Why It Matters: Scalability and ERP Software

Why It Matters: Scalability and ERP Software

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SEPTEMBER 12, 2017 BY GEIR TONNESSEN

SEPTEMBER 12, 2017 BY GEIR TONNESSEN

Note: This is a brief overview. Stay tuned for more in-depth explorations of scalability and the inheritance principle. 

In the age of globalization, business growth need not stop at national borders. Scalability—the capacity to handle growth and change—sits atop the priorities of today’s ERP buyers. In the context of ERP software, scalability entails both access to on-demand computing resources and the ability to manage multiple business entities. An ERP system’s scalability hinges on its capacity to handle the increased complexity and added rules of international expansion.

Too often, ambitious organizations outgrow their ERP systems, incurring considerable pain. Either these systems have aged beyond support, or they simply cannot handle rising complexity. With scalability rising in importance every year, why do so many ambitious companies still hold on to non-scalable ERP solutions? Frequently, these organizations do not find solutions to cover their needs and compromise by omitting scalability from their search-list, only to realize their error when growth occurs. Fears over the expense and inconvenience of purchasing a new ERP system also play a part. 

Savvy ERP buyers take a long view, looking for solutions that will retain overwhelming value. Yet searchers should never neglect the short view. ERP upgrades and growth should be seamless. An organization should not have to suffer significant downtime or install new software just so that it can cope with the slightest problem. ERP systems should adapt to business units within the same organization: simple for the small units, feature-rich for the large. 

Illustrative diagram of scalability

As a company starts to expand internationally, its executives must ask themselves: Is our ERP system available in many languages? Can to handle multiple currencies? Multiple fiscal years? More than one chart of accounts? Most importantly, does it allow our company to expand internationally while remaining one entity, or must we fracture into separate islands? These are the true measures of scalability. 

Does your ERP system allow your company to expand internationally while remaining one entity, or must you fracture into separate islands?

Already the most automated solution on the market, the following features make Xledger’s cloud ERP system the most scalable as well: the system-wide application of the inheritance principle, multi-tenant cloud architecture, workflow, extensive automation, flexible resource management capabilities, and powerful consolidation.

Increasingly, companies have employees working in multiple locations. They aspire to support their staff with an efficient and fully unified ERP system across the enterprise. Many systems can scale up or down easily from a capability standpoint, but, unfortunately, they require linear growth in the administrative or technical workforce to do so.

Here Xledger stands apart. It enables rapid on-boarding of departments, divisions, business units, or new and acquired companies. Xledger’s solution affords companies the ability to report both within each entity and across the entire organization. Yet Xledger does so without the overhead traditionally required to operate and maintain such a system.

Xledger empowers growth in size or scope without the need to significantly increase personnel for system operation and maintenance. Customers face no further pressure to change systems or make significant capital investments. They grow with Xledger.

Xledger’s ERP system derives its competitive advantage with regard to scalability from the following three sources:

  1.  Comprehensive and unified ERP: Xledger’s robust feature set allows organizations to stay on Xledger as they grow in size and required functionalities. 
  2. True cloud multi-tenant architecture: True cloud architecture provides for far more scalability than traditional on-premise ERP solutions. The system can easily be accessed from new locations as the customer expands operations. Both the architectural design of Xledger’s database and consistent efforts to streamline it ensure that Xledger outscales and outperforms its competitors. Due to fewer integration touch-points, Xledger’s unit cost is lower, allowing the system to automate more services. 
  3. The inheritance principle: The inheritance principle is a unique differentiator for Xledger: each level of a client’s business inherits the rules of the level immediately above it. Applied throughout the entire hierarchical structure of Xledger’s platform, this principle equips growing clients to create new business units and subsidiaries, without hindrance and whenever necessary. 
Aerial view of a cityscape

The inheritance principle maximizes scalability in the following ways: 

  • Users can perform set up from one place, such as the global level, the country level (e.g. exchange rates), and the enterprise level. Besides simplifying administration, this means that users can also configure hierarchies with ease.
  • While the Xledger system inherits rules from the global and regional level, each enterprise can specify its own distinct setup, with a country-specific chart of accounts and the ability to alter it while retaining a consolidated view. In other words, client-companies can easily make deviations at the entity, sub-entity, or business unit levels—deviations that ‘inherit’ downward but not upward. 
  • Xledger’s clients can freely define their level of centralization, business rules, and user roles and responsibilities. Organizations can determine (and expand) workflow configuration in one of two ways: at a centralized level or independently across entities.
  • Users can quickly move between various levels and companies in the enterprise structure without having to log in for each company or business unit.
  • The system updates data simultaneously and in real-time for all units. This enables easy and accurate cash management across a distributed organization, freeing up the customer’s front-line resources by centralizing/automating back-office functions.

One of Xledger’s customers, a preschool company, provides an instructive example of scalability in action. After implementing Xledger, the company grew from one preschool to many, from one city to multiple states, and then from multiple states to other countries. Xledger’s cloud system facilitated this expansion. Not only did the company save the cost of a new ERP solution; in fact, administrative and per-child costs plummeted as it grew.  

Whether for- or non-profit, Xledger empowers its customers with freedom and peace-of-mind. They can grow without worrying about the limits of their ERP infrastructure, restrained only by the limits of their ambition. 

To learn more about Xledger, the most automated ERP solution on the market, contact us for a product demonstration tailored to your needs.

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