ERP Innovation
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It has taken over a decade, but ERP is bumping up against its own "glass ceiling". The basic, integrated foundation for a true OMS (organization management system) is in place but there is still a long way to go. Integrating financial, HR, supply chain and manufacturing functionality and enhancing it with CRM, BI, E-Commerce and so forth has proved a formidable challenge to pull off - both for vendors and customers. And doing this while dealing with the demands for performance, reliability, scalability plus the organizational change management required to make all this happen, has been a feat.
But the future of ERP is not about software-as-service, the technology-centric issue of delivering applications as componentized web services operating within service oriented architectures. Instead, it is all about supporting the innovative organizations of the future, organizations that need to quickly adapt and align to new business models, manage continual change and innovate consistently and competitively. The future of ERP is about embracing new businesses processes including innovation and change management, about new ways of interacting with ERP through visualization and about a different kind of collaborative relationship between vendors, resellers and customers, one focused on knowledge management and the development of shared innovation capital.
The new kind of OMS that is needed to support this vision will tax the resources of the largest ERP vendors today and inevitably lead to the extinction of many tier 2/tier 3 ERP vendors who will have to go vertical/best of breed to survive. This future OMS will dig deep into its supporting infrastructure platform and mean that the choice of OMS will drive the IT platform rather than vice versa, which was so often the case in the past. A wider, deeper organizational footprint will inevitably increase vendor lock-in and demand even more resources for managing the organizational impact of implementing and upgrading the OMS.
Assessment
Ventana Research believes that the morphing of ERP into a true organization management system has many implications both for vendors and customers of ERP. Vendors must adopt more of an organizational, development-centric knowledge management attitude towards the ongoing development of ERP. It's an attitude that starts not with technology but with a better understanding of where innovative organizations are going and what they need to get them there.
Current customers must try to engage their ERP vendor on a more collaborative basis, press less for functional enhancements to current product deliverables and more for clear roadmaps that show them how their ERP vendor will support their needs, and with how that vendor will develop and execute on the innovative business models that "competing for the future" requires.
