Death of ERP as we know it

Many organizations spend millions to implement large and complex enterprise applications to enable best in class IT solutions that result in “increased operational efficiencies”. I believe this strategy is crippling many mid to large sized organizations. Oracle and SAP are expensive, complicated, and robust applications that reduced risk from a CIO and CFOs perspective. But at what costs? I rarely see clients who achieved the ROI estimates they calculated prior to the significant investments.

Many C level executives no longer believe in calculating ROI for large ERP projects because the ROI simply is not there. They are forced to stay current with the complicated systems and spend millions on upgrades due to fear of being left behind and eventually de-supported. So what options do they have? Many are starting to replace low risk and low complexity pieces of their business processes with cloud based SaaS solutions. There are plenty to choose from and many more keep popping out. They are not flat our replacing the ERP applications, but one piece at a time they are transferring processes from the large consolidated ERP to niche software applications that meet the needs of that business area more effectively and at a significant price reduction.

In 10 years the clients might still be an Oracle or SAP shop, but perhaps 50% of the scope that existed in the old ERP may now be distributed across a handful of SaaS distributed cloud based systems all well integrated with robust automation and integration tools. The power will shift from the large ERPs software companies to the enterprises ability to make choices and take back the control. Many IT departments have been crippling their operational and business teams by implementing best in breed large ERP software. The future will allow companies to deploy smaller Cloud based solutions that meet the business needs more effectively.