The last few years have proven to be a time of evolution and change for ERP systems. Cloud computing, software as a service (SaaS), mobile technologies, social media and business intelligence are just a few examples of the trends affecting the ERP software marketplace. This changing landscape makes for an exciting — if potentially confusing — time to purchase ERP software.
Industry analysts and journalists have written a great deal about these trends and others over the last several years. However, the buzz surrounding these trends sometimes leads me to a two-part question: 1) are the adoption rates of these trends as meaningful as the hype surrounding them, and 2) what other ERP system trends and functionality are not being covered by industry analysts and journalists, but might help our client base improve their business operations?
In addition to the usual buzzwords like convergence of ERP and social media, SaaS ERP, and mobile ERP, below are some additional things that ERP systems provide in the future to help our clients more effectively adopt new technologies and deliver measurable business benefits:
1. Convergence of business and ERP technology. While all the buzz and hype seems to focus on the convergence of social media and traditional ERP systems, the focus should be on the convergence of business and ERP software. Business and operational needs should be driving the evolution of ERP software rather than consumer trends like Facebook and Twitter. Employees may like the look and feel of social media, and there certainly is a place for social media in most businesses, but it should not dictate the backbone of your organization’s operations. Instead, look at your organization’s core competencies and competitive advantages, and then determine the type of system that will best enable those operational needs. This convergence is a key aspect of Panorama’s ERP selection methodology.
2. Automation of organizational change management. If it sounds like a tongue in cheek statement, that’s because it is. No matter what cool technologies or implementation accelerators you adopt, there is no substitute or automated process for organizational change management. In fact, most credible research, including our own 2012 ERP Report, highlights organizational change as one of the most important determinants of ERP success or failure. In addition, the rapid rate of technological change is putting more pressure on the human and soft aspects of ERP initiatives. Until we can automate the programming of human brains and behavior, organizational change management will remain the single most challenging part of any ERP implementation. Panorama provides extensive organizational change management services to augment the technical aspects of our clients’ ERP implementations.
3. Recognition that ERP best practices don’t exist. A common selling point for ERP systems is the holy grail of “best practices.” Implement a new system, let the software dictate the business processes to be adopted by your operations, and voila, you’ve adopted best practices. ERP vendors such as SAP are very effective at this sort of sales spin – and it’s exactly what most CFOs and CIOs want to hear – but the reality is that they don’t exist. What are best practices to one company or one software solution may not be best practice for your organization. So instead, it is important to define your processes, what they need to look like to support your business going forward, and select and implement the ERP software that best fits that model. This is where business process management and blueprinting becomes a critical component of your ERP implementation.
Technology trends and hype will come and go, but the above are the three things that I would most like to see from ERP systems now and in the future. The coolest technologies and buzzwords won’t matter if organizations don’t find better ways to integrate their business and technology initiatives, more effectively navigate the ERP implementation failure points related to organizational change management, and learn that alleged best practices are no substitute for business process design.
What do you think? Is there any functionality you’d like to see offered in enterprise systems in the future? Let us know in the comments.
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Kudos Eric – you are so right about the road to success. We can confirm, based on 32 years in the industry that success for our clients was driven by employing change manage techniques and process re-engineering. The software is only a tool, like a hammer is for building a house. But the hammer does not over come a poor architectual design. We love your articles – keep up the good work!
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Eric,
Although its an interesting article,and I too think there is far more hype around the cloud than actual dollars being spent and ROI occuring, the title is misleading.
What made me want to read this from your newletter seems to not really be mentioned in the article.
Other than saying that Social media sounds good but doesn’t necessarily need to be in ERP software, I didn’t see any true wish list.
Just as an example, some things I’d like to see in my ‘perfect world’ view of erp: Fully integrated load packing and routing solutions as part of a base shipping solution for companies that deliver with their own vehicles, or the ability to use Facebook like conversations around internal customers & contacts in the ERP system, or for so many of today’s solutions having to be cobbled together clumps of disparate 3rd party solutions, or for multiple cloud options from different vendors to truly integrate with each other and on-premise as many on-premise systems do.
I don’t see anything like that in the article. Perhaps it should have been titled, “Why Best Practices sound good, but aren’t necessarily to the benefit of YOUR company”,. or “Social Media and ERP software, What are the convergence options?”
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Great write-up on this topic. We believe that the road ahead is found in model driven automation of the software ERP systems themselves. Visual automation will allow for continuous change driven by the real needs of business professionals and not programmers per se. If you can imagine a house that comes with a living blueprint, whereby the house changes in real time as you change the blueprint and vice versa, you can imagine the future of ERP systems. The key is automation of more than 90% of the tedious and repetitive routines found in building and maintaining enterprise systems, yet allowing for custom code where it belongs (which is <5% of a system).
Information systems development should be driven by business specialists, and this can only happen through automation that is visually driven and embedded through the entire stack, bottom up.
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