When companies grow via M&A activity, it often involves absorbing disparate ERP applications, which, over time, can create significant inefficiencies and waste valuable resources. However, with an automation platform that has the ability to integrate with any ERP system, businesses can standardise their processes company-wide and simplify once-complex IT environments.
Esker’s Director of Sales and Business Development Dan Reeve sat down with the CIO of a global chemicals company to gain a c-suite perspective on automation’s value and harmonising effects on multi-ERP environments. Here’s what they had to say.
Dan:
As a CIO with so much experience, what is the value of automation with multiple ERPs?
CIO:
From our perspective, the biggest value is the ability to put in a standardised process across different systems that have different requirements. So, the elements of training, interchangeability with resources, the ability to consolidate shared services centers (SSCs) — all of that is probably the biggest benefit that we get out of it.
You could extend that to the acquisition side of the house as well. Are you looking for synergies? Are you looking for opportunities to put in your accounting practices in kind of one fell swoop as it relates to AP, without having to do a tremendous amount of integration? I think you get the synergy capture much faster with automation, at least from an AP perspective. Driving not only in the context of standardisation, but also the automation elements that Esker brings.
Dan:
When you say synergies, does that mean: “If we go and buy companies, we inherit more regions, more companies, etc., and we want to get them to follow the same process, use the same technology, have the ability to connect or have a system that will work with whatever they’re on today. And if you have plans to move them all to one ERP at one point, this [automation] is a faster way to do it and get the ball rolling”?
CIO:
Right. As much as you have processes that are reliant on physical locations — whether it be through paper-based invoices or your ability to even just process AP in general — this basically allows you to get away from the physical requirements of having people in specific locations, while being able to process more. Processing more with less people means you have an opportunity for savings and the ability to reassign people to do more strategic things than just AP.
Think of a company with an SSC model that acquires another company. That company is processing AP, and there’s no faster way to get things folded into your SSC from an AP standpoint than to do something like this [use a P2P automation solution]. It’s really about what your goal is. Are you wanting to reassign key resources to be more strategic? Are you looking to take out costs associated with consolidating back-office functions? From an acquisition perspective, those are the two opportunities.
Dan:
What about on the order-to-cash (O2C) side then? If you have multiple ERPs, could this be valuable there too?
CIO:
Yes. On the sales side, for sure. The reason why we would be interested in it, from a sales perspective, is because anytime you have multiple ERPs and are trying to automate, you’re primarily going to be focused on EDI. And the challenge of EDI is that your customers are not one-size-fits-all relative to what their capabilities, from an EDI perspective. Plus, EDI can kind of be tackled it two ways. You can tackle it in the context of direct integration relative to ERPs, and the more ERPs you have, the more complex that integration can become. Or you can spend a lot of money investing in some sort of middleware solution that allows you to do EDI as a standard engagement. But that all requires a lot of maintenance and expertise that many companies don’t have.
The biggest thing for us on the O2C side is the fact that in the past, automation typically comes in the form of doing EDI transactions, and not all customers — especially large ones — are capable of doing that. But if you have medium- to small-sized customers, they’re not going to spend time to invest in EDI solutions.
CIO:
That’s why the Esker solution is very interesting. You can effectively put it in as an automation technology and, at least initially, not really impact the customer’s behavior. A platform like Esker builds a foundation for being able to create tiers of customer service and your customer order entry process.
Dan:
How does the multi-ERP story apply to what you just said?
CIO:
Integration, from an EDI standpoint, in a multi-ERP scenario is going to be significantly more time intensive, costlier and require more resources. But with Esker, the integration is much simpler and allows you to automate much quicker. And the more complex your landscape, the more reuse is available relative to the different types of integrations that Esker offers with ERPs.
CIO:
The advantage is you have one pane of glass to do any kind of analysing, reporting and managing of processes. If you want to adjust how you operate as a company, doing that from one single system is much easier. It’s the same concept with any virtualisation technology. If you’re thinking about it from an infrastructure perspective, it’s basically the same idea — you’re building an abstract layer that allows you to operate at that level, as opposed to having to deal with all the technical details associated with all the ERPs.
Dan:
That’s a great point.
CIO:
That part is true relative to people, too. In the context of what you need to actually process sales orders in a multi-ERP scenario, companies typically group people based on their knowledge of how to do things within a certain technology (i.e. SAP, JD Edwards, etc.). When you abstract all of that and have a single platform that’s ERP agnostic, it gives you the ability to be more cross-functional and strategic with how you deploy resources, because you no longer need people that specialise in certain technology.
Dan:
I think that really sums up the point. Esker is providing a head-up display onto which the key pieces of information are put. It’s easier for me to see what’s going on in the business through a dashboard versus having to get my hands dirty and really get into ERP or Salesforce code.
CIO: Yeah. Companies that have multiple ERPs and multiple lines of business typically aren’t able to build an SSC for sales because of technology challenges and/or business rules that are embedded in those pieces of technology and ERPs. But once you put in something like Esker where everything looks and feels and acts the same, then you have the ability to do that kind of thing.
-Written by Taylor Bucher
