Welcome to the world of pervasive ERP

This is a guest blogpost by Claus Jepsen, chief technology officer, Unit4

For decades now, users of enterprise resource planning software have been trained to believe that all the action must take place within the core of the system. ERP is coded to be the journal of record, the beating heart of the organisation, the inner circle of work and the user’s role is to browse and input.

But I’m here to tell you this approach will soon be ancient history. Why? Because the maturing of a potpourri of technologies including cloud, microservices, smarter user experiences, AI, machine learning and open APIs mean that we’re entering a new period where users will no longer be asked to slog through roundabout processes, complex user interfaces, or logging in and out of systems, none of which work the same ways as the others.

ERPs have tended to be digital slabs: monolithic one-stop shops, largely dumb and entirely dependent on the data provided by their operators. They only know what we tell them and making them effective takes lots of manual, time-consuming work. The Covid-19 pandemic brought this reality into even sharper relief as entire organisations scrambled to remote working models and demanded far more agile and responsive applications.

If anything good can come of this pandemic from a work and IT perspective I might venture to say Covid-19 has been the tipping point, which will see us move away from that old world of ERP. For the user, this is a big departure, because no longer will they have to search through complicated rows, columns and tables to find what they need to action, then remember the right code to assign their responses.

Instead, in the age of savvy ERP, the brave new world will be a two-way street. If an issue needs to be addressed, the user will receive a targeted message with the specific information they need to resolve it. ERP will tap machine learning and historical records of interactions to make decisions, be prescriptive and only require the user to sign off and approve proposed actions and processes where necessary. Small task-centric apps will grab the information the user needs from the core ERP and proffer a simple web-based form to enable the user to fill in missing information. What once was monolithic becomes federated and layered with small code sets working cooperatively and with ERPs becoming extensible and more lightweight. In other words, the ERP will be willing assistant to the user who is liberated from drudge work.

As IDC has described it this radical change will enable enterprises to build ‘digital innovation factories’ and by 2025, nearly two thirds of enterprises will be prolific software producers with code deployed daily, over 90% of apps cloud native, 80% of code externally sourced, and 1.6 times more developers than today.

How is this revolution possible? Through a combination of automation to accelerate processes, a deep understanding of context and with the GraphQL open source data querying language to inspect and interrogate queries in a more focused manner than has been possible in the past.

A world of opportunity for CIOs

What does this mean for CIOs? Well, no longer will they be asked to upgrade the core ERP system in order to innovate, nor unpick software customisations and forklift upgrades to get to the root of issues. ERP will become light touch, almost invisible and, using an ‘innovate on the outside’ model, intelligent APIs will seek out the information that’s needed without disturbing the core system. That means less disruption, fewer headaches, more productivity and time being given back. CIOs have always hoped to reset the 80:20 ratio so that they spend 80 per cent of their time on innovation and just 20 per cent on ‘keep the lights on’ operations rather than the other way around. As software becomes smarter, that dream stands to become a reality.

The new ERP will be federated assemblies of micro-services, sold as utilities on a subscription basis and they will become like water and electricity, the unseen engines of profitable operations. They will understand the different operating models needed for specific vertical sectors and will be largely preconfigured rather than the blank canvases that leave companies wide open to generations of consultants being needed to do basic work at eye-watering billable hour rates.

Upgrades will be non-disruptive, similar to the way an iPhone doesn’t much change markedly when you upgrade to the latest version of iOS. Most users won’t even know they are interacting with an ERP when they file expenses, process invoices, check inventory or place an order. They will be prompted, rather than reinventing the wheel, and actions will be completed and routed in real time. ERP will be seamless and generate only a background hum, operating closely with other software and services.

ERP applications will become agile, responsive and dynamic. Human beings will provide checks and balances, but they will rely on the software to be knowledge banks for business process and machines for continuous learning and self-improvement. These systems will be fast, fault-tolerant and highly reliable. ERP will become a rock-solid foundation but also malleable and user-friendly. That will leave people to do what they do better than software, exercising human ingenuity, knowledge of markets and insights.

So, it’s goodbye and good riddance to the old ERP and a warm welcome to the new ERP.