Since several months, numerous opinion columns announcing the decline and the end of the ERP thrived on internet.
The integrated ERP system would belong to a past era and would no longer have its place in the companies, replaced by different solutions each specialized in a field.
Two approaches have been used for several years. The so-called “integrated” corresponding to ERP solutions, which means having a unique software that manages the various main functions of a company such as invoicing, accounting, production, payroll …
And the “best of breed” approach which consists of choosing several specialized software each in one or two functions / domains.
With the multiplication of specialized actors on some particular software bricks, voices raised, not without commited positions, to challenge the benefits of unified solutions. But where does the lack of trust in ERPs come from? Is it justified?
The limits of traditional ERP
It is true that the ERP have a rather sulfurous reputation, and sometimes rightly so. Trully democratized during the 1990s, the integrated business management software has proven itself to be essential in many companies thanks to its qualities and the productivity gains it promised. But over time, grievances against ERP have become more and more numerous.
Who has not heard the story of an ERP project that went wrong? The main criticisms of ERPs are often referred to as rigidity, high costs, inability to evolve rapidly at the pace of business, and heavy and aging interfaces.
These criticisms are not unjustified, and rely on empirical feedback from various CIOs and business departments. Traditional ERP as it has been during twenty years is no longer adapted to the current economic world, increasingly competitive, requiring rapid adaptation of its business processes in the face of the new competition of disruptives actors in many business sectors.
Next generation alternatives appears
Historical players in the ERP sector have begun to take criticism into account and are making efforts to make their products evolve.
New technologically innovative solutions have also emerged on the market. Real alternatives to traditional ERP, they offer pleasant interfaces and are easy to use.
The main evolutions they bring are scalability. Where a traditional ERP, due to its rigidity, required companies to adapt their business processes to the software without being able to change them, new solutions provide greater flexibility.
With integrated tools such as development platforms (BPM, RAD, etc.), business applications can now evolve at the pace of business needs much more quickly, avoiding the custom and time-consuming development of traditional management software.
The integrated approach is still relevant
While it is normal to question certain aspects of traditional ERP systems, the value of having a single, unified system is still relevant.
The consistency of the information is guaranteed, users only connect to a single interface and the company does not have to subscribe to a multitude of softwares.
Choosing only specialized software may seem attractive at first, but the creation of silos that entails may be problematic.
Many interfaces have been created but making solutions communicating between them is not always so simple and can turn out to be complex.
The cost of purchasing or subscribing to several software programs can also become expensive, especially for SMEs.
The two approaches are nonetheless not contradictory, and opting for an integrated solution with one or two specialized applications around can make sense.
The ERP is far from having said its last word, even though the terminology now seems to have a negative connotation. If the management software package as it has been in the last 20 years is no longer really adapted to the new economic realities, the new versions of these powerful solutions are gaining a foothold in the market.
The term ERP may not be appropriate anymore and may need to be changed to reflect the difference between the old and the new generation of software, but the principle of an all-in-one suite for the main business processes within a unified system persists and keeps its full meaning. Publishers have become aware of the limitations of traditional ERPs and are now adapting their solutions to meet new business challenges.