Vibhu Kapoor at Epicor takes us through the market dynamics of ERP business applications and links it to challenges faced by channel partners, offering tips for them to succeed.
In the Middle East, enterprise planning is now essential to manufacturers, and heavy industry sectors that are in turn critical to governments’ economic diversification programmes. In the oil-rich Arab Gulf, channel partners who operate in the ERP space are going to see significant opportunities. But capitalising on them will require a little guile.
According to Strategic Market Research, the global ERP software segment was worth US$50.84 billion in 2021 and will reach US$117.68 billion by 2030.
The first problem is scarcity. ERP rollouts are high-value projects, but not every business uses the technology, so ERP customers are going to be rarer to come by. And when we look at the market from a technology standpoint, we find a divided space with some providers focusing on SMEs and others on larger enterprises. Scalability of ERP, it seems, is a rare capability.
So, ERP providers that are looking to get famous and become the go-to channel champion in this growing segment need ways to stand apart and get noticed. There are two ways of doing so in the current market.
Since the computing revolution of the 1990s, IT decision makers have faced the procurement quandary of requirement fit vs limited resources. To find something that fits every business use case takes too long and costs too much. Today, many vendors provide customisation options that make plugging these gaps easier, and this is big business in the ERP space. ERP, by its very nature, has a vast set of functions and caters to a wide array of industries.
But the specificity of individual businesses – especially those that are doing something out of the ordinary to differentiate themselves in their own markets – cannot be entirely covered. Unique workflows and data requirements, influenced by factors such as regulations or customer needs, call for expertise in implementation.
The channel player that enables an enterprise to integrate new technologies into its ERP system is the player that ensures that their customer remains competitive. That is a fine foundation for a lasting and meaningful business relationship. Each customer that the channel partner can help in this way will become a staunch ambassador for the channel partner’s brand.
Seamless integration is not without its challenges. It can be time-consuming and expensive in terms of cash reserves and resources. But these obstacles just present further opportunities for the channel partner that can manage an ERP project end-to-end and overcome traditional roadblocks.
In conjunction with integration, and to address the rarity of projects, partners could look to focus on creating modules that streamline workflows specific to certain industries. For example, given the importance of ERP technology to the regional manufacturing sector, channel partners could build an ERP package that includes modules for production planning, shop floor control, and quality control. Healthcare, another high-growth industry in the region, could benefit from patient management, medical records, and insurance claims modules.
Apart from functional modules, industry-specific data analytics and reporting tools will also be of value to businesses. Insights on operations and performance are a significant value add. While channel partners may have to onboard specialised talent, or, at the very least, invest in the reskilling of existing staff to verticalize and configure their solutions in the ways described, the investment is worth it. Industry-specific modules, once developed, can be offered to multiple customers, and may even serve as a means to acquire new accounts.
Keep it simple
The road ahead is not without challenges. There is undeniable complexity in a business model that specialises in integration and configuration of solutions, not to mention the necessary investment in skilling initiatives. But customers want what they want. If they know their digital transformation can be done to 100% requirements fit with a competitor, those who cannot meet those standards may be left out in the cold.
Too many ERP deployments fail because they are not well enough integrated into a customer’s broader ecosystem, which today may include CRM, e-commerce, analytics, logistics, HR, and a range of others. Customers, despite being in search of a 100% fit, remain dedicated to simplicity. That means channel partners must build their ERP offerings with simplicity in mind. They must therefore seek out platforms that have native APIs for ease of integration with a wide array of third-party applications.
The partner’s goal will be to meet individual customer needs without having to expend too many resources and person-hours. They should therefore also look for ERP platforms that follow a modular approach. This will enable them to customise and build their vertical-specific solutions and gradually build out their portfolio, leading to an expansion of their business.
Make yourself famous
Opportunity may be everywhere, but that does not mean opportunities for everyone. Throughout the pandemic, the channel proved itself over and over. Collaboration has won the day before, and a cloud-first message has rung true in a world now irreversibly enmeshed in multiple clouds. If the channel continues to work as a unit and makes the moves here described towards integration and configuration, I foresee great gains ahead for all those working in the ERP solutions space.
Partners must keep on engaging with channel managers to execute flawlessly in every area, from marketing to sales. We have proven our strengths and built new capabilities to mitigate our weaknesses. Now it is time to look at the massive CAGR for ERP in the region over the next decade and decide how we will share in that prosperity.
Will we retain old habits, or will we do what is hard, yet necessary, and engage in integration and configuration for the good of our customers and the longevity of our brands?
ERP market dynamics, tips for success
- ERP rollouts are high-value projects and not every business uses the technology.
- ERP customers are going to be rarer to come by.
- Some providers are focusing on SMEs and others on larger enterprises.
- Workflows and data requirements, influenced by regulations or customer needs, call for expertise in implementation.
- The channel player that enables an enterprise to integrate new technologies into its ERP system, ensures their customer remains competitive.
- Each customer that the channel partner can help will become a staunch ambassador for the channel partner’s brand.
- Partners can focus on creating modules that streamline workflows specific to certain industries.
- While channel partners may have to onboard specialised talent, the investment is worth it.
- Industry-specific modules, once developed, can be offered to multiple customers, and may even serve as a means to acquire new accounts.
- Too many ERP deployments fail because they are not well enough integrated into a customer’s broader ecosystem.
- Customers, despite being in search of a 100% fit, remain dedicated to simplicity.
- Channel partners must build ERP offerings with simplicity in mind.
- Channel partners must seek out platforms that have native APIs for ease of integration.
- Channel partners should look for ERP platforms that follow a modular approach.
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