Top 8 ERP Trends for 2014
Will 2014 be the year that social ERP catches on? And what about mobile ERP? Experts offer their predictions for the coming year.
The ERP field can be slow to change. But the last couple of years have unleashed forces which are fundamentally shifting the entire area. The experts tell us some of the new and continuing trends affecting enterprise software in 2014:
Eric Kimberling, managing partner at Panorama Consulting Solutions, said mobility continues to be a big trend. Executives and employees want real-time access to information, regardless of where they are.
"Gone are the days of accessing ERP system from a single computer – now employees use phones and tablets just as much -- if not more -- than they do a computer or laptop," said Kimberling. "Vendors are finally beginning to provide compelling and secure ways for employees to accomplish this, so look for increased adoption of mobile solutions."
Zach Nelson, CEO of NetSuite, concurs. He believes that in the coming year businesses will quickly embrace mobile ERP, not just for reports and dashboards, but for conducting key business processes.
Consumerization's Impact on ERP
Jeremy Roche, president and CEO of FinancialForce.com, sees consumerization of the back office as the key trend in 2014. Traditional siloed ERP systems, he said, will be replaced with technology that is as fluid, interconnected, social and mobile as the front office has become within the last year. As a result, employees in both front and back office functions will become more closely connected to customers.
"We saw many customer-centric front office breakthroughs in 2013, but 2014 will be the year of the back office," said Roche. "With one cohesive view of multiple customer touch points, companies will be able to achieve higher customer satisfaction and make more informed business decisions, which will lead to profitable growth."
Enterprises once attempted to build an all-encompassing ERP system to take care of every aspect of organizational systems. But some expensive failures have gradually brought about a change in strategy – adopting two tiers of ERP. This could involve, for example, using Oracle or SAP as the primary system with other systems used for tier two. The second tier is often used as a platform for the latest features, such as mobile ERP. Some vendors also straddle both camps, offering one system for tier one and another for the lower tier.
"This will be the year that two-tier ERP hits its full stride as large enterprise companies that have invested heavily in cumbersome on-premise ERP rapidly turn to more agile, easily deployed systems that can be rolled out to subsidiaries and new divisions without having to rip out SAP and Oracle at headquarters," said Nelson, NetSuite's CEO. "Global system integrators such as Capgemini, Accenture and Deloitte are leading the effort."
Cloud ERP Gains Ground
The cloud has been advancing steadily into the enterprise for some time. But many ERP users have been reluctant to place the company’s crown jewels into the cloud. Those reservations have gradually been evaporating, however, as the advantages of the cloud become apparent.
"SaaS ERP takes this platform into the cloud which enables organizations to not only unite around business processes, but because data is now in the cloud it is much easier to coalesce across supplier networks and supply chains to drive greater efficiency in manufacturing projects," said Christine Hansen, product marketing manager, Epicor Software.
As cloud-based ERP has emerged, the traditional powerhouses such as Oracle, SAP and Microsoft have had to work overtime to cloud-enable their offerings -- with mixed success. Meanwhile, new entrants have emerged with various parties claiming that their offerings are "true cloud" or "more cloud" than those provided by others. As a result, there is some confusion in the market about what is and what is not a "real cloud" solution. Regardless of the confusion, many more companies will be vying for the business.
"As enterprises and companies that have not traditionally been cloud ERP customers turn to the cloud, competition in the market will increase," said Nelson. "This will require cloud ERP buyers to carefully evaluate vendors across increasingly specific industry benchmarks and standards."
Social ERP or Not So Much?
There has been much hype around social media and how important – or not -- it is to add to ERP systems. Certainly, vendors have been quick to seize the initiative, adding social media packages to their ERP systems with much fanfare. But some wonder if there is really much gain to be had by integrating social media with ERP. This could be the year when this concept comes of age or falls by the wayside.
"2014 will determine whether social can be a true ERP accessory, providing tangible value to front-line employees and management alike," Nelson said.
Taking Out the Middle Man
Traditional ERP systems for small and mid-sized manufacturers relied on a middleman to collect data using some form of data collection devices between the work centers and the database. But that may be about to change.
"2014 will see more offerings of affordable mid-market technology to skip the barcodes and clock swipes in lieu of a direct link between machine and ERP database for consumption, completions and labor updates," said Michelle Donaldson, senior business consultant at Exact Software North America.
Kimberling also called attention to major budget concerns in the coming year. He noted that customization of ERP software typically results in escalating ERP costs, particularly for the manufacturing industry. The average ERP implementation across all industries costs $9.8 million, according to Panorama, while the average manufacturing ERP implementation costs $11.4 million
A primary reason for this is the sheer complexity of manufacturing processes, which demand heavy customization. In comparison, only 6 percent of organizations implement ERP with the same level of customization as is generally required in manufacturing.
Drew Robb is a freelance writer specializing in technology and engineering. Currently living in California, he is originally from Scotland, where he received a degree in geology and geography from the University of Strathclyde. He is the author of Server Disk Management in a Windows Environment (CRC Press).