The road ahead for ERP…..

I recently read a study from Software Advice, a company that provides research and reviews on ERP systems, and decided to blog about their findings.  There was some good advice and statistics in here and I thought I would add a few little gems (bluestone …..x ) to help the small to medium enterprises thinking about furthering their journey to ERP, and possibly SAP ERP.

As stated in their introduction:

As a business grows, it inevitably reaches the point where its current information technology (IT) infrastructure—or lack thereof—can no longer handle the scope of operations. When it reaches that critical mass, one of the first moves a firm makes is to overhaul its ERP system (or whatever processes it follows to perform essential ERP functions).

Picking the right ERP system is rarely an easy decision. Such solutions are an expensive investment, with lifetime costs typically ranging from tens of thousands to millions of pounds, depending on the size of the organisation.  And from data migration to system customisation to employee training, the process of fully implementing these systems can take anywhere from a few months to a few years to complete.

It is true that if you haven’t got an ERP you wont have the majority of baggage that comes with understanding the processes and technology so probably less risk although the change management to people, departments and organisations is greater.  It is still true that many first time buyers have reason to worry, after all: ERP implementation failure is a very real thing that can cripple even large corporations.

So, has ERP software changed to become easier to implement? Let me tell you about the software’s evolution. When I first started working on my first ERP project moving from AS400 systems to SAP 4.0B it was a case of bringing everything into the one system.  Before that time it was a case of disparate systems being connected together and became rather complex.  ERP Projects back then were about consolidation of processes, systems and standardisation.   It is amazing how over the last 15 years we have moved from centralised systems to decentralised systems (even though we have been saying the complete opposite).

A good example in the early years was that the typical  SAP 4.0B had a WM module and then SAP started breaking this up with future releases of the software & add ons like Decentralised Warehouse, Task Resource Management and more recently Extended Warehouse Management (all of which brought new features and more often than not resided on a separate server and connected via IDOCs) – This was done for very sensible reasons (or so we thought) but it made the management & maintenance of the systems more complex when it was designed to do the opposite (an example being having a Warehouse which is operational 24×7 on a separate server to that of the core ERP meant the patching of the ERP wouldn’t affect downtime in the warehouse).  My point is the Enterprise platforms should have got less complex, but there is an argument over the last 10 years that things have gone out of control with more SAP software added to the core ERP & not being baked deep within it.  Hmmmm, I wonder why?  Licenses revenue driven by these add on/software engines?

And then came the news this year around S/4 HANA………

Ok, so this analogy is about everything being cyclic and what goes around comes around but now with the emergence of cloud, innovation, and simplicity, the landscape complexity should ‘blow’ away (no pun intended).  For those that haven’t read the ERP news, one of the biggest announcements this year was the release of S/4 HANA.  S/4 HANA is the next generation of enterprise software, and I am not a reseller of the product but I will give my own personal/professional opinion.  OK, so lets start with some of key highlights relating to this blog topic:

  • S/4 HANA can be delivered on premise or in the cloud and is built on an in-memory platform.
  • S/4 HANA has a really strong user experience (traditional SAP ERP was not that pleasant an experience believe me).
  • S/4 HANA has combined some of the add-ons into one box & therefore added better features.  An example for those of you that know SAP is advanced planning & optimisation.

So, a good user experience along with the best features suitable for an enterprise and can live in the cloud or on premise (its your choice)- this is to good to be true, right?  Well after our consultants complete the certification, get their teeth into S/4 HANA, and have a couple of projects under their belt then we can give some more constructive feedback.  But, for now, let’s watch this space and understand what type of customer would move to this platform.  SAP are giving the spin that it is easy which ever road your travelling from (existing SAP customer, new to ERP, new to SAP).

I think SAP have certainly got the strategy right with simplicity, but I am eager to learn in reality how simple this new breed of enterprise software will be to actually deploy and importantly how long it takes to realise the value which the enterprise demands whilst existing within the network of Internet of Things (IoT).

Thank you to Software Consultancy, Software Advice for the initial research – they have nothing to do with my own personal opinions!


If you currently have an ERP solution and you’re wondering whether to upgrade or move away from it, our guide on Sweating or enhancing SAP assets may be useful to you.