Newer Technologies will come but ERPs will remain heart of Enterprise Management

The world is changing fast. New technologies are getting developed every day like Automation, the Internet of Things, Blockchain, Cloud, etc. but will they be able to displace Enterprise Resource Planning (ERP) software from its position of being central to the organization or being the heart of Enterprise Management?

As we have repeatedly mentioned that ERPs are essentially software that stores data and helps organizations digitize their workflow processes (https://mentorsunlocked.com/getting-data-right-what-the-erp-seller-does-not-say/). The competition is increasingly forcing companies to continuously evaluate their strategies and tactics and calibrate them to the changing market. ERPs have a fixed structure. Changing the data structure or the design is a time and resource intensive exercise. Integrating a new data source or automation of certain processes, based on new or changed data sources is a humungous task. The ERPs would continuously evolve as markets become more and more complex with new products, and new technologies coming in. Companies need to continuously add new types of data, and new sources of data to their database and be innovative in their analysis. The need to cut costs and reduce processing time is pushing for the automation of processes. This continuous need for acquiring data, processing, and analysis of data, and presentation of data is where most of the new technologies will contribute to improving the effectiveness of the organizations. This does not mean that ERPs will not see technical changes.

The ERPs would have their own technical upgrades and incorporate newer technologies such as blockchain. Companies are centralizing their accounting operations and moving them to low-cost countries. For example, one of the challenges companies’ faces is verifying invoices. Companies also face, problems with sharing data with each other if the software is different. Blockchain technology can resolve trust issues and make sharing of data easier. Blockchain ledgers would reduce the need for reconciliation. As the technology challenges are resolved, ERP companies would adopt these technologies.

But it is the other areas where we are seeing new technologies come in. For example, QR codes and the Internet of Things for the acquisition of data, Artificial Intelligence in the analysis of data and automation technologies for the automation of work processes.

The ERP developers & ERP consultants may like to adopt some of these technologies, especially in the area of automation and artificial intelligence but may also not like to adopt many others as they may not see them as their core business. Building different features or running many product development teams not only requires investment but also management time and effort. ERP manufacturers will always pick and choose the technologies they want to incorporate into their products. This would also mean that they would keep their interfaces flexible so that newer technologies can be integrated with them or interact with them, for example, data acquisition.

Companies have started adopting the Internet of Things to acquire data. For example, a dairy company in India has implemented a solution where it takes data from weighing balances to know its collections. Most ERPs have already integrated technologies such as integrating data from biometric readers, bar code readers, and QR code readers. Similarly, ERPs developers & ERP consultants have traditionally not been interested in the presentation of data. That space has been occupied by vendors who specialize in Business Intelligence tools. Microsoft now has incorporated Business Intelligence tools in its ERP D365.

The last piece in the puzzle is hosting data and safeguarding it. Unlike past, it is very difficult to have closed loops with data stored in-house where people can access data only from their desktops. With companies going global and increased mobility of the staff, companies want their employees to have access to data on their mobile devices. This has increased the need for data to be hosted on the cloud, for products to prevent hacking of data.

Cloud will increasingly host most of the applications to meet the mobility requirements of the company. However, providing ERP as a SaaS-based product is a challenge. It would be a challenge to build software that is completely configurable and does not require customization at all. Going forward, the companies would have to look for an ecosystem of technologies. Based on their growth plans, the companies would not only have to look at how well the ERP suits their needs but also how well it works with other technologies. ERP Software also need to evolve to be future ready.