Enterprise Resource Planning (ERP) is one of the least glamourous aspects of business computing – so much so that even the analysts assigned to cover the sector are happy to admit that not much of interest has happened to it in the last fifteen years. However, it deserves more attention than it gets. After all, most large companies would be literally unable to operate without their ERP systems, and the transactions they process represent the very backbone of global trade and commerce.
The quantity, velocity and importance of the data involved mean that improvements to ERP have the potential to be transformative, but the complexity and robustness of the systems means that changes are not easy to make. However, one of the most interesting points made at Gartner Symposium was that, for the first time in many years, genuine change in ERP technology is imminent. For companies that are able to apply innovations effectively, this offers the potential to gain real competitive advantage.
These changes are being driven by two technological innovations. One of those is cloud computing. As more and more of the ‘peripheral’ aspects of ERP technology – HR, Payroll, invoicing etc. – migrate to the cloud, companies’ ERP infrastructures are coming to be composed of a ‘suite of suites’, where CIOs choose the best-of-breed solution for each of their specific requirements, and then tie these loosely together, to share data as appropriate. That means that business leaders will be able to build systems much more closely tailored to the business model of their organisation.
The other important innovation is in-memory computing and, more pertinently, the increased use of hardware capable of taking advantage of it. Many commentators talk up the possibilities offered by ‘real-time’ insight but in truth, most business analysis requires time for a trend to develop and become noticeable, and most businesses find it difficult to make operational changes in real time. In most cases, hourly or overnight batch-based processing is just as useful. A much more powerful application of in-memory computing is being able to perform a near-instant reforecast using complete data sets. That facilitates ‘what-if’ scenario analysis during meetings, which can be a genuine game-changer for those making strategic decisions about the company.
The missing piece of the puzzle is the analysis that can actually drive those decisions. That still requires a carefully constructed mathematical model of the business, and visualisations that can easily isolate exceptions and anomalies, while at the same time affording a clear picture of the business across all key dimensions. The fragmentation of ERP technologies means that, in future, such analysis could be implemented as a layer of the ERP system itself, or as part of a loose federation of technologies that fulfil the functions of contemporary ERP systems. The companies that gain real value from these impending changes will be those that choose analytics technologies that can answer the fundamental questions underlying the strategic goals of the business.