The future of ERP
What’s next?
As the most eventful year in generations comes to an end I look back for inspirations and can only think of opportunities created during 2021. If I must select a moment it has to do with a question during a talk on Supply Chain and Digital Transformation.
What is the future of ERP? A participant from Calgary, Alberta raised it after covering all the topics in scope. Here my answer.
Enterprise Resource Planning — ERP — supports the management of company resources from assets, money, and people by recording, monitoring, and controlling transactions for predictability and improvement, reporting and planning. Historically it has been expanding scope from sales, finance and pay roll, to operations, maintenance, and distribution but key functionalities such as journal posting have not changed as they represent the essence of the system. Big players from SAP to Oracle and Windows, among niche players for specific tasks, have kept the market dominance thanks to the support and evolution over decades of development including Business Intelligence — the natural extension to mine the data recorded from transactions to dig for insights and transformation opportunities by answering key questions, what is the most profitable category? Which regions require more support? They can’t be answered solely by looking at data, they need to process it for knowledge leading to answers to key questions.
As data gets more relevant for organizations to survive in a highly competitive market, ERP role — transactional data repository with basic controlling features — will become less human relevant as machines and assets in general will add controlling features to suggest corrective actions. A large piece of equipment such as a Compressor, will generate signals from sensors leading to preventive actions from oil change to spare parts replacement by placing orders under existing contracts using remote monitoring to connect with Original Equipment Manufacturers (OEM) for intervention. As the technology evolves with Internet of Things, Digital Twins the granularity of the features will eventually cover the asset down to the last nut.
Having said this, the role of ERP will be a feature embedded in equipment capable to run from signal to ledger while humans will run Artificial Intelligence applications for prediction, prescription and digital transformation on data products taking away the repetitive tasks by automating the transactional portion of the process. It may be called Enterprise Analytics Performance and will generate wisdom from process mining to improve continuously and face disruptions in a more robust and resilient way.
I see a future where digital gaps are closed by decisive decisions where humans have — still — a say in the process. This will be the topic of my next editorial project.
Happy season and new year! Until 2022
Gustavo Pisani
Richmond, December 19, 2021
