The evolution of ERP

My history of working in large organisations spans over 25 years, with 17 years of that experience working at the cutting edge of cloud SaaS and big data solutions, where the evolution of technology has been significant.

Since its introduction in the early 90s, ERP has transformed many industries. Last year alone, the ERP industry was worth $25 billion. The manufacturing sector was an early adopter, and benefited instantly from standardised business processes across sites, resource optimisation and vastly improved supply chain visibility.

But like every other enterprise software – written for today and yesterday, not tomorrow – ERP has struggled to match the ever accelerating pace of commercial and technological change. Often, it’s succeeded, but often, it has left holes in a company’s ability to measure, plan and act. It shouldn’t be this way.

A re-think is required

ERP is a 25-year-old term. All too often, people think of ERP in terms of incremental product improvements and descriptive business intelligence. But companies are now evolving beyond the original concept of ERP towards something more all-encompassing. The old idea of ‘ERP’ is locked into connotations of a ‘buy once’ incumbent, on premise solution – even if the modern reality is more nuanced and advanced than that.

This has led to a certain amount of wariness – and weariness – with the idea and the term; it’s seen in some circles as a necessary expense, even while it delivers insight and structure that boosts many a company’s bottom line. And cost is a measurable thing: 55% of ERP deployments cost more than agreed upon, three quarters are not implemented on time and almost all (93%) require extensive customisation. Is it any wonder businesses can be wary?

Evolution

Gartner predicts that the number of connected devices will reach 25 billion by 2020 – as a result software needs to flex with the new ways organisations store, access and process their data. In short, the very idea of what an ERP is and does needs updating to accommodate the fast pace of business and technological change.

Today the subscription model is everywhere – you need only look at the popularity of streaming services like Netflix and Spotify, or the sharing economy of Uber and AirBnB. The ‘buy once’ mentality is simply a thing of the past, and this shifting consumer pattern is driving the PAYG delivery of business solutions. This achieves two things that big enterprise software platforms have struggled with in the past: the ability to react to new requirements (especially regulatory ones) and innovations quickly, and the means of only having to pay for exactly what you want to use where you want to use it.

Re-thinking the wheel

In today’s world, where the success of your business can turn on a digital dime, I have observed that businesses need solutions that evolve with them. Enterprise software needs to grow and scale to suit a business’s changing needs, providing our customers with complete control and flexibility, preparing their business for whatever comes next.

I am passionate about the evolution of ERP, and a re-think into what enterprise software can, and should be. This isn’t solely on providers – the ideal enterprise software responds to changing user needs and evolving technology. By attacking the problem at the route, and examining how it’s deployed and used we can collectively lay the foundations for the future of ERP. Is your business ready?

David Watts, VP Sage UKI Enterprise