ERP technologies have come a long way from the days of their conception. Although the concept of ERP started during 1940s, the real predecessor of the current generation ERP took shape only in the 70s. During that period, it was known as MRP and was used by large organizations only. MRP systems, initially, were used to accommodate production schedule and inventory control. Later they evolved into MRP II and MRP III and started to accommodate accounting and customer order too. With the change of hardware and software technology, a cross-enterprise software kicked off and ERP was born. The term ERP was coined during 90s, and functions such as finance, HR, accounting, and engineering were added as an extension to manufacturing. Since 2005, ERP has been available over cloud. Fast forward to 2019, ERP has not only become affordable for small and medium organizations but also added many functionalities to its core.
As organizations navigate through the fourth industrial revolution, characterized by the access to disruptive digital technologies, they are faced with the challenge to simplify complex processes, unify global operations, and support highly mobile workforce. ERP systems currently suffer from lack of flexibility. Data model complexity and poor data quality are other challenges for reporting and analytics. To combat these challenges, global enterprises would need carefully crafted strategies to transition to and benefit from the next generation ERP technologies that can be leveraged for ‘rich business experience’. They would also prepare organizations to be future-ready, tap into highly connected ecosystems, ensure agility and flexibility to take on highly uncertain global headwinds, and enable an extended enterprise with loosely coupled boundaries that can seamlessly operate anytime & anywhere. Let’s look at key aspects of next-gen ERP, which will help organizations in their future growth and ambition.
1. Public Cloud and Flexibility
While some organizations are stuck with on-premise and private cloud ERP due to security and compliance reasons, public cloud ERP is gaining traction. Organizations prefer to stay ahead of the curve by being more agile and adopting cutting-edge technologies such as artificial intelligence, machine learning, and IOT. According to research, public cloud ERP market is expected to grow more than 19 percent globally between 2017 to 2022. With the rise of public cloud providers such as AWS, Azure, and GCP, it provides cost-effective, highly flexible, and agile platform to drive growth and innovation.
2. Globalization and Accessibility
Many times, we get to hear “business is changing”, but how? In the era of globalization, the companies are quickly scrambling to get a foothold in the emerging markets. With the change in business, the need for ERP is also constantly evolving. As companies enter new markets, need to support new currencies, local rules, and global supply chain demands should be met by the out-of-the-box ERP solution. The constantly changing business environments demand the change in UI/UX to accommodate the need of the new growth markets. More user-friendly ERP systems need to cater to the global user base.
3. Mobile and Wearable Technology
As business is growing global, its employees and executives are travelling the world from one corner to another. The users need to access the ERP systems on their fingertips. ERP is something that needs to be accessed by everyone from front office to back office to business leaders. ERP access through mobile devices such as cell phones, notepads, and wearable technologies will be the main focus area 2020 onwards.
4. Real-time Decision Making
Unfortunately, organizations are still not able to figure how real-time decision making is essential for their success. Study shows that 62% of average performing organizations believe that ERP platform is important for their organizations’ success while 97% of big and successful companies believe ERP is required for their growth and success. We can shed the fear of data and use it to our advantage. Business leaders are finding competitive advantage in making real-time and dynamic decisions for optimizing the supply chain, operations, and finance transformation. ERP systems are continuously focusing on data and using it to make decisions to help organizations.
5. Automation & AI
This is the single biggest growing trend right now. Everyone in business community is excited about the application of the technology in future. Industries such as manufacturing, oil & gas, and retail are quickly embracing the smart AI-powered analytics. The potential use of IoT and machine learning in aviation and manufacturing industries is immense. Manual entry of data into ERP systems would be obsolete in future paving the path for automation. AI will make intelligent decisions based on human inputs, in a system that has vast amount of data.
What is in Store for Organizations?
While there are immense opportunities for businesses in implementing or upgrading the ERP systems in future, it requires strategy and thorough evaluation for successful transformation of the business. Organizations need to identify their objectives and shortcomings in the current system. As cloud is the future, every organization will sooner or later adopt the cloud strategy. All in all, organizations need to set the vision for their future IT systems and plan accordingly.