The Future of ERP Applications

Compared with even a decade ago, the ERP solutions that have become routine in corporate life today are pretty amazing. But have no doubt, they’re nothing compared with tomorrow’s. As a wise person once said, “The road to excellence is always under construction.” Likewise, the ERP solution is also “under construction”. The long-term goal is achieving more flexibility in operations.

Four crucial elements are required to achieve flexibility.

  1. Components, not modules. Historically, ERP systems have been built from interdependent modules. In the future, freestanding components will work independently, capable of integrating seamlessly with each other, with legacy systems, and third-party solutions. Why? Companies are outsourcing business functions such as logistics, human resources, and accounting in order to concentrate on areas that improve competitive advantage. They need apps that can be pulled apart, recombined, and distributed to match new outsourcing-based business models.

  2. Incremental migration, rather than massive reengineering. ERP systems have traditionally taken too long to implement. This must give way to a ready-to-go product that allows companies to migrate in easy steps, moving steadily from one deliverable to another, rather than waiting long periods for completion of a total project.

  3. Dynamic, rather than static, configuration of ERP systems. Big ERP systems that are configured once and for all are no longer acceptable. ERP components must be dynamically reconfigured to suit changing business needs. No one vendor can presume to predict accurately and precisely how its customers will work and how their processes will flow. Technically, users will be able to influence the system functionality and configuration simply by changing an underlying business logic template. Critical to such reconfigurability is the ability to create dynamic suites of applications out of best-of-breed components.

  4. Management of multiple strategic souring and partnership relationships. Rather than merely viewing the flow of processes, future ERP systems will model and monitor processes affecting the activity of the business, wherever those processes are occurring, up and down the supply chain. This is especially important in a business-to-business e-commerce environment.