(Note: This post was originally published in 2014.)
Each year, we make our predictions for the ERP software industry for the following year. Sometimes we get it right and sometimes we’re off base, so it’s clearly not an easy feat to predict the future in any industry – especially one as dynamic as the enterprise software industry. However, we thought it might be interesting to think about where the industry might be in the year 2020.
Here are four predictions for the ERP software industry in 2020:
1. Consumerization of ERP systems. As new generations of employees continue to enter the workforce, we will likely see more consumerization of ERP systems to accommodate these new workers. Imagine being a 20-something who grew up with Facebook, Twitter and Instagram, then being told that you are expected to learn an archaic AS-400 based, green screen ERP system – it simply isn’t going to happen. Companies that haven’t shifted away from these types of systems will be under increased pressure to do so, and ERP vendors that still develop and support outdated user interfaces and functionality will be under even more pressure to create user-friendly and intuitive software solutions that more closely resemble consumer technologies.
2. Mobility will become mainstream. Many industry analysts like to talk about SaaS and the cloud – both of which will also likely continue to see increased adoption in coming years, but mobility will be the primary technological reality in 2020. Management, back office employees, shop floor workers, warehouse clerks and others within most enterprises will use mobile devices to access enterprise data – just as much or more so than traditional desktop access. Part of this continued trend will be due to the fact that more employees regularly use mobile devices in their personal lives and will inevitably use them to access ERP software for work if they are able to, but the other reason is more of a reflection of where the workforce is headed: more part-time, mobile and contract employees will further necessitate the need for mobile ERP software.
3. Increasing focus on business intelligence and data. This trend is already gaining much momentum, but the business intelligence movement will continue to accelerate in coming years. After years of capturing reams of transactional and strategic data throughout their enterprises via their ERP software, organizations will continue to pivot their focus to how to make sense of this data and turn it into a strategic advantage. And simple reporting won’t hack it – enterprises will demand more robust and intelligent ways to make use of this information. ERP vendors such as SAP, Oracle, Infor and others are already investing heavily in their business intelligence capabilities, so look for this trend to continue well into the future.
4. Fragmentation of ERP software. We are already seeing an uptick in clients that are not necessarily looking for full-blown ERP software, but are instead looking for 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.
It will be interesting to look back at these predictions to see which ones hit the mark and which ones are slightly off base. Based on the trends we’re seeing with our global client base and through our research on ERP best practices, these seem like the most relevant longer-term predictions for the industry.
The good news is that an effective ERP and IT strategy will help your organization navigate these and other strategic challenges that companies face when defining their longer-term ERP implementation roadmaps.