The birth of the digital operations platform (DOP)
The smart, modern ERP system’s origin dates back more than
100 years, when it began as economic order quantity (EOQ),
a decision tool for optimizing inventory costs. Over time,
additional functionality was added, like finance and CRM,
and the individual components were integrated into a single
overarching, albeit difficult to use, system.
A simplified definition of ERP is a transaction engine that
fashion brands use to manage day-to-day business activities,
such as procurement, warehouse and inventory management,
manufacturing, sales, and finance. ERP systems can also
introduce automation that replaces manual tasks. The goal of
an ERP system is to improve business productivity and agility.
As these business systems evolved, they met the needs of
their times, but their functionality was directly limited by the
available technology. Today’s smart, modern ERP systems
might be better called digital operations platforms (DOP)
to reflect their agile, artificial intelligence-based, and
experience-driven nature, as well as the critical role they play
in cloud-based digital businesses.
Some key functionality that smart, modern ERP (a.k.a. DOP)
systems bring to organizations include:
-
Support for complete industry and business processes - Business strategy and requirements are considered in context
of a larger set of capabilities and technology needed to address
complete fashion business processes.
- API-based integration for complex workflows - Native support for services-based APIs enables flexible interapplication
collaboration to support complex workflows
and in-context analytics.
- Complex application environments - Flexibility to handle
complex, hybrid technical environments while applications
and data move from legacy and on-premises software to cloud.
- Collaboration with suppliers, partners and customer
ecosystems - Ready to work beyond the enterprise and support
the full industry technology ecosystem by connecting with
customer, supplier, and partner applications.
- Future-proofed for extension and scalability - Extensibility,
scalability, and performance are part of the ERP’s core design
principles to maximize business agility. This include support
for user interaction modalities beyond the traditional UX.
- Tailored to industry and business specific needs - The ability
to easily integrate the ERP system with complementary
applications that address specific fashion operational needs.
- Connected data for analytics, machine learning, and AI - Connect data across application silos for enterprise-wide
analytics, on-demand recommendations, and pathway to AI.
- Security and risk management - Tools for standards-based
security, risk and fail-over management, attack prevention,
and processes for continuous security advancement.
Benefits of a smart, modern ERP system
Implementing or upgrading to a smart, modern ERP built
for Fashion can cause significant disruption to the business,
causing the organization to lose focus, or even “break”
business processes that the company looked upon as core
to their success. As scary as this may seem, the productivity
gains and business improvements that your business will miss
out on far outweigh the costs and risks.
Modernization has a strategic impact on your fashion
brand. Without access to a smart, modern ERP system,
it can be difficult or even impossible to support new
business models and benefit from the improvements
in key performance indicators (KPIs) that come with
a successful ERP implementation.
Some of the major benefits of a smart, modern ERP
system include:
Ease of use
You can’t achieve return on investment (ROI)
if your team members can’t use your ERP system. Updated
systems are more intuitive, user friendly, encouraging
employees to seek out data and integrate it into the
decision-making process.
More informed business decisions
Enterprise analytics
enable fashion brands to connect data across business silos
and drill down on overall results and KPIs to functional
contributors. With modern ERP systems, businesses can grow
the “analytics mindset” within the organization to increase
data-driven decision-making and increase operational
effectiveness. By aligning enterprise KPIs with department
objectives, teams and individuals have a clearer picture of
how their priorities impact overall business performance.
ROI is always the key metric for business decision makers, and
modern ERP systems help teams communicate more clearly
with executive stakeholders through business analytics,
scenario planning, and financial impact analysis.
By understanding the drivers of current financial outcomes
and then using tools to model future outcomes, teams not only
benefit from greater confidence in their decisions, but also get
increased support from executives that know they’re investing
company resources intelligently.
Ability to attract and retain talent
A major challenge for
manufacturers and distributors today is the retirement of
employees with years of “tribal” knowledge and expertise
combined with a new generation of workers that are less
inclined to embark on manufacturing and distribution careers.
Without these resources, your company can’t exist. The new
generation of digital natives demand technology that is user-friendly
and supports how they like to work. This means
software that mirrors the look and feel of applications they use
in their day-to-day lives and supports immediate access to data
and collaboration. For many fashion brands, modern ERP
systems have been a key differentiator when targeting this
generation of workers.
Breaking down business silos to increase collaboration
By extending ERP capabilities beyond operations with a modern
platform, fashion brands can increase collaboration across
functional areas for improved workflows and increased
productivity. As teams leverage improved communications and
cross functional data, they can reduce cycle times and increase
accuracy. Native social tools within ERP systems allow teams to
share rich information across regions and time zones using
devices that support work wherever and whenever needed.
ERP systems should support “outside-in” requirements
for exchanging information with suppliers, partners,
and customers.
Networked support for processes such as supply chain
management, product lifecycle management, and order
management help to reduce cycle times, increase accuracy,
and improve overall business flexibility. Analytics for in-context
decisions can factor in third-party data, such as inventory levels,
lead times, and demand forecasts for improved planning,
scheduling, and cost and risk management.
Improvement of key performance metrics
Organizations on
the latest ERP versions see more significant benefits in metrics
such as complete and on-time delivery, inventory turns, internal
schedule compliance, and reductions in operational
costs. These performance improvements have a direct impact
on the bottom line, which may even pay for the ERP system.
Utilize emerging technology
Analytics, mobility, cloud,
partner networks, and the internet of things (IoT) are becoming
table stakes in modern fashion manufacturing environments.
For example, using IoT and analytics together (such as applying
analytics to inexpensive sensors on machinery) can help to
support predictive maintenance and enable bigger profits
in new service models. Outdated ERP systems can’t support
this innovation.
Data-driven mindset across the business
Saying that ERP systems help fashion brands manage
day-to-day business activities from cotton to consumer is not
only an oversimplification, but it doesn’t address the breadth
and reach of modern ERP systems. Not only do modern ERP
systems touch and connect virtually every operational corner
of a business, they also help foster a data-driven mindset across
the business. In doing so, they empower key stakeholders to
leverage this information for critical decision-making that can
grow the business and increase the bottom line.