At Project One, we are working with many of our customers to drive the shaping and implementation of back-end system and shared services transformation, often utilising the latest in Enterprise Resource Planning (ERP) technology.
As part of our work helping our customers to select the best solutions and realise the benefits they need, we see and hear how ERP implementations and technology is evolving. Here are our top five examples of the trends we recognise moving forward.
5 trends to look out for
#1 The first trend is the continued move to best of breed solutions and increased connectivity where we see customers implementing multiple solutions, each the best fit to the relevant area, rather than one overall monolithic ERP solution trying to solve all problems. In this way, an ERP solution is now an integrated eco-system of ERP and other applications.
This is potentially more complex to design and definitely needs a very well-thought through strategy and systems architecture at the outset. However, this increase in an ecosystem approach – multiple platforms from multiple suppliers, can then allow an incremental transformation, with the benefit of allowing smaller, more appealing chunks of up-front funding, earlier delivery of value, and smaller, more easily controlled phases of delivery. This has the benefit of aligning more to an agile delivery approach and can spread the ongoing delivery and support risk across multiple products, rather than having all eggs in one basket.
With the ongoing market consolidation of products, this might not necessarily mean going to more than one product vendor. For example, if you are implementing SAP S/4HANA, the HR processes could be in SuccessFactors and P2P in Ariba, all staying in the SAP world, driven by the SAP roadmap and strategy.
Multiple, best of breed solutions lead to an associated trend of increased integrations and interconnectivity. Better integration of back-end ERP and front-line manufacturing systems, for example linking online orders and inventory management, can drive more end-to-end process efficiency. This trend is driving ERP vendors to embrace more of an Application Programming Interface (API) approach; opening out the product interfaces to allow for easier connectivity.
Increased interconnectivity also runs alongside the ‘internet of things’ (IoT) trend, allowing ERP solutions to connect with digital solutions in supply chain and manufacturing environments, for example, mobile scanners and smart conveyers in warehouses.
The final aspect of best of breed that we see within our larger, often global customers, is the development of a two-tier ERP strategy – a core corporate level and then lower-level solutions for business units/geographies. This can be cheaper than forcing the corporate solutions to fit all units, it also gives more flexibility and customisation for the units, especially for rapidly growing or very acquisitive businesses.
#2 The second trend is far from new, but an ongoing move to cloud-based solutions. The on-premise versus cloud debate that we have seen in recent years is really now over. Any future ERP programmes will be using cloud solutions. Even some of our most cautious, conservative customers are now pushing a cloud ERP implementation , and some of the limitations around security of solution have now been sufficiently addressed.
The benefits of cloud have already been seen with increased flexibility and cost efficiency; removing the need for on-premise data centres and giving more efficient scaling options. New benefits are also emerging, with cloud facilitating increasing levels of collaborations, as global teams can access information seamlessly, and better access for remote working, allowing for alignment to future working trends and on-going cost savings.
There are still significant risks to understand and manage – cloud does not mean fewer risks, just different risks that still need mitigation. For example, understanding the locations of the data centres that host the service; in today’s increasingly uncertain world, the geopolitical risks need to be actively considered. Are you happy to host your most critical business application in a “non-aligned” country?
#3 The third trend is the increasing influence of automation and AI on ERP solution landscapes. Alongside adoption of cloud and digital solutions, automation is a trend that has been growing rapidly. This is now extending into hyper-automation, encompassing an end-to-end approach across all business processes, utilising multiple solutions to automate as much of a business as possible. ERP systems are therefore increasingly in scope of this type of transformation, moving to no-touch transactional processing. This can come from robotic process automation or low code automation tools plugging into ERP solutions.
Included in this trend is the integration of AI into ERP transactional processes and analytical reporting. AI will allow analysis of huge amounts of data in real time to drive better decision making, finding patterns and optimised solutions and it will help to automate repetitive tasks and allow users to focus on more value adding activity to help business growth. This will drive more predictive analytics to assess what may happen in the future, e.g. to predict when machinery maintenance may be required based on past performance. The other associated trend in this area is the integration of blockchain technology for increased security and transparency of transactions.
#4 The fourth trend we see is the drive for ever better user experience. There have been significant improvements in this area in recent years, for example with the introduction of Fiori applications within SAP. However, ERP user experiences are still not on a par with the levels customers now experience in their every-day lives, for example with online retail and banking applications.
The ongoing user experience trend will focus on personalisation, mobile use and more general ease of use. On the go access to key data and metrics is especially important in large scale environments, for example in an airport, to drive improved productivity and efficiency.
#5 The final trend is around ongoing enhanced functionality, including ESG requirements. Product vendors are ploughing huge investment into their latest product features and more efficient tools and processes will continue to emerge, across all areas of Finance, Supply Chain and other areas. This will help organisations to better manage their resources and overall optimise cost. Better financial planning and reporting will allow organisations to make better data-driven decisions.
ERP solutions also increasingly have the capability to measure ESG targets and sustainability measures, allowing baseline measures and continuous improvement, and to optimise for sustainability, driving customer choices of manufacturing to drive the most sustainable answer.
Alongside these future trends, the age-old challenges of ERP implementations remain. Set-up effective programme governance; ensure the right level of sponsorship; manage the change as a business change programme not just an IT implementation; instil a real focus on scope and make sure you select the right partners. Our Project One team really understand how to deal with these challenges, so if you are embarking on an ERP-based transformation, please get in touch with firstname.lastname@example.org.
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