The globalized, industrialized world is run mostly by Enterprise Resource Planning (ERP) software. That’s been the case since the 70′s, when we first computerized accounting through mainframe and other monolithic, all-or-nothing applications. Dun & Bradstreet eventually dominated a marketplace where only the wealthiest companies could afford to play.
The arrival of client-server applications in the 90′s completely disrupted the ERP giants and we entered the age of JD Edwards, PeopleSoft, Oracle, Baan and SAP. The success of the old generation of vendors was their own undoing. They couldn’t embrace the new model and they faded from the software marketplace.
The Fortune 2000 now rely primarily on SAP and Oracle as a series of consolidations left these two alone atop the heap. The middle and specialty market has vendors like Epicor and small business is now dominated by Microsoft, built on a series of acquisitions. ERP could be easily described as a mature space.
When disruption arrives
This is always the moment when disruption arrives. Nearly everyone has an ERP of some sort and the enterprise house is mostly in order from a cash cycle, reach, and information standpoint. But when we reach a point of stability, we get restless (or we should) for more.
Those reaching for more see three challenges coming into focus, 1) the system that sits atop that mountain of information doesn’t differentiate anyone from the competitor, 2) data in the ERP database or BI data warehouse is ‘static’ and not actionable, and, 3) mobility and an app approach aren’t well supported by the ERP status quo.
Reaching for more
There’s a way to build on a stable ERP system that doesn’t require rewiring your business. The clever enterprise knows that a broad spectrum of external data can be analyzed against ERP and BI ‘dashboard’ data to come up with patterns that represent opportunity, risk and efficiency. Once that understanding is in place, it is just a matter of having a way to watch for those patterns (events) in real-time so that response can be faster than the competition and highly differentiating.
ERP is an enterprise data source and not the way to compete. Events are the way to both compete, lessen your costs and save your skin by enabling real-time decision making based on a broader spectrum of information. Oh, and by the way, it’s very easy to upgrade…
For a Gartner-inspired view of why ERP needs BPM for differentiation, see Why ERP needs BPM…a view from the BPM Summit.