Are ERP ‘dinosaurs’ on the road to extinction?
- 26 November, 2015 16:18
In a past life I was an IT consultant. During this time, I always found it rather interesting that the vast majority of organisations would invest millions of dollars into enterprise software marketed by the big three – Peoplesoft, SAP, and Oracle (before it bought PeopleSoft).
At the time, there was a constant stream of companies building business cases to make large investments in IT transformations.
Now, these projects were not easy; they were often delayed or not delivered at all. This is not surprising given that enterprise software is a complex beast.
But things have moved on since those days of client/server computing. Everyone’s moving to the cloud and delivering services to their highly mobile user bases.
For the most part, the likes of SAP and Oracle have struggled to keep pace with this change. This begs the question: Are these ERP dinosaurs on the road to extinction?
Will the force awaken?
The release of the latest Star Wars film, The Force Awakens, reminds me that there’s a new force that has woken up and we are now seeing a fresh class of apps that are attacking what was impregnable territory.
Vinnie Mirchandani discusses this in his 2014 book, SAP Nation 2.0: an empire in disarray. We are seeing pure cloud players such as Salesforce, NetSuite, Workday, and Ramco, taking on the ERP behemoths.
We’ve reached a tipping point as these new cloud and mobile-enabled solutions – which operate ‘capital free’ at third-party cloud service providers – gain in popularity.
Most enterprises started using cloud (to cut costs) and mobile (forced by BYOD). There also was a shift within these organisations towards customer experience and digitalisation.
This shift has been kick-started by many organisations that use cloud services for storage (through AWS and Microsoft Azure, etc) and CRMs such as Salesforce.
These are key core enterprise systems, not subsystems. Such change is not going to happen overnight as enterprises have made significant investments and are slowly depreciating old assets.
But there are compelling reasons to stop and look at an alternative world.
Clearly if you were starting a new business, you would have to think long and hard about using a dinosaur and instead start with one of the new breed of cloud apps.
Enterprise apps build for cloud and mobility
Recently, I came across a company named Ramco – which is a subscription offering just like Salesforce. The surprising thing was that it is a fully featured ERP and payroll system that operates in the cloud and with ‘mobility by design.’
It is not a point solution but a fully integrated ‘platform-as-a-service’ that provides rich functionality just like SAP and Oracle.
Where it starts to separate itself from the big boys is that it is also quicker to implement and cheaper – we are talking months not years of effort.
But for me the biggest factor was the design, which has mobility built in and it’s not an add-on. One simple example is a concept called Mail it by mailing “AL” to an email address, your annual leave balanced is returned.
Similarly, if I want to request annual leave or a salary slip, it’s all done over email. Or if I want to get a new hire approved, it’s a mobile task on your browser or even SMS.
The concept of Zero UI
By definition, Zero UI is the concept of removing the barrier between user and device, and having a more seamless interaction with technology. It is all about making the experience very intuitive and natural.
A great example is the concept of a timesheet and we all hate to fill these in at the best of times.
Ramco’s mobile app has a location-aware timesheet. It knows where you are and will automatically provide a SIRI-like response to help you through a task that you don’t enjoy.
These are not extra add-ons but ‘out of the box’ functions that you can use or ignore as it comes with a standard subscription product.
Add some machine learning
These products also observe your behaviour and once a pattern is established, they suggest a workflow action using a ‘Prompt it’ button.
An example is a routine approval that a manager makes every week, and you are prompted with options to make a decision. No, it’s not big brother but the system observing what is normal and suggesting a few logical options.
But if you don’t like that you can also control your own screens and processes. This is actually at a ‘user’ level and not a ‘group’ basis. The feature, called “Hub it”, allows you to create your own view of the world.
Does the empire strike back?
Obviously, I don’t know how the next Star Wars movie will unfold because it’s being released near Christmas, but in the case of enterprise apps, the more nimble cloud and mobile players will give the legacy vendors a real run for their money.
In fact SAP, Oracle and others are all trying to play catch-up and create cloud solutions. SAP has just announced its SAP Fiori technology to port applications to mobile devices.
Either way, it is clear that the dinosaurs are trying to survive and the question is, ‘will they be able to thrive over the longer-term?’
Perhaps we will know the answer by the time Star Wars VIII is released.
David Gee is the former CIO of CUA where he recently completed a core banking transformation. He has more than 18 years' experience as a CIO, and was also previously director at KPMG Consulting. Connect with David on LinkedIn.