ERP evolution requires integration, modularity

Changing demands spur enterprise resource planning refresh, which include designing software to be more integrated with other systems and modular to meet various business needs, analysts say.

The enterprise resource planning (ERP) software market might take longer than other software segments to evolve, but recent innovations have resulted in such programs being more integrated with other enterprise systems and more modular to suit different business needs, analysts note.

Derek Singleton, ERP analyst at Software Advice, noted that ERP tends to evolve more slowly than software such as customer relationship management (CRM). The last wave of innovation was seen more than a decade ago, brought on by fears of the Y2K bug.

Today, there is an impetus to modernize ERP software to adapt to market trends again, but on a smaller scale, he noted.

Charles King, principal analyst at research firm Pund-IT, added that ERP is coming back in favor because the complex, standalone services deployed a decade or so ago have become outmoded and require significant updating and replacing.

Cloud for efficiency, cost-effectiveness
Beyond a software refresh, trends such as cloud computing, mobile and social media have all made an impact on how ERP programs are designed and utilized, according to Damien See, senior industry analyst for ICT practice at Frost & Sullivan.

These trends have influenced and created new needs within organizations and ERP vendors will be addressing these as they evolve their offerings, he added.

Cloud computing, for one, has encouraged most IT systems and databases to be designed in a modular fashion, he said. This allows easier integration of various ERP functionalities across different user groups within one organization.

King concurred, noting that companies are increasingly pressured to justify their IT projects and expenditure, and this has led to more organizations to demand for ERP offerings--which looks after processes such as expense management and employment performance management--in order to achieve improved efficiencies and cost containment.

The desire for greater efficiency and cost effectiveness has resulted in ERP software integrated more tightly with other critical business processes, he added. This can take the shape of services resource planning (SRP)--combining ERP, CRM and professional services automation (PSA)--which helps companies manage and accelerate "bid to bill" workflow lifecycles of complex applications, King pointed out.

In alignment with this added focus on costs, more enterprise customers are also turning to cloud-based ERP offerings and moving away from self-managed deployments to improve their efficiency and lower IT expenditure, the analyst added.

Social, mobile for ease and access
See also noted that ERP implementations almost always come packaged with some elements of social media currently, such as group discussion, instant messaging and user forums. These, he said, were practically non-existent earlier on.

As for mobile technologies, vendors have recognized that more workers are bringing their mobile devices into the work place and, as such, ERP applications have to be designed to cater for accessibility beyond desktops and laptops to endpoints such as smartphones and tablets, he said.

Singleton highlighted that ERP will inevitably be impacted by the proliferation of mobile apps, too. He observed there is currently a focus on building an ecosystem of ERP apps that can run with native functionality on mobile platforms such as iOS and Android.

Both traditional and newer ERP vendors such as SAP, Microsoft, and NetSuite are also actively building app stores to provide mobile access to ERP data, he added.

That said, ERP vendors still have much work to do to match up with users' expectations, said Singleton.

"End users [have been] spoilt by the rapid pace of progress on mobile and the Web. They want Facebook-style easy user interfaces and access to their software anytime, anywhere," he noted.

However, since enterprise apps are not as advanced in terms of user experience, Singleton predicted this will be the next focus area for most vendors to deliver on.