The new requirements for ERP in the new services economy
Are you selling products, subscriptions, professional services, or some combination thereof? With both B2C and B2B clients devouring subscription-based services in the new services economy, customer experience matters more than ever.
In response, many businesses have taken the first step from on-premise to cloud-first systems. But a critical obstacle remains: most cloud ERP systems still focus on linear, transactional order-to-cash processes. Using such systems unfortunately makes an anchor of the back office, impeding innovation and the potential for new business models. In order to rapidly and intelligently serve customers in the new services economy, you must instead choose an ERP solution built around the following key elements.
1. Business model agility
The vast majority (80%) of companies have noticed a change in how their customers want to access and pay for goods and services, and 50% of those same companies are changing their pricing models as a result, according to The Economist. Businesses must now be able to develop and leverage flexible, ever-evolving business models that can adapt to changes in technology, the competitive landscape, and customer expectations.
Running your business in entirely new ways requires an ERP system that allows you to view multiple revenue streams, easily add new business models, and transition to emerging regulations (e.g. ASC 606, IFRS 15) without disrupting core business processes. The ideal ERP solution will not just let you redefine your business but will also give you real-time access to core metrics around forecasting, profitability, and customer success.
2. Time & talent optimization
Large consulting firms have long understood how critical it is to efficiently use their resources—not just cash, but time and talent too. In the new services economy, you must be able to act with the finesse and wisdom of a leading consulting firm by adopting a cloud ERP solution designed for time and talent optimization.
Such a solution must allow your business to balance supply and demand for all resources at the global level while also allowing individual teams to assign specific people with specific skills to specific projects. These same systems should also be intrinsically tied to finances so that your business can predict profitability of customers as well as which resources will be needed in the future. And, perhaps most importantly, instead of making people contort their workflows around an inflexible tool, the ideal ERP solution should be able to adapt itself to your people and existing processes.
3. Predictive insights
Ultimately, the ideal ERP solution should offer you a complete view of your business within the context of your customers’ journey – from transactions and people hours to process details and interactions. Those best positioned to thrive will be those that can access all this data to derive future best practices and predictive intelligence.
The right ERP should grant you deep understanding of your utilization metrics and give you the power to predict future customer patterns and behaviors so at any given time you can act in the best way for your business. In the new services economy, every organization will have countless paths to choose from, but focus will be more important than ever. Optimizing your business outcomes based on leading indicators vs lagging indicators will allow you to guide your business in the right direction.
To learn even more about succeeding in the new services economy, download the ultimate guide here.