From the obvious to the outrageous, predictions often span a very wide spectrum at the beginning of every year. In enterprise software in general and ERP specifically, there are many safe harbors to dock predictions in—from broad industry consolidation to Oracle buying more companies or the inexorable advances of cloud computing and SaaS platforms in ERP today, which is always cited in enterprise software predictions.
Too often predictions gravitate too much toward economics, overly simplified industry dynamics and technologies, leaving out the most critical element: customers as people, not just transactions. So instead of repeating what many other industry analysts, observers and pundits have said, I am predicting only the customer side of ERP advances in the next 12 months.
The following are my predictions for ERP in 2013:
The accelerating, chaotic pace of change driven by customers will force the majority of Fortune 500 companies to reconsider and refine their ERP and enterprise computing strategies. Social, mobile and cloud computing are combining to provide customers with a more acuity and articulation of what their preferences, needs and wants are. The majority of ERP systems installed today aren’t designed for managing the growing variation and pace of change in customer requirements and needs. In the next 12 months, this trend will force the majority of Fortune 500 companies to re-evaluate their current ERP systems when it becomes clear that their existing ERP systems are slowing them down too much.
Highest-performing CIOs will rejuvenate monolithic, dated ERP systems and make them agile and customer-focused, while at the same time, excelling at change management. There are CIOs who can handle both of these challenging tasks, and the future belongs to those who can fluidly move between them quickly. In 12 months, a group of CIOs will emerge who have done this, delivering significant gains to gross margins and profitability in their companies as a result.
Quality ratings of ERP systems by internal customers will become commonplace, including 360-degree feedback on ERP performance. This is overdue in many companies, and it takes a courageous CIO and senior management staff to value feedback on how their ERP systems are performing. In the most courageous companies, within 12 months, the results of these internal surveys will be posted on bulletin boards in IT and throughout IT services departments. For some companies, this will be the first time IT staff members have a very clear sense of just what internal customers need, how they are being served and what needs to be done to improve business performance.
ERP systems built on a strong foundation of personas or a clear definition of customers and their roles will overtake those built just on features alone. This is already happening and it will accelerate as featured-based ERP systems can’t easily be modified to reflect the fast-changing nature of personas and roles in organizations. The quickest way to determine if a given ERP system launching in the next 12 months will succeed or not is asking what personas it is based on and why.
Customers push speed and responsiveness from a “nice to have” to a “must have” as advances in mobility platforms and integration make real-time possible. If there is one unifying need across the personas of customers an ERP system must strive to serve it is improving responsiveness and speed. The same also holds true within enterprise today. It would be fascinating to look at the data and information latency differences between market leaders in the airline business for example. Customers will push accuracy, speed and precision up on the enterprise computing agenda of many companies this year. Speed really is the new feature.
What were once considered ERP-based operations bottlenecks will be shown to be a lack of customer insight. Take for example the very rapid product lifecycles in retailing. At first glance, slower sales are attributed to not having the right mix of products in stores, which is a classic supply chain problem. But customer-driven ERP systems will tell retailers a different story, showing how product selection, even suppliers, are no longer pertinent to their customer bases’ needs. More customer-centric ERP systems will help retailers overcome costly and difficult-to-recover-from bottlenecks in their operations.
Enterprises clinging to monolithic, inflexible ERP systems need to re-evaluate how their enterprise computing strategies are serving their customers before their competitors do.