It seems that every few years, talk emerges that ERP suites are an endangered species, one step away from punch cards. In 2000-2001 it was said that the the death knell of ERP would be the internet, outsourcing or the overall decline of IT spending at that time — take your pick.
The culprit this time? Software-as-a-service (SaaS) and service-oriented architecture (SOA).
Integration technologies like Web services and SOA make it easier to integrate disparate applications. That means that companies have less of a need for the kinds of all-in-one enterprise applications that have dominated the back office for decades and can move freely to best-of-breed applications… We could be on the verge of a sea change that will shake up the software industry.
Even vendors are sounding the alarm (at least those with a vested interest in the outcome). Bill Hewitt, CEO of Kalido, writes:
As companies look to a service-oriented future, they are beginning to consider how to integrate and migrate their current architecture. ERP vendors have stepped up their marketing on “SOA-enablement” but have done little to separate the five key layers of IT flexibility: infrastructure, information, security, applications, and the user experience. These layers evolve at different speeds, both in market development and customer deployment, and should be able to be managed independently. Systems integrators will continue to drive up billable hours by hard-wiring existing systems and calling them SOA-enabled. Until ERP vendors truly embrace the reality of a multi-platform world, organizations relying on ERP for SOA will find it impossible to take the next step.
Sure, it makes exciting copy, but does anybody really believe that ERP systems are going away any time soon? That hosted services will overturn years of implementation work and millions of dollars? This incredible investment will give ERP years of momentum, not to mention the ability of ERP vendors like Oracle to “buy innovation” if need be. The new E-Business Suite 12i is on the horizon this year, as is the Fusion suite in 2008. Both are going to be heavily SOA- and SaaS-enabled.
Talk of the death of ERP is certainly premature; perhaps we should just say ERP as we know it may be on its death bed. Let’s wait five years or so, then we’ll re-examine the diagnosis.