For a product companies historically only replaced once a decade, ERP has sure changed a lot in the past few years. The new class of ERP leaders bears little resemblance with the power players of the aughties (2000s). As little as a decade ago, terms like flexible, customer-first, and easily configured would be the last things you would use to describe the rigid, monolithic platforms that existed back then.
But if you believe Gartner (and you should), you should be on the lookout for another major shift. Fundamental changes are occurring in the way people acquire new capabilities from applications, and Cloud ERP development cycles offer much faster innovation adoption, which enables delivery of greater business value. What will this mean for end users and decision makers? Even more connectivity, for starters.
The New Era of ERP: Enterprise Business Capabilities
No longer are companies implementing on-site and maintaining the integrations by themselves. They’re adopting an “ERP as a service” philosophy and becoming much more open to the idea of acquiring capabilities rather than entire applications.
The Move to Enterprise Business Capabilities
Even the past five years have shown incredible innovation and transformation in the ERP space as companies making these solutions have entered an arms race to stay ahead of each other. This era of ERP, referred to by Gartner as “enterprise business capabilities” is one in which this software enables companies—at least those who know what to look for.
But what should you look for? A recent Gartner Report asked just that, noting:
“The changing nature of ERP provides unprecedented opportunities for transformation and improvements in efficiency. Gains will only be realized if CIOs are prepared with appropriate expectations, sourcing strategies, technologies and skills.”
An Evolving Definition of ERP Platform
In the previous era of ERP, the thought of an ERP platform meant ‘a platform that covered everything.’ This evolved to the concept of postmodern ERP in the late 2010s and as we enter 2020, ERP will be used to connect an interoperable set of services designed to deliver business processes through workflows.
According to Gartner, “Organizations will shift away from self-maintenance of point-to-point integration toward adopting platform as a service (PaaS) and integration platform as a service (iPaaS). This will allow them to deliver standardized administrative and operational business capabilities through an ERP platform.”
Three Characteristics of an ERP Platform
According to Gartner, these ERP-delivered platforms will have certain characteristics:
- Platform technologies — such as low-code development and process automation — to support extension of and integration to the core ERP and/or other enterprise applications.
- A comprehensive system that supports low-code/no-code development, simplified integration and process automation.
- Integration to multiple applications running on multiple platforms in the cloud, delivered by multiple vendors. Integration capabilities will include assembly and orchestration more than they have in the past.
New Acquisition Strategies
Organizations will change the way they acquire applications. Some applications will still be purchased as they have been historically. However, organizations will also begin to construct new capabilities through various means: either from existing packaged application capabilities, or by acquiring them as services (or through a combination of each method).
Gartner Report: Unprecedented Changes in ERP Enable Transformation
If you’re looking to make the most of your ERP decision in the fourth generation of ERP, we invite you to read the entire report from Gartner. The entire report, 2020 ERP Predicts: Unprecedented Changes in ERP Enable Transformation, delivers the in-depth analysis and insight that business leaders need to make an informed decision in this new era. Written by leaders at Gartner including Mike Guay, Duy Nguyen, Denis Torii, Paul Schenck, and Tim Faith, these experts discuss:
- What to expect from the “fourth era of ERP.”
- How to use enterprise business capabilities (EBC) to your advantage.
- Which surprising decision the top four ERP vendors will make by 2025.
- What you really need to know about emerging technologies such as artificial intelligence and machine learning.
- Four things your CIO must do to ensure your ERP continues to deliver value.
Normally available only to Gartner clients, this informative new report is available for free, courtesy of Acumatica. Click here to learn more.