Today's entry will be (uncharacteristically) brief because Gartner produced an excellent report on this topic that says much of what I want to convey about the future of enterprise tech.
I fully agree with Gartner's view on this topic and it meshes with my experience in many of my full-lifecycle enterprise software implementations. For a few clients, the monolithic model has worked reasonably well, but for many - particularly in software, high-tech, services, and media - monolithic ERP has been a clumsy fit for substantial pieces of their business.
Now organizations have more options available to them. The enterprise software landscape is much more distributed than it used to be. The cloud has enabled many new, innovate enterprise tech companies to deliver products that are highly tailored to a single purpose or function (keeping in the spirit of the weather here in the Northeast, "snowflake systems", if you will). There are great solutions that now cover your most strategic functions. Some examples:
- If you offer bundled services and the billing module of your ERP solution can't do the revenue recognition required, you can now use Zuora
- If you have a customer service division that now needs to handle both products and services, there are options like Zendesk that can be used for all your call center operations regardless of the product or service that's stored behind the scenes in your inventory or order management systems.
Your ability to reduce the operational overhead of running these solutions - largely by hosting them in the cloud (usually public) - and turn your investment and people to more value-added activities like managing more integrated ecosystem of solutions and systems will be a greater determinant of your future success as an IT organization.
My point is this:
Software selection and project visioning is more important than ever for new ERP solutions as well as new software that supports any major business function.
New federated ERP models will force companies to carefully select the solutions to bring into their ecosytem based both on their fit to the business and their ability to seamlessly integrate with the core of the enterprise. My advice: don't short-change yourself on the selection process.
- The decision on your systems will no longer be about the level of fit of every module of an ERP solution to your business processes and how much customization will be required. If it's a clumsy fit to order management but supports the rest of your business, try to find a better order management option.
- Your should not automatically take a "no customization" route to your enterprise software implementation just because it creates IT complexity. If processes will be substantially sub-optimized by a clumsy process to fit an ERP platform, you should look to see if there is another solution available
- More native integrations will be available and figuring out which systems and which cloud providers work best together will not be an important part of the selection process
- Long-term TCO is no longer an adequate measure of a system's costs. If you are sub-optimizing business processes and making people's jobs more difficult to do, you are understating your TCO by ignoring the opportunity cost in these areas. (e.g. forcing data management responsibilities on a sales force because they are the entry point for customer master data)
Systems selection will be about the business goals you are trying to accomplish through ERP and how the systems will integrate with and support the best solutions for every other part of the business. It cannot, fundamentally, be just about the needs of the core area owning the implementation: it needs to also consider the relationship with the rest of the business and their systems.