I hope I’m not beating a dead horse here, but can I get in another few words about the value of ERP and how it (unlike the aforementioned horse) is not dead? This week, after several chats with analysts and IT leaders I was able to safely establish that the old workhorse system is still as vital as ever. It will stay that way so long as it continues to evolve — like most systems — in the age of big data and mobility.
I even took a peek at the value of ERP going forward. But there was one thing I didn’t have a chance to hit on, and that’s the predicted place of ERP going into the 2020s. Sounds like a long way off, doesn’t it? Like around the time we should finally have our jetpacks and flying cars. Well, analyst Phil Murphy of Forrester Research couldn’t comment on possible Jetsons-style transportation innovation, but he did share a vision of the future that includes ERP.
Murphy, whose focus is business applications, agrees with industry pundits who believe that as we hit 2020, we’ll be in the golden age of software and the “frictionless enterprise.” Manufacturing provides the best illustration for the frictionless concept as businesses leave behind the old push model in favor of lean to keep up with demand. We now have the technology, through social media channels and the like, to sense demand, he said. Nike is already doing this, he added. It aggregates that demand and negotiates with manufacturers to build to it.
“If we accept that this frictionless enterprise is going to happen and that it will happen in many industries, it will need lightweight, on-demand ERP that is consumable as the frictionless enterprise needs it,” Murphy said. “[Businesses] won’t care what server this is on, or what operating system or database. They just want their applications to work, and they’re happy to pay a monthly fee. They might even be happy to start an annual contract, but they want it to be somebody else’s problem.”
In a recent report Murphy penned with colleagues on the topic of business technology in 2020, he also suggests that ERP vendors won’t sell software, they’ll house processing. In this scenario, a business would pay for an ERP capability that houses business rules and data. That information will always be the most recent and will be built to operate globally. In 2020, he predicts, there will only be a handful of ERP instances around the globe.
“I think it’s safe to say the stuff we’re consumed with today — what server are you on, what databases — in the 2020s that will be someone else’s problem,” Murphy said. “Business people don’t want to be tied down with technical jargon that doesn’t matter to them … everything we do has got to be understandable in a business context, and when it is, the wars between business and IT fall away.”
Now that sounds like a peaceful vision.