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Last week I began our 20/20 Panoramic View of the ERP Industry with part one of a three-part series discussing  trends and best practices  among organizations implementing ERP software. Today, I will discuss three additional trends that will change the way organizations approach ERP projects.

By 2020, CIOs, COOs, project managers and implementation teams can expect to see the following trends:

2020 part two cycle4. Increasing fragmentation of ERP software. We are already seeing an uptick in clients that aren’t necessarily looking for full-blown ERP software but are instead looking for more low-hanging fruit associated with point solutions such as warehouse management systems, customer relationship management systems and/or human capital management systems. Part of this is due to a natural tendency for the organizational pendulum to naturally swing back and forth between single ERP software systems and multiple point solutions, as illustrated in the graphic below. The other driver is that implementing a CRM, HCM or WMS system can be lower cost, lower risk and deliver business benefits in a shorter timeframe than a full ERP system, so more companies are opting for this path of less resistance.

2020 part two number 5 graph5. Organizations will finally crack the code on organizational change management. Ever since we began publishing our annual ERP Report back in 2007, organizational change management has always been one of the biggest challenges identified by companies across the globe that had recently implemented new ERP systems. However, our 2014 ERP Report was the first time that organizational change management and training issues were identified as the hands-down top reason why ERP projects were delayed and/or ran over budget. This suggests a trend toward a focus on these important issues. To further add credibility to this argument, one only needs to consider that at some point, ERP systems will reach a point of diminishing return in terms of technological bells and whistles – meaning that “softer” issues such as organizational change management will become the primary differentiators between companies that succeed in their ERP implementations and the ones that fail.

6. Flexible deployment options from ERP vendors. Although SaaS and cloud solutions may take the cake for “Most Industry Hype,” the real winners in the future will be vendors that provide multiple options for different modules, business functions or points in 2020 part two number 6 graphtime. SaaS and cloud systems have certainly increased their market share in recent years, but the real trend is toward hybrid options and flexibility to accommodate the rapidly-changing nature of most organizations. For example, some companies want to know that they can buy an on-premise solution today, bolt on a SaaS option for certain parts of the company as it grows and move everything back to on-premise later if they choose to. ERP vendors that can provide multiple options when and where their customers need it will be the real winners in the future.

Check back next week for Part 3 of our 2020 blog series. Also be sure to download our white paper, 20/20 Panoramic View of the ERP Industry: Nine Business and Technology Trends to Watch.