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International Journal of Mechanical Engineering and Technology (IJMET) Volume 9, Issue 5, May 2018, pp. 733–741, Article ID: IJMET_09_05_081 Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=9&IType=5 ISSN Print: 0976-6340 and ISSN Online: 0976-6359 © IAEME Publication

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TECHNOLOGICAL INNOVATION AND INTEGRATION OF ENTERPRISE APPLICATIONS (EA) FOR ACHIEVING OPERATIONAL EXCELLENCE: AN EMPIRICAL ANALYSIS OF TRENDS IN ERP SYSTEMS Srikanta Charana Das Associate Professor, School of Management, KIIT University, Bhubaneswar, Orissa, India Jayant Kumar Panigrahi Visiting Professor and Director, ICER, New Delhi, India Sandeep Kumar Mallik Research Scholar, School of Management, KIIT University, Bhubaneswar, Orissa, India ABSTRACT The Business environment is changing very fast. Competition has come up to such a level that the organizations are continuously improving business processes to deal with it. On the other hand, technological disruption is changing the way business is being done. An enterprise application (EA) is a large software system platform designed to operate in a corporate environment. Advancements in technologies and business processes have put pressure on ERP vendors to upgrade their products to make the way for fully digital and integrated next-generation enterprise. The aim of this paper is to study the recent developments in ERP systems, with respect to technology adoption, integration of different applications with ERP and find out future research areas. This paper also addresses the issues and future trends of the ERP System Life Cycle (SLC) into phases. Keywords: Enterprise Application, Operational Excellence, EA, ERP systems, IT Landscape Cite this Article: Srikanta Charana Das, Jayant Kumar Panigrahi and Sandeep Kumar Mallik, Technological Innovation and Integration of Enterprise Applications (EA) for Achieving Operational Excellence: an Empirical Analysis of Trends in ERP Systems, International Journal of Mechanical Engineering and Technology, 9(5), 2018, pp. 733–741. http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=9&IType=5

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Technological Innovation and Integration of Enterprise Applications (EA) for Achieving Operational Excellence: an Empirical Analysis of Trends in ERP Systems

1. INTRODUCTION Every organization has to deal with four essential data streams; information flow, cash flow, commodities flow and logistics activities. The organization needs to integrate these four basic flows to get compact business processes eliminating data silos. The business must satisfy the needs of all of its stakeholders, both internal and external. Hence, operations of an organization are not confined to the boundary of the particular organization, the operations spread much deeper outside the boundary as well. Many systems and applications are available in the market supporting various functions of the organization. ERP is seen as the most critical business application among those as it covers a wide range of requirement. Other specialized applications catering to specific business needs are also available in the market. A tight integration between all the applications used by an organization is very much essential to building an integrated organization that can help in maximizing the business values.

2. RECENT ENTERPRISE APPLICATION LANDSCAPE Today‟s organizations have the option to choose from a vast pool of applications. Example of the applications with some of the product vendors are mentioned in the below table: Application ERP (Enterprise Resource Planning) CRM (Customer Relationship Management) HCM (Human Capital Management) Workforce Management Talent Management Supply Chain Control Tower Inventory Optimization ECM (Enterprise Content Management) Analytics Corporate Performance Management Marketing Automation Sourcing WMS (Warehouse Management) Advance Planning and Scheduling EAM (Enterprise Assets Management)

Products SAP, Oracle, Microsoft, Infor, Deltek, Syspro Salesforce, Pegasystems, Infor CRM, Oracle CX, Microsoft Dynamics 365, Sugar CRM SAP Success Factors, Oracle HCM Cloud, Sum Total Systems, Workday, Ceridian Ceridian, Infor, Kronos, Sum Total Systems, ADP Cornerstone, SAP, Oracle, Infor, Ceridian, Talentsoft, Silkroad Kinaxis, JDA, SAP, One Network, E2open Logility, Kinaxis, SAP, Manhattan Associates, JDA, Gain System, Tools Group, E2open Box, M-Files, Open Text, Hyland, Microsoft, LaserFiche Qlik, Salesforce, Microsoft, Sisense, SAS, Tableau IBM, Infor, Oracle, Vena Solutions, Hot Analytics, Adaptive Insights Salesforce, Oracle, IBM, Marketo, Adobe Ariba, Coupa, Emptoris, iValua, Bravo Solutions, Zycus Manhattan Associates, JDA Software, SAP, Oracle Kinaxis, JDA Software, OM Partners IBM, SAP

Apart from the above mentioned table which shows only a partial list; multiple other applications are being used by present organizations. There are multiple reasons for why the application landscape of an organization contains many applications. Though ERP covers many of the business functions, a single ERP may not provide solutions for all the business areas. Tier-1 ERP vendors like SAP and Oracle are front-runners in providing more functionality as compared to other ERP vendors. Still, they fail to provide end to end solutions covering each aspect of a business. Again the cost of Tier 1 ERP solutions like SAP or Oracle is higher and hence many of the SMBs adopt low-cost ERP solutions with comparatively lower functionalities. Another reason is that, though ERP vendors have tried to provide multiple solutions under one umbrella, they might not be stronger in all the areas. Multiple best of breed solutions are available in the market catering to specific business


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needs. For example, functionality for sourcing may be available with many ERP solutions but Ariba, Coupa, iValua may be much ahead in term of functionality and usability. Trends in ERP: When ERP was introduced in the 90s, it used to cover few of the core business areas. Later on, ERP vendors kept on adding new functionalities and what we are seeing today is a much-advanced version. Extended ERP: Starting from the 1960s where some inventory control packages were being used by organizations, the dependency and usage of technology has been increased significantly. In this evolution process, the ERP packages came into existence in the 1990s. The ERP systems helped organizations to integrate many of the processes including manufacturing, finance & accounting, inventory, human resources, distribution etc. Conventionally the ERP system is used only for back-office operations. The extended ERP included many more functionalities.

Figure.1 SCM, ERP, CRM and IT landscape for an organization Source: Authors development based on Literature Reviews, 2018

In the above picture, the author has shown the linkage between SCM, ERP, CRM and IT landscape for an organization. In the year 2000 Gartner group coined the term “ERP II” in their article “ERP is dead, long live ERP II”. ERP II helps organizations to integrate beyond the organizational boundary to swap information with external stakeholders. SCM, CRM, eBusiness, HRM, Advanced Planning are few of the areas of the new extended ERP system. With extended ERP, the boundary of ERP system is no longer confined within the boundary of the organization, the boundary has been extended to suppliers, customers, even supplier‟s suppliers & customer‟s customers.

3. EVOLVING ERP SYSTEMS ERP was used as a transactional system only, where the processes were mapped in an integrated manner and few MIS reports were used to be generated. The role of ERP has changed over the years; now it has become managerial decision support system. The present day‟s ERP systems provide analytical abilities for strategic decision making. Hence the ERP systems are not just IT software, rather these are business software. The Ability of modern ERP systems to integrate with other systems has also been enhanced significantly. ERP systems have become the backbone for organizations. From transactional system, they have got transformed into information systems. ERP systems in many of the organizations have played the vital role in standardizing business processes. ERP is still evolving and it must adapt to new technological developments. http://www.iaeme.com/IJMET/index.asp

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4. APPLICATION CONSOLIDATION Present business environment sees a lot of application consolidations. To provide business benefits and to provide better customer service, ERP vendors are keep on acquiring other solutions to strengthen their product offerings. Below list shows some of the major acquisitions by SAP and Oracle in the past years. Few of the major acquisitions by Oracle are as follows: 

Aconex (Dec 2017) – Cloud-based construction project management

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NetSuite (Jul 2016) – Cloud ERP

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MICROS Systems (Jun 2014) – SW and HW application for hospital and retail

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Taleo (Feb 2012) – Talent Management Application

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Sun Microsystems (Jan 2010) - Servers, storage, networks, Java, MySQL database

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Java (Apr 2009) – Software Language

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Primavera (Oct 2008) – Project Management Software

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Hyperion Corporation (Mar 2007) – Enterprise Performance Management

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Demantra (Jun 2006) – Demand Planning Software

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Siebel Systems (Jan 2006) – CRM Solution

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G-Log (Sep 2005) – Transportation Management System

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i-flex (Aug 2005) – Banking Software

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Retek (Apr 2005) – Retail Industry Solution

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PeopleSoft (Jan 2005) – ERP Solution

Few of the important acquisitions by SAP are as follows: 

CallidusCloud (Jan 2018) - Sales Performance Management Tool

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Concur Technologies (Sep 2014) – Travel & Expense Management

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Hybris (May 2013) – E-commerce solution

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Ariba (Oct 2012) – Sourcing platform

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SuccessFactors (Dec 2011) – HCM

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Sybase (May 2010) - Database, middleware

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BusinessObjects (Oct 2007) – BI

This trend is likely to continue but the question that arises is about the extent of improvement they can bring to the solutions/applications they acquire and to the extent these platforms can be integrated with their own or other ERP solutions.

5. TECHNOLOGICAL TRENDS IN ERP Technology is developing at a very vast pace. In recent years, the business world has seen a much of digital developments. The recent developments in cloud computing, AI (Artificial Intelligence), 3D printing, Big Data & Analytics, IoT (Internet of Things), VR (Virtual Reality) and many more have changed the way business was being done traditionally. The business world is becoming more and more data-driven. New technological advancements are beneficial, but at the same time they pose a risk of none or poor integrations between data


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silos, inaccuracy of trusted data, inadequate support for the end to end business processes etc. ERP has been extending it boundary to maximize its reach for all the business processes, both inside and outside of the organization. At the same time, technological advancements and digital disruption are putting pressure on ERP vendors to adopt and integrate with the next generation technologies for providing better business values. Some of the emerging technologies and their integration impact on ERP have been discussed below.

Cloud Adoption Cloud adoption is on the rise and it won‟t be false to say that the future is the cloud. Cloud ERP is an approach where by organizations use, Cloud computing platforms and services for ERP. ERP requires huge capital investment in infrastructure, licenses and support. In cloud computing, a part or whole application can be used as a service and organizations have the option to pay as they use. The model is an Opex model where the companies don‟t need much capital investment. Various cloud service options are available; SAAS (Software as a Service), PAAS (Platform as a Service), IAAS (Infrastructure as a Service). The cloud vendors are also providing various cloud deployment options such as Private Cloud, Public Cloud, and Hybrid Cloud. The penetration of ERP has been increased to SMB sector because of cloud adoption. Cloud adoption is growing because of several benefits being provided by cloud computing such as scalability, pay per use, reduced cost of infrastructure, mobility & automation etc. In fact, the growth rate of cloud adoption among enterprises is higher than what many of the researchers have anticipated.

Artificial Intelligence Use of AI (Artificial Intelligence) in business operations has always been a hot topic. The scope of AI also covers providing input into ERP systems to optimize and transform business processes. With dropping in cost, organizations are considering the option to incorporate AI into ERP. Use of AI in ERP can provide various benefits to the business. It can rationalize many monotonous tasks and eliminate human errors. AI can help in optimizing day-to-day business function, reduce operational expenses, and enhance system maintenance process. Few applications of AI in ERP are Chatbots, Dynamic Workflows, Performance monitoring, Improved Field Service, Intelligent Data Search for deeper insight etc.

IoT, Business Automation and, ERP IoT or Internet of Thing is one of the much talked about the technology of present years. It consists of the network of sensors, devices, software, objects etc. to connect with each other and to exchange data. Digital transformation for an enterprise requires IoT services; IoT can help organisations in many ways. IoT can be used to optimize production, logistics, CRM, and SCM activities. The sensor-based real-time data may substitute complex forecasting models. Monitoring and data analysis becomes real-time and business processes can be automated. ERP is being used by organizations since long and is considered one of the important tools for digitization. But connectivity of ERP with IoT is less. A survey conducted by IFS shows that only 16% companies use IoT data in ERP and even many bigger companies are on the backfoot. Many of the ERP applications are not that capable of handling IoT, though some ERP experts opine that ERP is IoT ready.

Big Data & ERP ERP and Big Data systems are two distinct systems those don‟t have many of the things in common. The role of ERP is to integrate and process organizational data those may be internal or external. Big Data systems process a huge amount of data coming from various


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sources and process these data to study the trends, patterns and predict the desired outcome. Though these are two distinct systems, both the systems can be integrated for the advantage of the business. Few of the business advantages are better and faster information, better scheduling for projects, predictive analytics, improved customer profiling, better employee profiling etc. Big Data collects data from various sources and ERP may be one of the sources providing data input to Big Data. On the other hand, ERP stands on data and data from Big Data may be required as input for ERP. Hence both the system must run parallel with bothway information sharing. But few challenges still remain in order to do so. ERP requires clean data but Big Data collects a huge amount of data from multiple sources those may not be relevant for ERP. Also identifying the integration points and integrating Big Data with ERP is not that simple and is a time-consuming process. As per the opinion of industry experts, it may take 2-5 year for a healthy integration.

User Friendly ERP ERP adoption and success depends on many factors; user-friendliness is one of the important factors among those. A typical ERP consists of 3 tiers, Database, Server and the UI. The UI or the User Interface is what the ERP users see on the computer screen. Users favour an intuitive interface with easy navigation facility. The application must be feature rich but at the same time, it should not be complex to operate. ERP vendors are constantly working on such area to develop user friendly applications with graphs, dashboards, easy to use features etc.

Mobility & ERP Mobility is one of the driving force reigning the software space since quite a while now. Mobility is impacting the way business is being done traditionally. With mobility solutions employees can manage many of their jobs on the go through Mobile devices like laptops, tablets and, smartphones. With the increase in Smartphone usage, the mobile “APP” market has grown up significantly and many of the business applications are already available in the form mobile apps. The ERP vendors are also developing mobile ERP that can provide flexibility to the organizations. Seeing the growth in mobility, it can be said that future world will experience mobile only ERP.

ERP & Analytics Analytics is playing a bigger role in today‟s business environment. The businesses are becoming more and more data-driven and there is a definite need to analyse the data and predict the future outcomes. In initial years ERP was coupled with some reporting tools for extracting data and analysis was done outside the system with tools like Excel. In the next phase, software vendors came up with BI solutions. The role of BI solution is to transform data into actionable intelligence that aid in organizational decision making. BI tools pull out data from and present those in form of graphs, charts, dashboards for easy interpretation. Analytics is a wider term comprising Data Warehouse, BI, Information Management, Performance management, Analytic applications, risk & governance etc. The major advantage that analytics provides is “predictive analytics”. Many of the ERP vendors are incorporating BI and/or Analytics tools as a standard feature along with ERP. Analytics has a major role to play in the introduction of Big Data. Still, many of the organisations are using spreadsheets for data analysis due to various reasons. The issues must be addressed properly by the software vendors so that the organization can take full benefit of ERP and analytics.


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6. ERP &INTEGRATION ASPECTS Technology has got evolved to such a point that now the organization has many options available to them to support their business functions. Many best of breed solutions are available to the aid of the organizations. In the past, organizations were not in favour of multiple applications because of complexity in integration but with technological advancements complex integration issues have been addressed and now multiple applications can seamlessly be integrated with ERP solutions for optimizing business operations. But the concept of an integrated enterprise is still a dream. Most of the organizations in today‟s business environment use multiple non-integrated business applications. Though most of the ERP vendors are providing facilities for integration, many a times integration is either not possible because of multiple factors or the integration becomes costly. Also, ERP integrations with emerging technologies and applications always remain a challenge for the ERP vendors.

7. SECURITY & ERP ERP system is the most critical business application as ERP captures all business operational data. With technological advances, ERP is becoming more integrated, collaborative, mobile, web-enabled and data intensive. Such advancements make ERP data more vulnerable. Hence, ERP security should be on the priority agenda of the enterprises. The security aspect of ERP includes role-based access, logs, user account controls, authentication, time restriction etc. Apart from these standard security aspects, cyber security has come more prevalent in recent years. Hackings and penetration activities, ransom ware etc. are on the rise globally and cloud, mobile, web-based ERP solutions are getting exposed to such attacks. Cloud and Cyber Security are on the prime agenda in recent times for ERP and cloud vendors.

8. CONCLUSION AND FUTURE RESEARCH DIRECTIONS Technology is evolving and the evolution is happening at a very fast pace. It has been rightly said that “Tomorrow is approaching fast”. Organizations are seeking for the right technologies in order to have competitive edge. It will an integrated platform of ERP, IoT, AI, Big Data and Analytics is going to be the future. ERP products must be future ready and they must leverage on the developing technologies. The ERP vendors are continuously upgrading their products and adding functionalities to cope up with the technological advancements. Apart from ERP vendors, other software product vendors are also coming up with advanced & specialized business applications catering to specific business areas. Organizations have to deal with different applications and technologies in order to have competitive edge. Considering the trends, future research may be conducted to develop an effective model for organizations to deal with current complex applications integration platform and way by which ERP can optimally be coupled up with the new technological platforms like IoT, AI, Big Data & Analytics etc. The solutions should be cost- effective so that most of the business organizations may take benefit. Rising security breaches pose a concern for organizations and future researchers may focus on security trends on their impact on ERP systems. With technological advancements business operation are also changing. CRM, SCM operations are also evolving and new models are getting developed. Researchers may also be interested to find out fitment of ERP in the age of digital disruption and fast-changing business processes.

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