fresh thinking

Transform your business with Postmodern ERPs

Soumik Roy, 19th April 2016

An Enterprise Resource Planning (ERP) tool is a software package that helps companies manage their operations. It does this by capturing, storing, interpreting and presenting data in useful formats. Through different modules, ERPs support a variety of functions, such as Human Resources, Finance and Sales. Over time, companies realized that they could use these tools to identify areas of improvement and scale-up operations more efficiently.

As demand grew, a variety of ERP packages emerged, each with its own suite of comprehensive modules, coded and packaged as proprietary solutions. Zesty ERP vendors and system integrators sold software packages comprised of a multitude of modules to companies that hoped the modules would all 'talk to each other' and 'be easy to understand and use'. That wasn't always true, and companies ended up being enslaved by an ERP megasuite, that was complicated and oftentimes eroded the efficiencies it created.

In the age of ERP megasuites, extreme 'customization' was acceptable and condoned because the software was considered a standalone system.. Unfortunately, business is rapidly changing, Nimble start-ups, sourcing data from multiple streams with proprietary systems, are outsmarting traditional businesses which find that their megasuites cant deliver to them the insights they need to respond effectively.

Some companies are looking at cloud-based ERP solutions to give their teams mobile access to information that is relevant to them. , They will be disappointed when they find that vendors and integrators struggle to provide support for legacy systems that can't talk to the new cloud-based systems.

In 2014, Gartner forecast that by 2016, the impact of cloud and emergence of postmodern ERP will relegate highly customized ERP systems to 'legacy' status. And it has. Departments are looking for solutions that work best for them - and forcing implementation against the advice of IT managers who would (now) prefer a holistic approach to their digital infrastructure.

Functions looking for a solution to a particular problem demand off-the-shelf applications. These typically work very well in the silos they're implemented in - but they present and risks. Wealth-management platforms for example, work very well independently, but are difficult to integrate with other bank systems. Failure to integrate puts the division at a disadvantage, as it misses the chance to leverage the streams of information about transactions their clients make with other departments.

The answer likely lies in a postmodern ERP. In essence, it offers the freedom to choose from a universe of applications and modules, irrespective of what software provider created them, with the confidence that they will all 'talk to each other'.

Carol Hardcastle, research vice president at Gartner explains: "Postmodern ERP represents a fundamental shift away from a single vendor megasuite toward a more loosely coupled and federated ERP environment. This new environment promises more business agility, but only if the increased complexity is recognized and addressed."

Postmodern ERPs are here. The products are available, and vendors and integrators are prepared. Are you ready for your business to transition? Tweet me your thoughts @SoumikRoy

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