Enterprise ERP Savings

Enterprise organizations around the world are seeking to reduce their IT spend.  For far too long there has been little accountability between the high cost of technology and the specific business benefits and value it brings to the organization.  According to Aberdeen Group’s Measuring the ROI of ERP in SMB report, best in class companies are now looking to justify the cost of technology, placing additional burden on IT departments not accustomed to business case validation.

One critical area getting a lot of attention lately are the subsidiaries of large companies who just don’t need the overhead associated with tier one ERP systems, such as SAP and Oracle, which are customarily forced upon them.  While these systems do provide the necessary business functionality, they also bring a high price tag, unnecessary technology, and extremely high annual maintenance and support fees that take away precious capital.

ERP Functionality that You Need – Nothing More

Subsidiaries in the food industry are often highly diverse in their operations, ranging from growers and processors to distribution and logistics.  Traditionally it is believed that only tier one systems could provide that broad level of functionality across all operations, and still provide efficiencies to the corporate office.

That’s simply not true anymore.  Technology has improved to the point where mid-market ERP systems, such as Microsoft Dynamics provide complete solutions for a diverse set of needs and offer highly verticalized industry specific functionality, such as bcFood and bcMobile – without the overhead and support that tier one systems require.

This does not mean they don’t possess the necessary technology, however.   Both bcFood and Dynamics utilize Microsoft SQL Server as the backend, which is often running at the corporate level in some fashion.  Microsoft SQL Server has evolved to support thousands of users and very large databases without affecting performance.  In addition, the solution offers other leading technologies such as web services, cloud deployments, and management reporting at a price point far below their high-end competitors – because they have to.  Given today’s competitive landscape, mid-market companies demand the same technological benefits but simply can’t afford to pay as much for it.

Hub-and-Spoke

Given this situation, many corporations are now implementing what is known as a “hub-and-spoke” model, where the corporate “hub” implements a tier one solution, while the diverse subsidiary “spokes” standardize on one of the horizontally positioned mid-market ERP systems, such as Microsoft Dynamics, that offer a wide variety of vertical solutions to meet the exact needs of each location.

This architecture provides multiple benefits. 

  1. The corporate office benefits from a tier one system which provides the necessary enterprise-level financial analytic tools and features.
  2. Each subsidiary benefits by having the appropriate technology and functionality to meet their specific business requirements exactly, even if they are dramatically different than their sister organizations.
  3. Corporate IT benefits by only having to integrate one application.  In all but a few scenarios, the financial information each subsidiary reports to the corporate office is the same – or very similar. 
  4. Therefore, IT only has to build and maintain a few integration points and it benefits from only having to learn and work with one additional system.
  5. Sister companies who rely on information from each other have choices too, since they are all working from the same ERP platform.  Hooks can easily be built to share data, web services can be utilized, or they might even consider a centralized system.
  6. Subsidiaries also benefit by having the capability to enhance the mid-market ERP solution if the business case supports it.  Mid-market applications offer development tools and environments at a price far below those of the tier one solution.  Developing a competitive edge solution that seamlessly integrates with the ERP system can greatly affect a subsidiary’s operations and profitability.  These development environments are often similar to common toolsets so the expertise is easy to find, and competitive in price.
  7. Most importantly, subsidiary companies no longer have to suffer with the inefficient overhead and high costs associated with tier one applications, which builds confidence and higher adoption rates that benefits the entire organization.

Read Microsoft’s business white paper on how Microsoft Dynamics can help with common integration scenarios that parent companies often face with their subsidiaries or divisions.

bcFood, Microsoft Dynamics, and Beck Consulting

Microsoft Dynamics and bcFood may be the ideal industry solution for your food industry for your organization. As an enterprise package it holds software functionality and solutions for all business units in the organization, including but not limited to processors, manufacturers, brokers and distributors.

Conclusion

bcFood benefits from the inherit flexibility that Microsoft Dynamics brings.

All units of the organization will have different needs and requirements to some extent. As the organization change, new businesses are acquired and new ventures are approached, flexibility of the software will be critical to tackle these challenges. Being a slave to a legacy platform that forces the company into obscure process flows is not acceptable; this will lead to the demise of the software and the weaken the competiveness of the organization as a whole. Microsoft Dynamics also provides the horizontal solution for your non-food related companies, and Beck Consulting Group provides expertise in both food and non-food industries.

When selecting and implementing new ERP software utilizing today’s technology there should be no acceptance of anything less than a software solution that can be made to fit your organization as a glove. Anything less will result in your company not being able to compete or change effectively to counter their competition that do have access to highly flexible software solutions which are easily tailored to their exact needs.

Microsoft Dynamics and bcFood is a standard solution, with effective integration tools, and enough flexibility to meet the varying needs of different business units. To learn more about how bcFood and Microsoft Dynamics will benefit your Hub-and-Spoke scenario, contact us today!