Collaboration Key to Maximizing ERP

New CIO survey finds companies leveraging cloud-based business commerce solutions to reach beyond four walls and drive greater transparency and efficiency

SUNNYVALE, Calif. — (BUSINESS WIRE) — July 12, 2011 — Few systems are more efficient at managing internal data than Enterprise Resource Planning (ERP). But business happens between companies. And when it comes to managing external information and relationships, ERP falls short. To fill this gap, many organizations are turning to open platforms that can be more easily accessed and shared. According to the latest CIO Market Pulse survey, “Cloud-Based Business Commerce Solutions,” an increasing number of companies running ERP are leveraging cloud-based business commerce solutions to reach beyond the four walls and drive greater collaboration, transparency and efficiency. On Tuesday, August 9, Ariba, Inc. (NASDAQ: ARBA), the leading provider of collaborative business commerce solutions, will host an interactive webinar to present the full findings of the CIO Market Pulse survey and outline ways in which companies can extend the value of their ERP systems and the value they deliver by tapping into the Cloud. The live session will feature Bob Melk, Group Publisher, IDG Enterprise (publisher of CIO) and will take place from 11 a.m. – 12 p.m. ET.

“Cloud computing solutions are being investigated by organizations to streamline process and accessibility for a variety of initiatives, including ERP,” said Melk. “The research from the recent CIO Market Pulse survey highlights the benefits of transitioning components of ERP systems to the cloud, including the ability for partners to access pertinent information, which can provide enhanced external communication and cost savings.”

According to the CIO Market Pulse survey, “Cloud-Based Business Commerce Solutions,” the majority of organizations—52 percent of survey respondents—are open to or aggressively pursuing cloud-based applications that can enhance their current ERP investments to enable improved collaboration and information sharing with external business partners. Half the survey respondents were based in the United States, while the other half were located in Europe, the Middle East and Africa.

Delivered in the cloud, these solutions leverage a network-centric model to connect multiple business partners and automate shared businesses processes, especially purchasing and financial transactions across multiple systems. And enterprises of all sizes are using them across functions to reduce operating costs and boost productivity and profits.

“Businesses have spent the past 20 years deploying ERP and other enterprise applications to streamline processes and improve information flows within their companies,” said Tim Minahan, Chief Marketing Officer, Ariba. “The next wave of productivity will come from extending these investments to improve process efficiencies and collaboration between companies. Cloud applications will be a key enabler of such benefits, combining a community of digitally-connected buyers and sellers in many-to-many format with multi-enterprise process automation. The Cloud enables ERP users to fuel more efficient trading relationships and collaboration – and ultimately, better commerce - across a shared community, regardless of which back-end system each party uses.”

Spend management in the cloud

ERP systems can allow a company to issue purchase requests, route approvals, and generate orders. But they stop at the end of the enterprise with the generation of an approved order that must be routed through various channels that are disconnected, and often only semi-automated – from fax and e-mail to proprietary and costly EDI networks and point-to-point portals. To extend their reach, 31 percent of respondents to the CIO Market Pulse survey say their organization has deployed, is currently deploying or is very likely to deploy cloud-based spend management applications, which allow companies to manage spend internally and externally from end-to-end through a many-to-many connection; and 34 percent say their organization will possibly consider deploying cloud-based spend management applications in the next 24 months.

Financials applications in the cloud

ERP systems excel at managing financial transactions within the organization. But processing an invoice involves collaboration between buyers and sellers. To support this multi-enterprise connectivity and collaboration, and for example, manage the electronic settlement process, such as enabling suppliers to convert paper-based purchase orders and invoices into electronic ones, delivering detailed remittance with electronic payment, and enabling dynamic or sliding-scale early payment discounts, companies are tapping cloud-based financial solutions. Such solutions can enable the kind of collaboration between buyers, suppliers and financial institutions required to better manage their payables, days payable outstanding and cash, while providing trade and receivables financing options that ensure their mutual financial health – a must in today’s still-recovering global economy.

Of the respondents to the CIO Market Pulse survey, 29 percent say their organization has deployed, is currently deploying or is very likely to deploy cloud-based collaborative finance applications. Another 29 percent say their organizations will possibly consider deploying them in the next 24 months.

Demand management in the cloud

ERP systems can connect a buyer to a seller to transmit a purchase order. But to connect to buyers and generate business, many sellers are pursuing cloud-based demand generation solutions that link them with buyers in active purchasing cycles who have specific needs, such as a particular proposal or request for information. By coming together within a cloud-based demand-generation application, suppliers can see a 20 percent to 30 percent increase in sales year over year.

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