Thomas Wailgum while still at CIO.com put together an interesting list of Hot ERP topics for 2011.  I know I’m a bit late to the game on this article, but it’s particularly interesting to take a look at this now in the context of the hype as of late on the supposed return of ERP.   I would encourage you to read his original post (you’ll need to sign up first…).  I haven’t outlined all his arguments, and added my thoughts on what Thomas had posted;

1.    ERP Customers (Finally) Get More Selective.
Wailgum points out that there are many more options than offered by the traditional ERP vendors.  When looking at filling new capabilities, give other vendors a serious look.  I’d add to this a warning not to be fooled by the “suite-talk”.  As Doug Colbeth says; do a Gut Check before pulling the trigger on buying capabilities from the incumbent ERP vendor.

2.    On-Premise and SaaS ERP to Co-Exist in “The Cloud.”
“Legacy on-premise ERP vendors long sought to keep SaaS ERP upstarts to the fringe of business software conversations.  The incumbents lost.”
As an employee with an on-demand software vendor I may be slightly biased, but Thomas has it right.  “The “co-existence” cloud ERP strategy should be a catalyst for more choice and change in the ERP market in 2011…”. You don’t need to buy more hardware and drive huge capital costs to make a significant impact in your supply chain capabilities.  Look to on-demand vendors to provide a cheap and easy way to get the capabilities you need.

3.    ERP Implementation Failures Continue Unabated.
Wailgum blames many of the failures on lack of  “well-considered, practical and appealing change management programs”.  While I can’t argue that this is a contributing factor, we also have to look at the complexity of ERP solutions and the zealous overselling of features and benefits.  I’ve written about what to do to avoid ERP failures in my article;  What’s you tip for deploying supply chain software (and keeping your job).

4.    Oracle (ORCL) Fusion Apps to Debut with a Thud.
“Oracle’s next-generation suite of enterprise applications has had more stops and starts than a Times Square traffic light”.  According to Thomas, Oracle’s customer base is simply not looking to migrate their systems to Fusion…given the  migration and maintenance costs, can you blame them?

5.    SAP Business ByDesign: Lukewarm Reception, Then Good Reviews.
“This is the make or break year for Business ByDesign , SAP’s suite of on-demand ERP applications. ByDesign went GA in summer 2010, and SAP and its customers are still in the honeymoon period right now. “
Time will tell how successful this offering will be.

6.    ERP Licensing: More Options, More Confusion, More Gotchas.
As more ERP companies offer multiple variations on an on-demand offering, there are many more licensing options available.  I can’t say it better than Thomas did in his 2011 prediction;  “Those CIOs and companies who neglect due diligence when buying ERP software in 2011—whether going the on-premise route or moving to the cloud (or some variation on it)—will open themselves and their companies to greater risk and financial exposure. A handful of CIOs will get burned and could lose their jobs. “

7.    Midsize On-Premise ERP Vendors Get Squeezed.
Small SaaS vendors are gaining traction with medium sized customers,  Large ERP vendors are looking to move down market . The mid-market vendors are feeling pressure on both sides.   Thomas says the key is differentiation; the mid-market ERP vendors must show that they can differentiate themselves and be all things to all customers.  My take is that mid-market ERP vendors must leverage their agility to beat the larger companies to the punch.  My advice to the mid-market ERP vendors;  if you aren’t on-demand already, go…go now…don’t stop till you have your first customer on-demand.  You’ll thank me later.

8.    Mobile ERP Momentum Stalls and Falls.
While mobile apps are all the rage in the consumer space, mobile in the ERP / supply chain world needs some careful thought.  This is a classic product problem that software companies often fall prey to; you introduce a capability because it’s cool, not because it actually solves a problem.  A word of advice for would-be mobile app developers;  understand your customer.  Understand your market.  Understand the problems that need to be solved.  Then determine the best way to solve that problem.  If the best way to do this is a mobile app,  if you execute well, then your app could be a success.  If not, then Thomas has it right;  “The mobile hype for business apps in 2011 will hit a fever pitch, and too many companies will invest foolishly and without any real business strategy. The inevitable “trough of disillusionment” (thanks Gartner!) will soon follow. “

9.    Vendors Attempt to Make ERP More Like Other Consumery Apps.
Wailgum describes two ways vendors are trying to make ERP move like Consumer apps;  One way is making data more accessible through better business intelligence tools and the other is using social tools to solve business problems.
I’m all for  making ERP data more accessible.  This has been one of the key benefits of our RapidResponse product.  If however, making ERP more “consumery” means adding “social” capabilities. I’m not as sure.  I’m not saying that there is anything wrong making ERP more “social”.  Similar to the Mobile craze, my concern is that the vendor is jumping on the hype without understanding the market, the customer or the problem.  Again, if social tools can add real value (and done right, they can) and the software company implements well, the product could be a success.  If the vendor is just jumping on the hype,   well , I think Thomas puts it best; “When your vendor rep tells you his legacy financial or supply chain application is now more “Facebook-like,” just leave. Fast.”

10.    Third-Party ERP Maintenance Under the Microscope
The big ERP vendors have been charging huge dollars for support and maintenance and customers are simply not satisfied with what they are getting.   SAP and Oracle just aren’t listening to what their customers are saying;
“Oracle, SAP and others have gone to extraordinary lengths to protect their maintenance and support golden eggs even while their customers have voiced frustration and threatened revolt.“
I couldn’t agree more.  As I pointed out in my post Perpetual ERP software – a broken model?, many companies are looking for alternatives to paying the extortion-like support and maintenance costs demanded by SAP and Oracle.

11.    My ERP-Themed TV Reality Series Does Not Come to Pass.
Don’t give up so easily Thomas!  Supply chain CAN Be entertaining if you give it a chance. You can have comedy with “New Kinexions.”  You can have drama;  with “Suitemates”.  You can have variety with the “Late, Late Supply Chain show” and educational content with “Uncle Jay explains”.  All can be found here.

Now that we are into 2011, do these hot topics still resonate.  Anything new to add? Comment back and let us know.

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Tags: Enterprise resource planning (ERP), SCM, Software as a service, Supply chain
Posted in Supply chain management
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