ERP Trends for 2019

The year 2019 has already started and it is time to anticipate what the customers will want from ERP as well as what vendors are going to provide.

Introduction
As we enter 2019, the focus has shifted to #DigitalTransformation and ERP is just one of the components, albeit a key one, in the overall IT / Digital strategy of the Organization. The explosion of new technologies and the focus on Industry 4.0 has upended the digital strategy. From an incremental technology upgrade as the Organizational Digital Strategy, the CIOs of the future are exposed to a plethora of technologies, each promising the moon. The information availability and requirement has exploded and ERP, which used to be the information repository of the Organization of yore, now finds itself wanting in many areas.

Cloud, which was considered to be the growth catalyst for ERP and the next phase of ERP Consolidation, strangely faces the opposite effect. Freed from the shackles of having to manage multiple custom applications to handle different business areas, Organizations are looking at various niche cloud applications that can meet the requirement of specific business area. The advantage is that these applications are much easier to integrate with newer technologies and they are highly cost competitive compared to traditional ERP. In this phase of fragmentation of business solution, ERP finds itself in an enviable position of being a lumbering elephant who is slow to adapt.

2019 looks interesting from ERP perspective. Here are the few trends that I expect will drive the ERP market in the coming year.

1. ERP will lose it role as the technology backbone: ERP software came as a response to the fragmented technology landscape of the early century. Companies had disparate systems handling various business requirements. You could see disparate Financials System, Procurement Systems / solutions, Order fulfillment systems, Inventory handling systems, budgeting systems, planning system, all working in the same organization. Each of these systems could be using different technologies. Some of them might have been COTS solutions, while others could have been custom solutions.

There was a need to integrate the multiple applications and technologies and make sense out of this jungle of applications. That was the original brief for ERP. It arrived with the promise of a being a single solution that handled all the core business processes of the Organization. 

As we enter 2019 we are again witnessing a plethora of technology solutions that dote the Organizational landscape. Jargons like AI, RPA, ML, IoT, Data Strategy, Microservices are all getting thrown at CIOs face. ERP is one more application that they are having to content with. In this flux, the primacy of ERP as the technology 'backbone' is being questioned. With cloud becoming a norm, fragmented systems providing different business solutions could become the norm.

2. Improved User Experience:  In addition we are seeing the arrival of new set of users who are technology savvy and expect much more from their Systems than what traditional ERP can provide. They do not care to log in to the system every time the want to access the system. They would rather download the ERP app and stay connected to the application till they want to log out of the system. Earlier 'Log in' was optional and 'Log Out' was mandatory and automatic once you closed the computer. In the new mobility paradigm, both 'Log In'  and 'Log Out' have become optional. This is a major change and ERPs are having to adapt to this 24 hour connected world. In addition, these new breed of users expect significantly improved User Experience from their ERP applications. Seamless transition from Uber as they hire a taxi to ERP as they review and approve that Purchase Order in ERP is the new expectation. ERPs will have to understand this reality and adjust to it. 

3. Arrival of new breed of user community: Along with the user expectation, the user profile of the new breed of users has significantly changed in the last 20 years. Their communication requirements of  are different from that of the earlier generation. The new breed of users are social media savvy. For them collaboration through sharing of text, data and content are the norm rather than the exception. Traditionally ERPs have been weak on collaboration. Their way of sharing a PO is to take a printout, sign, scan and then upload it as an attachment. The new breed of users expect ERP to provide  Embedded scanning and sharing features, to mention a simple example. ERPs will have to adapt to and work with SMAC (Social, Mobile, Analytics and Cloud) technologies

4. Embedded features: I remember those days when implementing an ERP system meant rolling out the core applications and helping the customer with the first month close in ERP and getting the project sign off. If the customer wanted analytics, they had to pay additional for the product and for the consulting effort to integrate the product to ERP. In the current paradigm, customer expects analytics and mobility to be embedded in the application. And they also expect the system integrator to implement these applications and show demonstrable results before they sign off on the ERP Project. Especially with the arrival of cloud, Organizations are demanding that the 'i' applications (iProcurement, iSupplier) and advanced analytics are embedded in the ERP applications. ERP Vendors will have to live with the new reality.

5. Hybrid Cloud: In their research report in 2017, Forrester research had identified that SaaS applications, both pure play as well as hybrid, are going to be the norm rather than the exception. As we enter 2019, that prediction is proving correct. More and more Organizations are going to cloud. That is the plus. However, cloud is not the panacea that was hoped for ten years ago when it was just a concept. Organizations are still wary of cloud and are even now taking only baby steps by moving a few non-core applications to cloud with the Core applications still remaining On Premise. ERP Vendors have assured their customers of continuing support for their On Premise applications for a the next ten years. The experience of Organizations that have moved to cloud is mixed. Many have not realized the expected cost benefits. Many organizations are not able to adapt to the continuous process changes and management oversight that a cloud transition entails. 

6. Integration: With multiple technologies expected to live with ERP, the focus will be on the integration capabilities of ERP. Integration should become intuitive, user driven and plug and play. ERPs that do not meet this challenge will lose out. 

7. Analytics and Mobility: Implementing analytics and mobility in a Traditional ERP applications is a major challenge. Installation, integration and configuration are huge issues. The CIOs of 2019 are not going to accept this complexity. The ERP application of 2019 should have embedded analytics and mobility and the features should be plug and play. OLTP (Online Transaction Processing) is no longer a big deal. It has been replaced with OLBI (Online Business Intelligence). Data entry is not the expectation. Business Intelligence and quick RoI are. 

In conclusion, while ERP still remains the Organizational Backbone, the technology landscape and the stakeholder expectations are continuously changing. The winner in this game will be the one who nimble and agile to anticipate and drive these changes.

These are the trends that I can see in the ERP Landscape as we enter 2019. What do you think?