What is the due date for an ERP system?

An effect of the pandemic we have experienced during 2020-2021 is a dramatic increase of initiatives to speed up the pace of digitalization and investments in business accounting systems. From a rather shaky start in the beginning of 2020, the year was ended with all-time high for many of the business accounting system vendors and their implementation partners. And 2021 has begun as 2021 ended.

One of the major systems affected by the investments is the classic ERP system. A system that over time has been praised for being an enabler for business development as well as been criticized for being a hinder for the company’s change. Discussions regarding ERP systems often lead to emotional expressions from people with different experiences and views on the topic.

We at HerbertNathan & Co daily meet organizations considering replacement of their existing ERP system as a part of their digitalization journey. And what the customer often seeks can be summarized as something “modern, flexible, future-proof and preferably cloud-based”. What this actually means is a bit more difficult for the customers to explain and often the explanation ends up in the fact that the existing ERP system is perceived to have become “old”.

 

What the customers lack in their current ERP systems

What, then, do the customers point to when they perceive the system as old? Among the criteria that are mentioned during the discussions are:

  • Limitations to role-base the system according to its user groups and users
  • Limitations to change the user interface, screens and hide unnecessary information
  • Limitations to access the database from external applications to import / export data
  • Limitations to access the system from any browser or mobile device
  • Limitations to change the business logic beyond the traditional parameters of the system
  • Limitations to create new process flows and change as the business processes change
  • Limitations to integrate with other applications or without consulting support
  • Limitations to upgrade more often than once per year
  • Limitations to retrieve relevant information for analysis without using external reporting tools
  • Limitations to perform analysis in real time without having to run constant background jobs
  • Lack of range of external apps or ready-made interfaces to connect apps
  • Lack of initiatives from the system vendor regarding Machine learning and AI
  • Lack of initiatives from the system vendor regarding predictive analyzes and analysis support

 

Much of the above can be summarized under the key words “Freedom and flexibility”. Most of the traditional functions used daily are considered by customers as butter and bread and are expected to just exist. For the future, they are instead looking for systems that are open for change.

More and more organizations are experiencing that we are moving from large and extensive one-off projects to instead constant change with many small and parallel initiatives. And it is in the light of this that one should consider the choice of ERP system. Is it just a “tool” used daily for a specific task or should it also be an enabler for continuous business development and improvement?

The ERP system phenomenon will continue for some time but with the meaning of “Enterprise Resource Platform” instead of “Enterprise Resource Planning”. At the same time, the landscape around the ERP system is changing and opening up. Most organizations we meet today are looking for flexibility by being able to combine several applications and avoiding creating a dependency on a single system vendor or a single system. An open platform and architecture create the flexibility that tomorrow’s business needs.