Johannesburg, 17 Jun 2021
The future of enterprise resource planning (ERP) integrated solutions are partitioning. There is a proliferation of applications and software as a service (SaaS) products that have shifted customers’ thinking from always obtaining a best of suite product to now obtaining what is considered a more necessary best of breed product.
This is not only evident in the way customers are purchasing products, but is also evident in the way ERP solutions are being designed. Customers are considering clustered solutions and clustered options, which relates to the agility that organisations require.
Legacy ERP systems and the challenges they currently bring to organisations is in fact forcing organisations to opt for partitioning between the different functions within the ERP solution. Partitioning is where we are going and is the future of ERP from an integrated solutions point of view.
ERP and the digital organisation
The digital transformation organisations are going through, coupled with the normal changes that come from organisational growth and development is impacting the requirements they demand from their ERP solutions. They need their ERP system to move through to the next level of maturity and move onwards from a traditional System of Record to a Systems of Differentiation and the ultimate goal of being an ERP System of Innovation.
The ERP system is no longer just a System of Record that is sitting at the bottom, it is actually moving up the digital pace layer because of external factors. The digital cycle of moving from actions to outcomes, data to insight and from insight back into action has sped up and the ERP system is being forced to participate in that cycle.
It is about using all the tools the ERP system has available to enable you to make business decisions quicker.
Changing business requirements
How changing business requirements are adding to the 'evolvement' of ERP again brings us back to my earlier point of the impact of people. There are two schools. One is the business that appoints traditional leaders who believe in securing that core, making sure that core is protected and only then will it look at how to change the business.
The other school stems from millennials and the advent of the new age leader. These are individuals who are simply a younger generation that has grown up in the current times and are impacting differently on the work environment in large-scale businesses.
Traditionally agility was associated with the size of the organisation, but the way that ERP solutions are being clustered into point solutions is affording even large organisations to change direction at a much quicker pace. ERP systems have become integral to the way organisations run businesses.
People - technology - adoption
One of the key challenges organisations have to take note of today is people. People have always been a challenge in terms of adoption and the way ERP solutions are now being designed takes people into account and as a result, brings us back to partitioning again and how ERP systems transformation is impacted by the people who use them.
Take social media, for instance: millennials are going to be the next workforce, with maybe 20-years left of the current generation in the workforce. After that there’s not going to be anybody in this environment that comes from Gen X or Baby Boomers and everyone is going to be millennials and for them, everything is about being always connected. That level of connectivity and the ability to make business decisions in real-time anywhere is having a massive impact on how these ERP solutions are being designed, and that is driven by the users, the people.
In the past, the way these systems were designed and why they were designed was around streamlining the action or the output as the primary function, with the user interface being secondary. Whereas now, that has shifted and those outputs are not going to come if the usability is not improved.
The cloud has definitely helped in terms of addressing some of the integration challenges. When we start looking at clustered solutions as opposed to a unity system of its birth, cloud technology has gone a far and long way to address some of those integration challenges. Cloud has improved the flexibility in the ERP space.
Mobility and cloud go hand in hand and the need for real-time in-the-moment decision-making and action has become critical, especially for resources in the field, far from the city. That resource needs to make a decision right away for the overall good of the business, customer experience and retention included. Making that possible through an integrated ERP system and giving employees that power in their hands is what organisations have to strive for.
From an AI point of view, the cloud ERP platform serves as an always learning knowledge system as everything is recorded and it is bringing the two worlds of what’s happening on the shop floor and what is happening at the top floor together and bridging that gap. Decisions can be made from vast amounts of data in a shorter time.
For data first organisations or data-driven enterprises, as some call it, ERP systems are core and that System of Record function is never going to go away. It is simply being asked to do more. The data-driven organisation is required to make decisions based on facts and available information and not on opinions and emotions, and that is exactly what the System of Record function provides; it contains every single piece of information that is related to your business and your organisation and will assist in making decisions quicker.
There will, without a shadow of a doubt, be further evolution in ERP systems and in their function. The function has already changed and now the form is changing. If we simply look at the fourth industrial revolution (4IR), there will be a definite impact on how ERP solutions will look like and function in the future.
Key modules
What ‘modules’ are needed for an effective ERP solution will depend on the organisation, but you have core modules and your key ones are Finance and Accounting, as you need to understand why we are doing what we are doing and how that impacts on the business.
As an example, Altron Karabina is in the professional services industry, so we will run an ERP system to manage projects and would need to understand the utilisation of our resources and how we are billing time. We will therefore look at project costing as a core module.
ERP system consumerisation
The impact that millennials have on the way systems are being designed, has an impact on how they are being 'consumerised'. It is driven from how it resembles technology that a consumer would use and would know how to use.
Today, the employee or user of the ERP system does not care about how the technology in the background works. They are not tech specialists but are, in a basic sense, a consumer using technology to do something. As long as they are able to do the job they are required to do, with an envisioned outcome in mind, they are happy and productive. They simply require the technology to be quick and easy to use. They do not have to understand how it works. The technology is simply allowing an employee to move from solving a particular problem to getting them to now solve multiple problems at the same time.
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