Evolution of ERP and the changing landscape of Sri Lanka


What’s worse than having a leak in your boat? Not knowing about it. This is similar to the realization that one business owner had until setting up an ERP system in his organization and realizing that for the past two years his sales team had mistakenly been selling high-value products (worth over 40 million LKR each) below cost. It was only after the ERP was set up that they came to this realization and was able to sell these products at the correct price points. In the business world, a state of unawareness is a dangerous and expensive position to be in. “Sometimes businesses pay for an ERP with several features. But they only end up using 25% of these features. So there’s a lot of waste. Whereas with our solution, they can pick and choose the features they need and pay only for those,” said CoFounder and COO of BlueLotus 360, Nithushan Uthayakumar.

An ERP (or Enterprise Resource Planning) software is one that connects up all the various operations of an organization in order to smoothly monitor and streamline processes across the entire entity. Through proper feedback and transparency, problems (like leaks in your organizational boat) can be identified along with underused opportunities for generating revenue.

The idea of ERP did not start at the turn of this century. Rather, it began even before man landed on the moon; with the concept being applied to inventory management in the manufacturing sector during the 1960s. In 1990, Gartner famously coined the acronym ERP and the usability of these systems spilled over into the areas of accounting and human resources, amongst others.

“SMEs Have to Stick to Accounting Packages”

Setting up an ERP system historically needed large initial investment. The perception that SMEs had (and still have, to an extent) is that these products are not for them and are reserved only for the largest of companies. This has been true for the most part since modern ERP began. However, the capabilities and scope of the systems themselves have been upgraded greatly over the last two decades. The explosion of the internet and automation along with advancements such as SaaS (Software as a Service) picking up steam in recent years allow companies with more modest budgets the access to products such as ERPs on a subscription basis. 

Describing the impact of the SaaS model for ERP adoption, Nithushan said, “In the past, the assumption was that SMEs have to stick to accounting packages. Today, the SaaS model allows them to enjoy the benefits of an ERP. Increasingly, we’re seeing this phenomenon in emerging markets where SMEs are shifting away from international brands like SAP and Oracle. Instead, opting for local ERP solutions, which offer the same benefits but at the fraction of the cost.”

ERP | Enterprise Resource Planning
In the past, it was assumed that SMEs only needed accounting software. Today, the SaaS model has allowed SMEs to enjoy the benefits of ERPs.

Looking at the wider Sri Lankan business environment, although the SME sector accounts for only 45% of the country’s employment and just over 50% of the contribution to GDP, the bulk of the organizations in the country (over 75%) happen to be SMEs. This places a locally based ERP vendor like Blue Lotus 360 in a very unique position.

They have previously built and serviced high-end systems for equally high-end multinational clients; even few departments of the Sri Lankan government handle finances through their systems. But the real leverage Blue Lotus 360 brings now is by opening the door to financially viable subscription-based ERP solutions for local and regional SMEs. Solutions where companies have the flexibility to pay only for the modules that they need to use – and upgrade when they expand their capabilities or requirements.

“The New Normal”

This is perhaps the most overused phrase during the past quarter. However, its validity cannot be denied as digitalization and technology usage within our society, especially the business landscape, has been catalyzed by the spread of this pandemic.

These uncertain times have caused the budgets of a majority of companies to become heavily scrutinized. This makes spreading the investment of a profitable (and traditionally CapEx) product, such as ERP software, an opportunity worthy to consider seizing. Today, the adoption of technology is an almost-mandatory stepping stone to business growth and in some cases, it is a strategy to simply survive.

Evolution of ERP and the changing landscape of Sri Lanka 3
With the COVID-19 pandemic forcing businesses to adapt to a new reality, the necessity of ERPs and other technologies has become clear

The COVID-19 pandemic has disrupted several industries. Manufacturing was among the hardest hit and is increasingly looking towards automation. Already, several manufacturers have begun adopting ERPs to monitor their factories. Speaking to ReadMe, Nithushan shared that a local food producer has opted to use Blue Lotus 360 to monitor their manufacturing operations remotely. “Previously, companies thought of these systems as heavy costs. Now they’re seeing why such solutions are a necessity,” commented Nithushan. 

An ERP facilitates the ability to work remotely and stay on top of company operations. This is akin to the central nervous system that connects and manages the body’s organs; it monitors the vital processes and reports when there are serious situations that require action to be taken. Its absence in where organs function without instruction or feedback would cause chaos. For example, it would be difficult to manage a day when the rate at which your lungs breathe does not change, but it is dreadful to think how bad your day will be if there was a leak that you had no idea about.


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