Cape Town, 23 Apr 2015
Prognostication always comes with its risks, including the chances of being completely wrong, like the apocryphal "there is a world market for maybe five computers" made by IBM's Thomas Watson in the 1940s.
However, when it comes to enterprise resource planning (ERP) software, there are trends emerging which tend to provide compelling glimpses into what the future may look like. These trends are the force of cloud computing and the emergence of ERP solutions delivered as mobile apps, says Alan Sher, director of HansaWorld South Africa.
Let's take a step back first and have a very quick look at where ERP has come from. Traditionally, this is the big kahuna of business software. That means expensive, as in very, very expensive, complex, and dependent on costly, specialised hardware. In short, ERP was the preserve of enterprises, as indicated by the very name of these solutions.
The emergence of cloud computing and the subsequent alignment of the many planets that allow cloud applications to work for any business (including the development of services providers like Amazon Web Services, improvement of connectivity and a reduction in its cost, and the establishment of appropriate security measures) suddenly means enterprise applications no longer have to cost a mint. It has changed the deployment window completely, with project time-frames substantially compressed. With maintenance and updates taking place on the server side, end-users no longer have to carry this cost for their individual deployment.
And what of the app? Apps have taken the mobile world by storm, and some ERP vendors have realised that the principles of ERP software aren't bound by scale. Little businesses need good processes and software to run well just as much as big businesses do. As a result, app-based ERP suites are emerging which allow the smallest of businesses to get under way with software that can, ultimately, grow all the way with that company should it hit the big time (and perhaps hitting the big time is more likely for businesses that are well run from the start).
That's one side of it. Of course, the 'traditional' ERP vendors haven't disappeared, not by any means...but have they taken note?
Many of them have; over the past decade, a noticeable trend of the big vendors coming down market has emerged. No longer are the tier one solution providers addressing the big multinationals only; instead, they have steadily sought to target small and medium businesses, too.
But it's just not as easy as all that. Legacy applications developed for on-site deployment often cannot simply be rejiggered for the cloud. They can't easily be made to work through browsers, as cloud applications do. Porting them into an app of a couple of megabytes and which can be downloaded onto an iPhone or Android tablet just isn't possible, in many instances.
This leaves the 'traditional' vendors in an interesting space. On the one hand, the cloud is becoming an almost de facto way of doing things. Especially for new businesses, it means the ability to access applications and services at almost ridiculously low cost and with minimal capital outlay; that in turn contributes to better run businesses - so, going cloud becomes a no-brainer. But on the other hand, the traditional vendors have solutions which just aren't cloud ready.
That means a lot of them are scrambling to sort out their product portfolios. These vendors aren't oblivious to what is going on and they are doing something about it - after all, if they don't, they could start to see market share slipping and their futures compromised.
Ultimately, the market decides. With cloud and apps taking the market by storm, it is fairly safe to anticipate the ERP vendor space moving inexorably in that direction.
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