Surviving Post COVID-19 with ERP

Introduction

From January 2020, Singapore companies began to feel the impact of the COVID-19.  The earliest problem came from the supply chain. Companies realized that they could not fulfill or had to delay orders.  Their suppliers in China stopped production.  The transportation sectors in China went into lockdown.  And the effect rippled downstream to the suppliers in other countries.

Then came the banning of flights between countries.  Even face-to-face discussion and meetings became a non-permissible task.

By March 2020, many of the businesses had to operate under partial capacity.  Non-essential services and enterprises eventually had to seize operations or change the way of work.  The fortunate companies started to have their employees work from home.  The unfortunate ones could not even operate.  Internet traffic increased exponentially.  And it did not help when Internet Services from Starhub went down on 8 April 2020—disrupting those who worked from home.  On 12 May 2020, the same situation happened to M1 subscribers when they faced challenges with their Internet Services.

The impact of COVID-19 will be a long term one.  Companies need to plan for surviving the Post COVID-19 period with ERP.

Those with Enterprise Resource Planning (ERP) will need to enhance their systems further to work efficiently under the new normal.  Those without ERP will have to determine if they will need an ERP system and understand how it will help them survive the post-COVID-19.

How Businesses are Affected by COVID-19

CMI experts analyzed 25 industries from a global perspective, assessing each industry’s resiliency to COVID-19.  They came to the following observations in their report “CMI State of the Market: Early Indicators of COVID-19 Impact,” which was released on 10 April 2020.

CMI COVID19 Impact

So, what were the observations from this study?  What type of businesses were most severely impacted by the COVID-19:

  1. Businesses that deliver services and products to their customers through person-to-person contact (Except healthcare)
  2. Labor-intensive businesses (Except healthcare)
  3. Businesses that lack the option to operate with less human contact (For example, retailers who could not sell online)

In other words: “Human is an asset for businesses, but it is also the Weakest Link.”

Post COVID-19 New Normal

COVID-19 had already changed our customers’ behavior and how we operate our business:

  • Customers had to purchase online for products and services since they could no longer visit retail shops
  • Companies started to realize the need to diversify their sources and their supply chain
  • Companies recognized the need for the ability for remote working
  • Companies realized the importance of automation to reduce their reliance on labor
  • Companies had to figure out ways to deliver their services and products remotely

CMI predicts the following changes to the business environment:

Demand for Cloud Solutions to Accelerate

What had been a regionalized cloud adoption trend will now become global and accelerate.

Expect companies to exchange on-premises projects for cloud ones that can provide continuity from future crises.

Demand for Digital Transformation Initiatives to Accelerate

Companies will realize that the more digitalized their business, the more continuity they can ensure when facing future global crises.

In general, companies with resilient IT budgets will have an advantage in digital transformation.

Companies to Embrace New Business Models that Favor Automation and Analytics

Supply chain/sourcing agility, contingent workforce management, and horizontal automation will become more substantial business priorities.

Digitalization and automation will enable companies to both ensure continuity and remain competitive.

The Unique Singapore Situation

Singapore companies are unique in many ways as compared to our regional and global competitors.

Small Local Market

We have a small local market.  Trade activities with companies outside of Singapore are an essential part of our economy.

We have to continue to be an open economy.  Singapore companies need access to resources globally, but also it means that we have to compete globally.

Strong Infrastructure

Singapore has the most complete and advanced infrastructure in the region and even when compared globally.  We are a transportation hub of the region that allows us to link to the rest of the world.  Our IT and telecommunications are world-class.

Our robust infrastructure allows Singapore companies to easily access to advanced technology at a reasonable cost to compete globally.

Strong Government Support

Singapore government is one of the few governments in the world who has the financial capacity to assist our companies in surviving and thriving in the post-COVID-19 era. They are various short-term support for Singapore companies to survive the current COVID-19 circuit breaker period.

To help Singapore companies to prepare for the post-COVID-19 uptakes, the government had increased the support for Enterprise Development Grant (EDG) from 70% to 80% from 1 April 2020 to 31 December 2020.  For firms that are most severely impacted by COVID-19, the maximum support level can be further raised to 90% on a case-by-case basis.  This grant is often utilized by Singapore companies to subsidize the cost of their Enterprise Resource Planning (ERP) projects.

How ERP Helps Companies in Post-COVID-19

Many companies in Singapore had benefitted from the implementation of Enterprise Resource Planning solutions (ERP) in the last 30 years.

The new normal will present various challenges to companies.  ERP will become more important for companies who need to plan for surviving the Post COVID-19 period.

Rapid Changes

Changes will be fast, and companies need to adjust quickly.  These changes may present in the following forms:

  • Supplier Price Change
  • Need for Alternative Sources and Comparison
  • Sentiment change of Consumers and Customer

ERP will help to address these changes:

  • Using Analytics for quick Management Decision Making
  • Ability to Rapidly update the Pricing base on supplier sources and pricing information
  • Ability to quickly compare alternate source and make a smart decision
  • Ability to analyze the impact of the changes for Inventory and Cashflow Forecast

Reduce Reliance on Human Intervention

Human is becoming a liability and the weakest link in the post-COVID-19 era.  The solution to minimizing this is to automate as many business processes as they are feasible.

ERP can help companies in the following areas:

  • Provide an Integrated Business Process Internally
  • Integrate with E-Commerce to Enable Companies to Sell in Efficient Way
  • Integrate with the System of your 3rd Party Delivery Contractors
  • For Manufacturing, companies may seriously consider adopting automation such as Industry 4.0 with Integration to the ERP
  • Integration with Warehouse bar code mobility and Proof of Delivery (POD) Solution

Automate Routine Manual Processes

Companies should look into automating their routine manual processes so that the everyday work will not be severely disrupted when similar pandemics situation arises.  The automotive of the routine procedures will also allow management more rooms and attention to planning and managing crises.

Some of the areas that companies can automate or streamline include:

  • AP Automation that provides the ability for automating the vendor payment with approval control remotely
  • Ability to send and receive Electronics Documents through a gateway, such as PEPPOL.
  • E-Payment such as creating API to link to banks for receiving payment from E-Commerce and customers, or making payment
  • Industrial 4.0 and IoT to connect the ERP for automation of Manufacturing processes
  • Artificial Intelligence to speed up decision making

Enable Remote Working

In the post-COVID-19 period, remote working will become the new norm.  ERP system must integrate with other sub-systems for seamless business operations and allow users to access the system outside of the company premises.

Companies can achieve remote access through the following methods:

  • Adopt Cloud ERP
    • Advantages
      • Ease of Remote Access
      • Flexibility to Scale Up or Down
      • Economical for smaller user count
      • Minimum IT resources needed for maintenance
    • Disadvantages
      • May have restrictions for complex Customization and Integration with external systems
      • Costly for larger user count
      • More expensive than a perpetual license in the long run
  • Install ERP on a Private Cloud Environment
    • Advantages
      • Ease of Remote Access
      • Allow complex Customization and Integration
      • Easy to scale up the server resources
    • Disadvantage
      • More expensive as compare to hardware server in the long run
      • Need IT resources for maintenance
  • Set Up ERP from an on-premise server set up for Remote Access
    • Advantages
      • Cheaper than a subscription model in the long run
      • Allow complex Customization and Integration
    • Disadvantage
      • Need IT to set up for Remote Access
      • Difficult to scale up the server resources
      • Need IT resources for maintenance

You may like to read our article on “Cloud ERP or On-Premise ERP – What you Need to Know” for more information.

Conclusions

Singapore companies need to start planning and thinking about how they want to operate in the post-COVID-19 era.  Many things have changed and are unlikely to return to what they used to be.  Surviving the post-COVID-19 with ERP is an important consideration.

The COVID-19 is offering the opportunity for forward-looking companies to thrive and compete in the new normal.

The vast options of established ERP solutions available in Singapore, such as Microsoft Dynamics 365 Business Central and SAP Business One, are making it easy for companies to select and implement suitable ERP.  If the choice is overwhelming, you may like to read our article on “How to Select ERP for SME” for more information.

COVID-19 will not be the last pandemics that we will face.  Even when this is over, there will be other pandemics as we had experienced in history.  Global warming will likely increase the frequency of the pandemics.  Companies should start to look into how to survive and even thrive in the COVID-19 era and not wait until the next pandemics.

If you like to have a discussion on this topic, please do not hesitate to contact us.

Posted 4 May 2020, updated 19 May 2020

About the Author

Raymond Yap MD NaviWorld Singapore

Raymond Yap is a veteran in ERP.  He came from Engineering and Manufacturing background when he implemented the world first Cloud Enterprise Resource Planning (ERP) for his manufacturing company in 1996. It was a Singapore government-sponsored ERP program called “MRP Online” to help Singapore SME towards digitization.

Since then, he spent his career in the ERP industry as consultant, sales, and management of ERP companies.

Raymond also taught in Nanyang Polytechnics, Temasek Polytechnics, and other Universities on topics related to manufacturing, ERP, and IT. He also conducted public ERP seminars in Singapore and Mauritius about the evaluation and implementation of ERP Solutions.

Raymond accumulated a wealth of knowledge and experience about topics on ERP and its application to business operations both as an end-user and vendor. After experiencing ERP projects with hundreds of companies in Singapore and the region, Raymond’s unique experience allows him to share on the practical approach to ERP selection, implementation, and maximizing the ROI of ERP Projects.