The cloud, analytics, better reporting and implementation simplicity are among trends impacting ERP implementations.
The ERP landscape has been undergoing big changes in recent years. Accordingly, Enterprise Apps Today interviewed several experts in this field to determine what’s going on with ERP, where it’s all heading and what companies should be doing about it.
ERP’s Cloudy Future
Market forces such as Bring Your Own Device (BYOD), the need to provide enterprise access to mobile devices, increasingly connected machine environments and virtualization are propelling more and more functions toward the cloud, said Andrew Marder, an ERP specialist at Capterra. ERP won’t be able to stand on the sidelines, he believes.
“The cloud and everything that entails continues to be the future of ERP,” he said.
Larry Korak, industry strategy director, Industrial Manufacturing at Infor, agrees that cloud adoption is the most popular trend with ERP software today. Noting the cost savings and strategic growth made possible by moving operations to the cloud, he mentions Netflix which just announced that it was getting rid of its last data center.
“Major players such as GE and Alibaba have invested upwards of $1 billion in cloud technology,” said Korak. “Businesses are spending more money than ever on the cloud, and all signs point to continued growth in the coming years. The cloud enables companies of all sizes to transform alongside the connected world and evolve their IT infrastructure to facilitate an increasingly digitized business.”
But not everyone is convinced that we will see an all-cloud ERP future. Forrest Burnson, ERP market research associate at Software Advice, favors the hybrid cloud model in which an organization combines on-premise applications with cloud applications in its broader ERP package. He’s already seen headway in this direction by some. “For many firms, it’s the best of both worlds and it’s making the whole cloud vs. on premise debate irrelevant,” he said.
Better ERP Reporting
Improved reporting, facilitated by analytics and tighter integration, is another trend championed by Marder. He sees ERP as being uniquely placed to see an entire business system, find the weak spots and make more out of the existing resources.
“Companies are going to start demanding more out of the insights they’re given,” Marder said.
Those insights, however, don’t just appear out of nowhere. Umran Hasan, senior manager of Product Marketing at Microsoft Dynamics ERP, emphasized the importance of implementing integrated analytics. With the ERP system acting as a command-and-control point for more and more systems, it is the natural place from which businesses can glean the most from the vast amounts of data generated by their applications
“Machine learning, predictive analytics and the Internet of Things are all areas that our customers want to get more from, and their ERP system is core to enabling them to gather such information and make sense of it all for their business,” Hasan said.
Fighting ERP Tradition
ERP, it turns out, isn’t such an easy sell – especially to small and mid-sized businesses (SMBs).
Diane Haines, vice president of Product Marketing at Sage, admitted that she encounters a growing resistance to traditional ERP. Companies aren’t looking to purchase a back-office system; instead, they want something that can help them solve their problems with relatively simple solutions. That causes them to avoid traditional ERP, which some believe is synonymous with cost overrun.
This is leading to increased sales for NetSuite, Sage and cloud-based or SaaS ERP providers. For anyone who lived through 1990s-era ERP implementations, cloud-based ERP is a lot easier to market than legacy approaches. Buyers no longer buy into the old pitch that you have to completely shift your business processes to suit your ERP suite.
“When talking to mid-sized companies looking to switch systems, it is often because an existing ERP is dictating what their business can do instead of the business itself,” Haines said.
SMB ERP Adoption
The move to the cloud has led to greater SMB adoption of ERP. While this has a long way to go, John Miles, president of Enterprise Resources International, sees a gradual overcoming of resistance to ERP among small businesses. Despite its reputation for complexity, high cost and significant staff resources to keep it going, SMBs that have historically avoided ERP are manifesting less resistance.
“Although the majority of SMBs still do not understand the concept of ERP, they are beginning to realize that it is becoming the de-facto system to have in order to cut down integration costs to other packages,” Miles said.
ERP Platform Approach
The first wave of cloud adoption in ERP saw a rush to point solutions, often as a result of individual departments choosing a cloud app based on their specific requirements. The consequence for some was trying to manage multiple applications with separate databases, different user interfaces, workflows and collaboration tools. That could lead to users wrestling with multiple logins, and manual data export or import steps.
Now some say there is a move toward businesses making a strategic platform choice first, and then working with individual departments to choose applications that fit the overall platform strategy.
“This approach eliminates much of the technical complexity we’ve seen with multi-cloud deployments, sharing the common interest of handling user identity, security, single database and workflows,” said Kevin Roberts, director of Platform Technology at FinancialForce.com. “This platform-driven approach drives high levels of adoption, as well as simplifies and speeds up the implementation process.”
ERP Vendor Consolidation
Over the last decade or so, Microsoft gobbled up smaller ERP vendors such as Great Plains and Navision. Oracle and SAP also made acquisitions. And earlier this month Infor picked up GT Nexus, which is one of many acquisitions in its history. Miles sees more mergers in the near future. “Some of the big players will be swallowing some of their smaller competitors to capitalize on market share,” he said.
So it looks like we are likely to see a growing cloud ERP presence, heavier SMB buy-in, more analytics and a smaller group of ERP vendors to choose from as the field continues to thin down due to mergers.
In the next article in this series, we address ERP vendor offerings, particularly in the top tier, as well as implementation tips.
Drew Robb is a freelance writer specializing in technology and engineering. Currently living in Florida, he is originally from Scotland, where he received a degree in geology and geography from the University of Strathclyde. He is the author of Server Disk Management in a Windows Environment (CRC Press).