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Posts Tagged ‘ERP Trends’

erp_pic3A report we came across recently, based on a survey of ERP buyers, revealed a number of trends gaining momentum in 2016.  A few worthy of note included…

Increasing adoption of ERP systems among small and mid-size organizations.  Newer ERP systems, including SaaS options, along with the latest mobile technologies, have put business management software within the grasp of virtually any business today, thereby negating the edge once held by the larger, more tech-savvy industrial firms.  Gone are the days of multi-million dollar ERP implementations.  Today’s company can get started for a figure in the thousands to tens of thousands, easily.

High profile lawsuits expose the causes of ERP failures.  There have been some pretty high-profile ERP failures over the years.  (There have also been many more great successes.)  The record shows that the failures are much less failures of technology, and much more failures of sound strategic planning, organizational change management, well-scoped process analysis, misaligned (or unrealistic) expectations between provider and consumer, pure communications, or unrealistic budgets and timeframes.

“Best of breed” makes a comeback.  For several years, standalone ERP systems with little integration to other systems were much in fashion.  But the increasing ubiquity of systems that hook out to the rest of the world has made that approach a more viable alternative.  These core systems don’t – in and of themselves – try to be all things to all people.  Instead, they focus on the core ERP functionality, and then let others with vertical expertise provide certified and well-integrated extensions that truly do enable them to become “best of breed” instead of “one-size-fits-all” solutions.

ERP project recover becomes a skill set.  Lots of ERP installations ‘go south.’  Deeply knowledgeable implementers with appropriate domain experience can unravel what went wrong, and where, and then recover with the steps necessary to do the job right the second time.  It requires strong domain experience and unique skill sets that can get to the root(s) of the problem, and rebuild, implement and train users from there.

Customization becomes more accepted by the mainstream.  The word ‘customizations’ used to terrify CEOs, CFOs and other execs.  But the fact is, about 90% of all implementations (according to a 2015 survey by Panorama Consulting) are (and must be) customized to some degree to meet business requirements.   But today’s tools make it a lot less risky to do so.  With an experienced provider, customizations and modifications can be executed and tested safely and made to fit each client’s unique needs – all with a minimum of operational risk.  Just be sure you’re dealing with someone with domain and customization experience.

These are a few of the most recent, growing trends in the world of ERP, as the increasing breadth of software and technologies bring it within range of nearly every business today.

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2015-erp-trendsLike all software, ERP evolves.  Recently, some folks at a firm called Compare Business Products compiled a few trends for 2015 culled from sources including Gartner Research and ComputerWorld, among others.  A few we thought worth highlighting follow.

  • Consolidation – Increasingly, enterprise applications seem to be covering more ground. What once were largely “accounting” systems have evolved to include CRM (Customer Relationship Management), SCM (Supply Chain Management) and BI (Business Intelligence), among others.  This trend only continues to grow as suites become more powerful and all-encompassing of the functionality required to run today’s more sophisticated enterprise.
  • Social Media – A trend we’re beginning to see, as ERP goes Social. Microsoft is among several companies exploring the potential.  While some may underplay the importance of social media, there is much to be gained from the type of customer engagement and retention that comes from social media integration.  CRM experts tell us that “social media data related to customers and to products is essential to understanding customer preferences and product improvement.”
  • Cloud vs. On-Premises – A recent Gartner survey found that only 2% of ERP buyers had moved to the cloud. Those whose answers ranged from Next 3 years… to 3 to 5 years… to 5 to 10 years… to “not likely” comprised a whopping 79%.  Another 17% said they “can’t say.”  Not a lot of traction for cloud at least for now and into the near-future according to those results.
  • Going Vertical – The trend to become more industry-specific continues to grow. If you’re in healthcare, you buy software made for that sector – whether it consists of a single suite of modules or (more likely) the addition of 3rd party enhancements to a base package.  The same is true of manufacturing.  There’s no need to write a bill of materials or a configurator when you can purchase such functionality off the shelf.
  • Buyer Education and Preparation – Buyers have come to understand that implementing ERP successfully is not easy. As a result, they’re more educated about their solutions.  Senior executives have learned that simply turning over responsibility to mid-level employees just doesn’t work.  There is a growing realization that clients must take ownership of their own systems, and not just rely on their consultants to make them run.  Likewise, areas including business process (and workflow) analysis and organizational change management are starting to be given the respect they deserve.  This will lead to better implementations overall.  (To which we and other implementers say: It can’t happen too soon.)

Other trends cited included increase mobility… the impact of the Internet of Things… and the larger tier vendors – who by now have sold all the systems they possibly can to large companies – continue their efforts to try to woo the small to midsize business customer.

You can register to download a copy of CBP’s “Top 8 Trends for ERP in 2015” here.

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Panorama_9_TrendsIn our preceding post we listed 5 of the 9 trends that Panorama Consulting in a recent white paper described as likely developments in the ongoing development of ERP systems and the needs of the customers who buy them.  Their full report can be downloaded here.

In today’s concluding post we’ll look at their last four predicted trends…

6. ERP vendors will offer flexible deployment options. This basically means the ability to choose among methods by which to deploy and use your system.  We’ll increasingly see opportunities to choose from – or switch from – cloud and/or on-premise systems.  The fast-start, agile and low-cost-of-entry cloud solutions can get a company up and running quickly.  On the other hand, on-premise systems are typically more robust, much more customizable and, particularly for manufacturers – a more complete solution.  Clients will want both options, as well as scalability and timing options (like for adding users).  Vendors will need to deliver multiple options.

7. Best-of-breed and two-tier solutions will regain popularity. Single ERP systems aren’t always the best solution for all firms.  Sometimes, two-tiered, or best-of-breed, or even more than one solution is the right solution.  As integration among systems becomes easier and more common, it makes sense to use specialized systems to run, say, the warehouse, and then integrate that back to the ERP accounting system, even when they’re not from the same vendor.  It’s about finding the right fit for your  Vendors who can provide such one-stop-shopping solutions will best serve their clients’ best interests.

8. Experienced, independent ERP consultants will be in high demand. Vendors with no direct software affiliation will gain favor.  It’s worth noting that Panorama itself is one of these firms, and thus might be guilty of a little bias here.  Then again, our own firm – which provides a variety of solutions from multiple ERP vendors – can be guilty of our own, similar bias.  Either way, the point is: a vendor offering a solution from just one software vendor is more likely to be like the “hammer” that views everything in the world as a nail.  Whether the consultant is truly vendor-independent, or multi-dependent, clients will be able to take advantage of these consultants’ expertise from their independent or “multi-lingual” viewpoints.

9. Implementations will be all about business. Forget features/benefits.  Forget “technology.” (Remember when the most important thing about an ERP system was that it ran under Windows?)  The real issue is (and in our views always has been) about the business.  Business processes… workflows… strategy… competitive advantages… turning data into information and turning information into the ability to make well thought out business decisions – these are the things that truly matter.  Or should.  As Panorama points out, “the real winners will be the ones that force their ERP implementations to fit in the context of their overall business vision and goals.”  Focus on business process reengineering, organizational change management and benefits realization – that’s where the real, biggest and longest-term ROI will always be found.

We think the folks at Panorama have done a pretty fair job of predicting ERP’s future.  What do you think…?

 

 

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panorama_PicPanorama Consulting, a Colorado-based consulting firm specializing in larger ERP implementations, often does research and writing on ERP that is applicable to the business world as a whole, including our marketplace of small- to mid-size businesses.  In a recent white paper entitled “20/20 Panoramic View of the ERP Industry” they’ve identified 9 trends in business/technology that they believe will shape the ERP industry – and thus the companies who buy ERP solutions.

In our next two posts, we’ll share some of their views and predictions, beginning with these…

  1. The “consumerization of IT” trend will reach ERP systems. With so many younger workers entering the workforce, do you really believe that today’s Facebook, Instagram and Twitter users – the always connected generation – will long tolerate the old “green screen” and AS/400 style of computing paradigms in their daily work?  Not likely.  Attractive user interfaces that more resemble today’s consumer technologies, along with simpler functionality and quick access to critical business information are likely to become increasingly prevalent.  And it is estimated that today’s “Millenials” will be 46% of the workforce by 2020.
  2. Mobility will go mainstream. While talk about Software-as-a-Service and cloud technologies are all the buzz lately, the real change is being seen in the use of mobile devices.  Phones, tablets and handhelds – from the warehouse to the front office – will eventually become more prevalent than desktop PCs.  Here again, younger users’ familiarity with phones and handheld devices will push the trend forward.  And with a trend towards more part-time, mobile and contract employees (it is said there will be more of these types of workers than there will be full-time workers by 2020) – the need for mobile ERP software can only be expected to grow.
  3. Businesses will focus on business intelligence, big data and analytics. This trend is already in motion.  After years of collecting data, companies are moving toward deeper analysis of it.  This takes today’s simple, static business reports to a whole new level of dashboards, drill-downs and business intelligence.  Most ERP systems today already include tools for this type of both ad hoc and more complex analysis.  Of course, users will need to learn how to use these tools, but that’s coming as well through a greater implementation emphasis on user training.
  4. The ERP software “suite” will be built one solution at a time. ERP buyers are often faced with a choice between complete “suites” of software that purport to address all their needs, and more narrowly focused solutions.  This is often characterized as a one-size-fits-all versus best-of-breed contest.  Cloud versus on-premise is one flavor of this theme: cloud solutions tending to fit the one-size model, versus the depth and robustness (and customization capabilities) of a dedicated, on-premise ERP solution.
  5. Organizations will finally embrace organizational change management. This has always been a challenge confronting ERP implementers and clients alike.  A change in system is the perfect time to revisit all your processes and make changes accordingly.  It’s too often easier said than done, or lip service is paid to it.  Recently though, Panorama found that organizational change was the top reason that ERP projects went over schedule (i.e. late).    The suggestion is that companies are actually focusing on this important issue (thus delaying projects).  As well, we can see “technology” being much less the issue (as opposed to how things were in the pre-Y2K days) as the tech issues alone reach a point of diminishing returns.  In their place, less tangible issues like organizational change management are increasing becoming “the primary differentiators between companies that succeed in their ERP implementations and the ones that fail,” according to Panorama’s report.

In our next post, we’ll look at their remaining conclusions.  Stay tuned…

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