last blog post. More specifically, only those SCM platforms that boast an “ERP orchestration engine” are capable of resolving the root issue of your ongoing business challenges, including those discussed here. That is because ERP orchestration is essential to creating a direct-connect IT architecture, no matter how many systems or suppliers you’re trying to sync up.
How is an “ERP Orchestration” Platform Different from ERP-Delivered Process Orchestration? And, Why Should You Care?
Unlike a single ERP’s process orchestration capabilities, ERP-agnostic orchestration platforms sit in the middle of your supply chain and serve as the central command and control center for all of your data transmissions, trading partner communications and workflow transactions – no matter the system of origin or record. As such, you are able to extract more value from all existing ERPs, along with all other supplier management systems dialed in via the orchestration platform.
More importantly, ERP orchestration platforms provide the perfect, scalable foundation for an end-to-end digital supply chain (DSC).
This alone justifies the investment considering that “an improved enterprise DSC can lead to a 20% reduction of procurement costs, a 50% reduction in supply chain costs, and an increase in revenue of 10%.”
However, these aren’t the only benefits that “can be gained by the use of a DSC to capture and maximize utilization of real-time data from various sources.” As noted by the Center for Global Enterprise, an end-to-end DSC is the key to “enabling demand management, simulation, sensing and shaping to optimize supply chain performance while minimizing risk.”
That being said, without an ERP/supply chain orchestration engine driving your DSC, it’s going to be nearly impossible to leverage the competitive advantages of global supply chain collaboration and 365-degree supply chain visibility.
In other words, you don’t need a supply chain orchestration platform that replaces your ERP. You need one that enhances the ERP(s), connects data silos and ultimately creates a true DSC. Look for a platform that enables you to:
- Connect all of your business systems internally and then link that “network” to all of the business systems used by your varying levels of trading partners. That’s the best way to completely “capture and maximize utilization of real-time data from various sources.” This type of system unification is also the only way to achieve a completely unified, and collaborative, supplier network.
- Coordinate all supply chain transactions in one place. Ideally, it should automate all workflows and streamline the data processing flow between existing workflow management systems. These cross-functional data “handoffs” will provide real-time visibility into performance levels and allow for the automatic flagging of emerging risks. Stakeholders will then be empowered to take immediate action to avert delays and disruptions, or quickly address data mistakes.
- Scale your (now unified) data systems and automated workflows as your business grows. While automation has been a part of the supply chain for a number of years, implementing it successfully in today’s increasingly complex environments requires a new approach to workflow and workflow intelligence. While you should not have to re-engineer existing business processes, you will need to implement agile and scalable workflow automation that extends to global sourcing and distribution channels. This is the fastest way to elicit greater operational and competitive advantage from your supply chain operations as market and, therefore business, demands evolve.
The OneSCM Supply Chain Orchestration Platform is a great place to start. See why so many industry analysts are calling this one “workflow and messaging engine” the best way for organizations to maximize their ERP investments and power their digital supply chain into the future.