As this year starts to wind down, it’s helpful to reflect on the changes that have occurred in the market throughout 2017. It’s an interesting time for those acquiring and implementing new ERP systems and other enterprise software as part of their digital transformation efforts.
As you prepare for your digital transformation efforts in the coming months and years, here are a few things that summarize the state of the industry at the moment:
There is a Resurgence of Organizations Investing in Enterprise Technology
During the economic recession several years ago, companies were very risk adverse in their enterprise software investments. Past horror stories of ERP failures, tight IT budgets, and uncertain economic conditions led many CIOs to defer investments in new technology and other operational improvements. Now that the economy appears to be on the rebound, however, there appears to be long built up demand for new ERP systems and other digital investments.
In addition to demand in the US, we are seeing increasing demand for enterprise software investments in developing countries in Africa, South America, and other parts of the world. In some cases, these economies are actually growing faster than their more developed counterparts, creating strains for companies that are unable to handle this growth with their current infrastructure. This is creating further demands for back office ERP systems, as well as CRM, HCM, and other enterprise technologies.
ERP Vendors are Going Through Significant Transformations of Their Own
The many organizations about to implement new technology, are going through significant transformations and ERP vendors themselves are also experiencing their own change. Many have doubled down – and in some cases gone “all in” – on their investments in cloud ERP systems. For example, SAP’s S/4HANA, Oracle’s Cloud, and Microsoft’s Dynamics365 platforms have all made it clear that the leading vendors’ flagship products are now all cloud-based.
While this may be good news for the vendors and their investors that crave the predictable, high-margin revenue that the cloud model affords them; it isn’t all good news for buyers of this technology. These are all relatively new and less proven technologies and platforms, which are creating a good deal of uncertainty and perceived risk in the market. I don’t recall a time in recent history when the vendors were going through so much change with their core platforms.
SAP vs. Oracle Case Study
SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.
There is No One-Size-Fits All Solution in the Market
Cloud ERP systems may be the focus of ERP vendors, but they are not necessarily the right answer for all organizations. Some will find cloud solutions to be ideal for their situations. Others will find that the less-developed, less-robust, and less-flexible functionality of certain systems outweighs the benefits of a cloud-based deployment model. Among most of our global client base, we are seeing a fair amount of skepticism and disinterest in the cloud models relative to the more established on-premise counterparts.
Cloud isn’t the only example of a type of technology that doesn’t provide a one-size-fits-all solution, but it is the biggest trend right now. Buyers should beware of industry hype and generalizations that may or may not apply to them, such as agile development, SaaS, predictive analytics, and other buzzwords that vendors and industry analysts like to create. These and other advancements are interesting and should be considered, but they’re not for everyone.
More Than Ever, Digital Transformation is About People and Processes – Than Technology
Rapid evolution and advancements in technology are wonderful, but it often creates simple short-term noise that can distract you from the more important, bigger picture. At the end of the day, your transformation will succeed not because you chose the best cloud solution or the most robust technology in the market, but because you effectively addressed the people and process side of the equation.
Our broad implementation management and project recovery experience shows that effective organizational change management and business process management are much more likely to make your project succeed or fail.
This snapshot of where the industry is in 2017 should help navigate enterprise software decisions you make next year and beyond.