The Life of your ERP – There is no such thing as an “average life” of an ERP system as each company and instance is different. However, we all need a yardstick and the best thing is to look at are the drivers or reasons for change, as these can provide more definitive warning signs. The lifespan of your ERP can be anywhere from five to fifteen years with the caveat that you are going to try to eek this out for as long as possible. Not just because of the cost of change, (and the ability to amortise that cost), but the sheer disruption.
The warning signs for change;
• How well does the system meet the needs of the business and is what’s missing essential for the business?
• Is the reporting giving you what you need, or do you have to wait for IT to give you the reports you need?
• Is the speed of processing or delivery slowing you down?
• Does the business increasingly rely on spreadsheets or other systems?
• Do you no longer trust the accuracy of the data?
• Is the business changing faster than the ERP can handle?
• Is your system user unfriendly, do you rely on manual input and are integrations becoming increasingly difficult?
Sadly, if you realise any of the above it is perhaps too late as you should have made the replacement long ago. These inefficiencies can be hugely expensive to the business.
External Influences to change your ERP
External forces can also force your hand and drive a new ERP system such as;
• Regulatory changes
• M&A activity in the business or even at the vendor resulting in your ERP system no longer being supported correctly.
• New innovations delivering better functionality to new systems
ERP systems are evolving rapidly with key innovations with Artificial Intelligence (AI), Machine Learning (ML) and advances in Business Intelligence (BI), leading the charge and being adopted. AI is on the “hype curve” (Forrester phrase), and at the forefront at every tech exhibition. New AI apps are permeating every aspect of our daily lives and as such becoming an accepted technology component. It is inevitable therefore that it would seep into the core business systems such as ERP.
The core drivers of change are;
- Computing power bringing greater efficiency, performance, security, scalability and costs provided by;
- Cloud and SaaS delivery
- Accessibility through mobility
- New Features and Functionality provided by technology innovation;
- AI and ML
- BI – advances of which are facilitated by big data and power computing and brought to all end users via dashboards and user drill-down.
- Internet of Things (IoT) and industrial IoT whereby tracking and automation is optimised
- Improvements in ease of use;
- Augmented reality and virtual reality
- Easier compliance and structure provided by;
- Low code and no-code platforms that can surround the core ERP with structured processes and citizen development of add-ons
ERP Innovations Survey – https://community.technologyevaluation.com/surveys/erp-experts-survey-2019/results/erp-technology-trends/trends-technologies-impacting-erp
The above listed innovations will have an impact on ERP going forward, but some are making their presence known already.
Artificial Intelligence – ERP vendors are beginning to unlock the potential of incorporating AI into the core ERP. Greater insights can be gained, interactions can be streamlined and perhaps the most obvious benefit is the improvements in data interpretation and trend analysis to produce more accurate and varied modelling. Accessibility to that data is also improved through voice, text, graphics and ways in which the results are presented to users.
Business Intelligence – insightful, accurate, well-presented information, extracted with ease from your ERP system and interpreted in a meaningful way, is the cornerstone of good decision-making. Modern BI goes beyond spreadsheet calculations and laborious data gathering; offering easy access, data modelling and radical new ways to visualise the data. Dashboards have developed into a visual pane of glass where users can easily drill down to extract and understand trends or granular details of the data.
IoT – connecting things to the internet and tracking via sensors and objects enables the collection of valuable data and this is increasingly adopted in manufacturing and distribution. Products, equipment and durables can be identified, analysed and optimised – correcting defects, checking performance and managing quality without manual intervention.
Low code, no-code and other Business Process Management tools– the new wave of citizen developer is using no-code or low-code business process mapping to automate and structure business processes. These tools provide the backbone (and visual aids), to build compliance into the steps or sequences. There is a plethora of such tools available in market today; low code enabling the more technical designer to add or change code, whereas no code for those who need a structure business process developed without the need to write any code. These provide the average user with the tools to design and execute processes – transforming manual, paper heavy systems, with an automated one. Forms are completed online, emails sent automatically, and authority gained to complete the cycle or steps required. These solutions are often used in parallel to the core ERP, providing structure to the peripheral processes.
The ERP advances are cool; they are keeping pace with general technology innovations for the first time in decades. And as such making a real difference in solving problems and optimising business performance. Changing your ERP was always considered radical and there are ways to elongate the useful life of your current system. However, the radical and the new are accompanied by some significant benefits, superior performance, enhanced user experience and some massive strides in functionality which can’t be ignored forever.