Gartner: integration is the main challenge of postmodern ERP
Posted by Ryan Gloeckler
The historic development of computing can be characterized as a jellyfish: waves of centralization follow decentralization and back again. From central mainframe computing in the 80s to decentralized PC’s and servers in the 90s, the worldwide centralized system we called the Internet, back to fragmented decentralized mobile apps and devices in recent years.
For ERP, cloud computing in the mobile era is what is often referred to as postmodern ERP. By nature, ERP is a monolithic centralized system. Thanks to the popularity of mobile devices and the cloud, postmodern ERP allows vendors to offer more fragmented and hence more relevant functionalities to its end-users. In other words: some users only require access to timesheets and expenses, while others need to make use of the financial system, project planning or reporting.
While fragmentation is a blessing for the end-user, it imposes a challenge on IT. According to a recent Gartner report, nine out of ten organizations will lack an application integration strategy in 2018, which may result in ‘integration disorder, greater complexity and cost’.
According to Carol Hardcastle, vice president research at Gartner, ‘organizations need to resist the temptation to succumb to pressure from business leaders to get started before the enterprise is really ready (and without a business-agreed ERP strategy). Business leaders must understand what it will take to ensure success.’ The responsibility for this, she continues, does not lie solely with end-user organizations that lack the experience and expertise to avoid many of the pitfalls: ‘System integrator (SI) and ERP vendors have to be accountable to their customers in this respect’.
Gartner touches an essential point here. Without a proper cloud and application integration strategy no cloud ERP project will be successful. Although vendors have been quick to deliver post-modern ERP systems, all too often they are losing sight of the customer who expects simpler solutions delivered on time, on budget. The entire organization needs to be bought into the chosen cloud and ERP strategy at the outset.
The biggest problem as Gartner pointed to recently is that post-modern ERP systems often lack the ability to integrate well with other software. They deliver a one size fits all mentality assuming customization is a bad thing, but failing to meet industry-specific requirements that give their customers competitive edge. Especially among services organizations, this is critical to achieve industry differentiation. Traditional ERP was designed and optimized for production environments, including its topical processes and workflows. Services organizations face entirely different challenges and thus have different needs when it comes to business software.
When deciding on a cloud and ERP strategy for the future, these organizations are best advised to find a vendor that is flexible on cloud deployment and one that offers a fit for purpose solution that enables integrations as defined by the customer. And remember, there are many vendors in the cloud arena that tie customers to a single platform. Customers should think first about their own ‘platform’ strategy and find a vendor that will bend to them.