on September 13, 2021
This week – ERP gets a new direction, via a shove from best-of-breed players. The future of hybrid work is up for grabs, as vendors jockey for position. Strained supply chains test us, and high-risk AI systems spark debate. In the whiffs section, I take issue with a remote work report.
Lead story – ERP’s new direction – it’s coming from the outside
Brian sees a bounty of ERP innovations coming. But here’s the big ol’ catch: they might not be coming from ERP vendors:
While technologies like AI/ML and RPA have been around for a while, the power and ease of use for these has improved dramatically in recent time. It’s now common to find solutions built on modern platforms. The new tech stack within these means that users can:
- Develop new white space apps with no- or low-code tools.
- Develop these apps without IT help.
- Integrate a growing number and type of databases to these tools.
While “AI/ML” might conjure up sexy new features, Brian makes another key point. Many benefits are eminently practical:
These tools can shave days/weeks out of approval timeframes. They can rescue accounting, HR and other users from the tedium of dealing with repetitive events (eg, processing employee paid time off requests). And possibly one of the more important benefits comes from identifying new, non-standard or unfamiliar events that warrant human scrutiny or concern.
Brian goes on to cite specifics, from Automation Anywhere to Workato (process automation) to OneStream (AI-enabled EPM/CPM) to Auditoria (finance RPA). The question is: where does this leave ERP vendors? What is their play here? Brian urges a “rethinking” of ERP and makes the ring-fence argument for CXOs: “I have yet to meet a CEO, CFO or CIO who wants to upgrade or replace their ERP software unless there’s simply no choice.”
Needless to say, ERP vendors cannot just sit on their collective behinds and cheer on these new solutions. If ring-fencing prevails as the dominant transformation model, the so-called “ERP back office” will eventually wither into cloud application workloads, as specialist cloud vendors break off more and more chunks (example: cloud-based CPQ engines). Instead of losing market share quickly via “rip and replace,” ERP vendors would therefore shrink over time, and lose even more boardroom relevance.
I believe the future of ERP, if there is one, is deep/rich verticals – a cloud industry backbone, if you will, NOT a back office (this may sound bloody obvious but remember, ERP became entrenched as a [mostly] horizontal play). Now ERP must become a logistical backbone (err, platform, plus community plus industry experts) that plays quite nicely with whatever third party tools the business wants – and plugs into whatever native AI or data platform the ERP vendor provides (or else their robust APIs). Does that sound like many ERP vendors you know today? I can think of a couple…
At any rate, Brian is putting ERP vendors on notice here. He’s not wrong.