Next-Generation ERP — What It Is and Why It Matters
Five Hallmarks of Next-Gen ERP Applications
Most legacy enterprise resource planning (ERP) can trace their roots to applications rooted in the 1990s. While vendors have rebranded and re-marketed them, and added some new functionality, it’s hard to hide that the technology predates the digital age. These applications are slow, can’t scale, force users to adapt their workflows, lack mobile capabilities, and simply don’t possess the agility needed to handle the complexities of the digital world we live in.
It’s time for a new breed of ERP equipped to take on this brave new world. It’s time for Next Generation ERP – aka Fourth-Era ERP or the Digital Operations Platform.
What is Next Gen ERP and why does it matter? In this, the first in a series exploring the topic, we help define terms, identify five core next-gen capabilities, and challenge you to begin planning your move.
ERP — then and now
Early in the 1990s, existing MRP applications began to include finance and accounting components in their mix — rebranding the bundle as ERP. ERP grew quickly, with adoption rates accelerating as Y2K approached and companies worried if their programs could make the transition from a two-digit date field to four. (Most did just fine, by the way.) Throughout the early 2000s, ERP became the center of business strategy for many organizations.
Applications that we refer to as Next Gen ERP (Gartner refers to them as fourth era ERP and Forrester uses the term Digital Operations Platform) came into the spotlight more recently. Next Gen ERP represents a more radical shift — one that extends the application’s functionality outside the enterprise — into a wider ecosystem that can include customers and suppliers, partners, competitors and stakeholders. So, what makes an ERP Next Gen?
Five hallmarks of Next Gen ERP
There’s no definitive set of credentials needed to join the Next Gen ERP club, but we’ve identified five hallmarks we think are essential in the digital age. We’ll take a look at each one in more detail in upcoming posts.
1. Business Intelligence: Tools that support a data-powered operation across every department and location.
2. Enhanced Workflows: Smart workflows and process automation that reduce or eliminate manual touchpoints and keep tasks on target.
3. Flexible Commerce: Tools to help your business transact the way your customers and business partners want, including eCommerce, EDI, subscription options, and customer/vendor portals.
4. Platform Ecosystem & Globalization: Technology to help your organization complete in a global marketplace, including flexible deployment options and multi-language support.
5. Global/Scalable Financial Functionality: Capabilities that support growth at a global scale including multi-company, multi-currency, and multi-book plus advanced reporting and analysis functions.
Why Next Gen now?
You may be thinking, my ERP is working just fine, why should I consider updating to a Next Gen ERP solution?
There are many good reasons to make the switch, but perhaps the most compelling reason is that it’s likely your competitors already have. Gartner predicts that by 2023, 65% of companies will use ERP applications that can be categorized as fourth-era or Next Gen. It’s time to begin planning your organization’s move, or you risk being outperformed by more nimble competitors.
Legacy ERP systems don’t meet many of the needs of modern enterprises operating in a rapid-evolving technology ecosystem. They’re not adaptive or intelligent enough. They don’t support streamlined remote access, require too many manual touchpoints and workarounds, nor do they provide the deep insight necessary for strategic decision making.
Conversely, Next Gen ERP applications are built on modern technology that is easy to work with and simple to maintain. They offer capabilities that allow an organization to scale operations efficiently, without adding more administrative personnel. They harness vast amounts of vital business data and allow you to query and present that data for faster and better decision making. In addition, Next Gen ERP applications support and advance your relationships with customers and business partners. And they support global operations and continued growth.
If your organization is considering a generational shift in its ERP strategy, we would welcome the opportunity to assist you in selecting and unleashing the best solution for your needs. In the meantime, join us for this continuing series detailing the power of Next Gen Business Management Software.