A good friend of mine recently became CIO of a financial services firm and was given his first major system challenge this month: make the complete accounting, financial and third-party loan provider data and applications available 24/7 on any iPad or Android-based tablet. He’s been given six months to make this happen.
Another CIO of a major A&D manufacturer I know wants vendors to challenge him more to get greater value from his investments with them. He’s also been given the task of revamping accounting and financial systems by October 2012, and they just started last year. He tells me the days of using ERP to just passively run reports are also numbered.
Considering these two extremes—the young CIO who is just starting out and has been given the challenge of bringing state-of-the-art financial applications to mobile platforms, and the seasoned CIO who must revamp an entire accounting and financial management system in ten months—a series of predictions for 2012 emerge. Instead of playing it safe, I’ve decided to reach on these to make them more interesting, fun and hopefully thought-provoking as well:
Streamlined, intuitive usability of social networks will lead to ERP getting an extreme makeover in 2012 in an effort to drive up system adoption. While strides are being made in this area today, there is still a long way to go until the usability of ERP application suites approaches those of the most popular SaaS-based CRM, supply chain systems and social networks. For CIOs, this is a big win since they can satisfy the wants of many internal departments and customers with a graphical interface upgrade without having to completely replace systems. Look for this to be a major focus area of all ERP vendors in 2012 and a strategy for keeping long-standing systems in place and safely under maintenance for at least a few more years if not more.
Rapid implementations become the new normal. The pressure on the new CIO of a financial services company to deliver a new series of Apple iPad and Android-compatible integrations within six months or less and the pressure to make an entirely new accounting and finance system work in an A&D firm by October 2012 are glimpses into the new normal. Accuracy, speed and quickness with perfect implementations are what the new expectations are based on. ERP implementation timeframes will drastically shrink in 2012, with greater pressure on system integrators and professional services to meet or beat deadlines.
ERP mobility will be a dominant force from the shop floor to each sales call where quotes, orders and contracts deliver real-time order and pricing updates. How a given manufacturer chooses to sell is even more important than what they sell in many industries. Equipping manufacturing, quality assurance, production scheduling, procurement and sales to have immediate data on what’s going on with orders, customers and suppliers is critical. For the sales and service teams, real-time data is the fuel they run on. There’s a chronic time shortage in many, many companies right now, and bringing greater ERP mobility from the shop floor to the sales call will increasingly be seen as a means to lessen the time crunch. 2012 is the year where mobility gets real across the enterprise with solid performance numbers being generated as a result. For companies with large sales forces and service organizations, integrating to key ERP systems to gain real-time data will quickly lead to increased sales and higher gross margins on service and warranty repairs.
Depth and quality of applications, data and legacy integration on mobile devices including tablets will emerge as the new enterprise bling. The iPad is a badge of analytical and executive honor in the financial services industry—the technological equivalent of the corner office with the million-dollar view and mahogany furniture. My good friend who just became a CIO was unsure of just who was a VP or C-level executive during his first staff meeting. He quickly realized the more worn the iPad and case, the more senior the executive. The expectations on him are very high for having real-time updates on a series of benchmarks that the senior management team uses to manage their many businesses on mobile platforms by June.
Cloud-based ERP in the enterprise and highly targeted verticals will flourish and face moderate growth in small and medium businesses (SMBs). Convincing as the arguments are for SMBs to adopt SaaS-based ERP, this will continue to be slower in adoption than enterprises and highly targeted vertical markets. Enterprises will continue to adopt SaaS-based applications to replace legacy, high-maintenance and often marginally effective systems in use today.
Analytics and Business Intelligence (BI) will become the fuel that drives cultural change away from siloed decisions to more collaborative ones. Given how tight the time schedules are for every IT department I’ve visited and know of, the luxury of allowing one set of dashboards and metrics to just measure a single process or silo are gone (or will be in 2012 completely). Little tolerance or patience on the part of CIOs is now commonplace when it comes to esoteric, single-centered dashboards and metrics. The good news is that dashboards are extremely easy to create now, especially on top of Microsoft-based analytics and databases. That’s also part of the bad news too. Dashboards are proliferating and are often used to define a given department’s agenda without focusing on shared outcomes. In 2012, this will change as dashboards and metrics that measure collaboration become required for continued investment.
Template-driven implementations will become more commonplace in the mid-market. For many enterprises in the mid-tier of the market, there’s going to be much more of a focus on getting up and running quickly and less on tailoring every possible customization option in an ERP module or entirely new system. Template-driven implementations will also become commonplace in cloud-based ERP systems and solution packages sold to vertical market industries. The good news is that implementation timeframes will drop. The bad news is that not so much customization means potentially inflexible systems. Common areas where this strategy will be used are project management and scheduling, business performance management, contract lifecycle management, product lifecycle management, program management, project-based supply chain management and service lifecycle management. These templates will be especially useful in industries where compliance is critical to passing government audits, for example in the pharmaceutical industry.
Value-based measurements of ERP will become more commonplace. Given how much pressure there is on CIOs to show how investments in IT are paying off, value-based measurements will become even more commonplace in 2012 than they are today. The challenge of isolating just which aspect of an enterprise system delivered cost reductions or revenue gains is an area of ongoing debate in many companies. These value-based measurements provide a structure for determining just how much of a contribution ERP investments are making or not.
Highly specialized ERP platforms will accelerate system adoption and value and will transform manufacturers in the process. Look for Microsoft, Oracle, SAP and others to create world-class alliances and partnerships that are focused on creating highly specialized ERP platforms that will disrupt the existing enterprise software product development, selling and service models.
Bottom line: More collaborative use of analytics, adoption of mobile ERP applications primarily in sales and service and shortened implementation timeframes all show just how time-constrained enterprises are right now. Enterprises are in search of systems that will help alleviate the time shortages that nearly every one of them is facing today.
What are your thoughts on these predictions and the future of ERP? Please comment below.