As 2019 looms larger on the calendar, it’s easy to forget what the great Hall of Fame catcher Yogi Berra said about looking ahead: “It’s tough to make predictions, especially about the future.” Even still, as an ERP software licensing and litigation attorney who has worked in the field for more than a decade, I see six key trends emerging that are likely to make an impact on ERP developers and users during the coming year.
1 – ERP Arrives on The Shop Floor. For manufacturers, ERP has been used largely as an accounting, inventory control and HR tool, with some functions aiding production in the factory almost as an add-on. But as businesses become increasingly competitive, it’s likely that we will see ERP becoming more integrated with the overall manufacturing process. It will enable shop floor personnel to access instructions, conduct inspections, manage other systems and feed all of this data into the office.
2 – Separate Systems for Subsidiaries. For much of its history, companies tried to manage an entire business, deploying the same ERP system for all subsidiaries and locations. Software as a Service (SaaS) and the cloud are changing this. Even midsized companies either are replacing a legacy system or installing a new system piecemeal: Using customized ERP software systems tailored to the specific needs of a sub rather than rolling it out everywhere all at once. But complicating this are security and compliance needs. Mapping these considerations across individual field operations can be complex from a managerial standpoint as well as network performance.
3 – Disruptors Become Serious Players. As recently as a few years ago, giants such as Oracle, SAP and Infor were the only real ERP game in town. But developers such as Financial Force and Kenady – each founded within the past decade – are building ERP systems in the cloud using Salesforce’s CRM as a platform and employing SaaS. This makes their offering more attractive to many businesses because they already have a Salesforce CRM system installed and putting it in the cloud means buyers do not have to invest in servers. And data visualization seems to be easier with these new systems. But the downside is that there are unanswered questions about security.
4 – The Impact of AI. While still in its infancy, Artificial Intelligence will likely start being included in the design of the more sophisticated ERP software systems. Why? Because AI will enable the program to anticipate potential problems before they become massive headaches, alerting managers so they can adjust the various functions that ERP is controlling before the trouble is raging out of control.
5 – IoT and ERP. Whether someone actually needs their clothes dryer plugged into the internet is a valid discussion, but for ERP, the Internet of Things allows more data to be funneled into the system. It will provide companies with enhanced oversight of their supply chain, shipping partners and customer inventory to greatly improve decision-making.
6 –Digital Marketing Affects ERP. With 2.7-billion social media users around the world, new ERP systems will find a way to incorporate data links from across a number of platforms to remain competitive. Sites such as Facebook, Twitter and Instagram have altered how many businesses operate. ERP will track social media to uncover shifting consumer preferences to factor the information into everything from ordering components and inventory control to dispatching finished goods to areas where a consumer product is “hot.”
If even half of these predictions come true in 2019, it will mean prompt changes in everything from an ERP system’s back-end performance to the features that are most-likely to be customer-focused. This will impact how users specify their requirements in an RFP and how developers build the platform.
It will also make the contracts even more complex than they are now, creating another reason to reject the template an ERP sales rep will want you to sign. As an ERP contract negotiating and drafting lawyer, I know how precise the document needs to be to avoid what I often have called “ERP train wrecks.”
To achieve this, customers will need to know precisely what sort of data is expected from the ERP system and how they will use it to improve the company’s operation. Only if these objectives are understood clearly will users of ERP systems be able to understand the myriad features that the developers are bringing to the market.