It is not an exaggeration to say that the entire fate of a business hinges on the quality of its enterprise resource planning (ERP) implementation. An ERP system not only represents a major financial investment for companies, but it also touches every essential aspect of their operations from accounting to supply chain management.
Accordingly, the costs of not properly implementing an ERP solution are substantial, with some of the most notable failures bearing multimillion-dollar price tags, as chronicled by ERP News. Recent trends in ERP development — most notably, the move to cloud ERP and the integration of relatively new technologies such as artificial intelligence (AI) — have been driven by organizations looking to ensure that their ERP solutions are less risk-prone. In other words, they’re looking for ERPs that are more cost-effective, better capable of supporting informed decision-making, and easily scalable as company operations grow.
With those considerations in mind, let’s look at some of the top trends in ERP in 2021 and beyond.
1. The ongoing rise of cloud ERP
Cloud ERP has gained significant momentum in recent years for several reasons:
- Latest and greatest functionality: Modern cloud-based ERPs always deliver the most recent features from their respective vendors, with updates arriving frequently (e.g., on a quarterly basis).
- Manageable costs: With cloud ERP, companies can move from capital expenditures to operating expenditures. This shift provides more budgetary flexibility and lets them pay for what they actually use.
- Straightforward access: As more employees go remote, cloud ERP provides the flexible access that they need. Workers don’t need to be within the four walls of the organization and can instead access applications over the internet.
- Scalability: By hosting EPR in the cloud, companies can eliminate the burden of managing and upgrading hardware and software on-premises. This newfound simplicity supports more scalable operations.
According to MarketsandMarkets, the global cloud ERP market will more than double in size between 2020 and 2025, reaching $101.1 billion in value.
2. AI comes to ERP
Artificial intelligence (AI) is changing how organizations collect, analyze, and apply their business data, so it’s not surprising that it has found a comfortable place within ERP solutions. Major use cases for AI in ERP include:
- Deeper data insights: As the amount of unstructured data that organizations generate continues to increase, AI provides a way to systematically identify patterns and surface actionable insights.
- Process automation: AI can automate a lot of otherwise tedious and time consuming tasks, such as categorizing financial information from invoices and verifying reports. This frees up time for human teams to focus on other priorities.
- Optimized scheduling: In logistics and planning, AI can play a pivotal role in determining the optimal delivery and labor schedules. A 2019 IPFS survey of 600 executives found that 40% of them intended to use AI for inventory planning.
ERP vendors are also increasingly building such capabilities directly into their solutions, saving customers the trouble of having to implement AI modules on their own.
3. Multi-tier ERP
“One ERP to rule them all” has been the traditional approach to ERP deployments, as organizations have looked to use a single ERP to serve all of their locations. However, this hasn’t always worked out well, since the specialized requirements of different business units often exceed the capabilities of a one-size-fits-all ERP solution. Moreover, the costs of continually retrofitting a single ERP for the entire business can be substantial.
An alternative approach that has become more popular over time is the multi-tier or two-tier ERP. Under this setup, an organization uses one core ERP at the corporate level and another for its various divisions and subsidiaries. This approach may involve a combination of on-premises and cloud-based ERP solutions. Gartner has highlighted the benefits of multi-tier ERP, calling it a path toward easier modernization of small and fast-growing business units.
Making the multi-tier ERP work requires tight integrations between multiple systems. As an experienced Oracle partner, Inspirage has integrated ERP, supply chain and other solutions for organizations of all kinds. Connect with our expert team to learn more about how we can guide your next project.
