INSIGHTS

Blog

The ERP Boom

|

 

Enterprise Resource Planning (ERP) or Enterprise Computerization has become a common tool in today’s world to integrate different functions, information and resources within a company with the goal of facilitating strategic business decisions.

In the early age, the attention from the software vendors was targeting large enterprises, leaving out small to midsize (SMB)  companies. Nowadays, the trend has started shifting as the SMB ecosystem started to gain importance in the global economy and needing to catch up on systems for the modern world.

The ERP market is skyrocketing, expected to reach $42 billion by 2020, according to an Allied Market Research “Global ERP Software Market-Size, Industry Analysis, Trends, Opportunities, Growth and Forecast, 2013-2020.”

What’s really driving ERP growth? Why is there a sudden surge in adoption and deployment of ERP software? Bottom line, are entrepreneurs becoming more tech-savvy?

Forecasts predict that much of this growth is expected in the SMB sector. They need an affordable, effective way to stay competitive, whereas larger enterprises need to streamline operations for greater efficiency. Overall, ERP software will still account for about 57% of ERP software use, with cloud hosted ERP accounting for the greatest growth.

What are the factors driving this mass adoption and implementation of ERP systems globally?

Post-Recession World

Most businesses around the world are still learning from the recent global recession of 2007. As a result, organizations are emerging with a renewed dedication to doing business in a smarter way. They aim to do more with less and to make the most out of their resources to  assure that businesses remain competitive through the bumps as the global economy continues to grow and stabilize. In a world where recession has never been more unpredictable, a competitive edge allows businesses to monopolize a piece of the cake and ensure their survival.

ERPs offer businesses the ability to streamline operations, improve business decision-making processes, and better plan for the future. After braving the storms of a near-depression economic climate, these features of ERP software are immensely attractive and undervalued.

Adapt or Die

Business has always been “Survival of the Fittest”. Advanced data analytics is the name of the game, but the need for real-time business intelligence means that access to analysis needs to be lightning fast. Executives expect data to be available within minutes – not days or weeks. Customers are also spoiled by real-time data streaming and cloud innovations, meaning they expect decisions to be made on their behalf in minutes – not hours or days. With robust ERP software, the data and analytics can produce insights for decision making in real-time or near-real-time.

And those who are not adapting would certainly lose their market share and fade away with the introduction of cutting-edge tools from competitors.

Doing Business Anytime, Anywhere

The cloud also makes it possible to do all of these analysis via mobile devices. No longer are executives and sales teams sitting at a desk looking at their PC, most often they are on the road, working from home, or with a client working on a smartphone or tablet. With cloud ERP software, these team members can get the same real-time analytics for solid and sound decision making wherever they are, whenever they need to be working.

Nearly one third of all enterprise resource planning (ERP) systems in the world will attempt the migration to the cloud in the next two years, according to a study commissioned by Hitachi Solutions Europe. The big players including Oracle are reacting, as we saw, with their recent acquisition of NetSuite Cloud ERP/CRM. The legacy players are not denying the growth in the cloud spaces, they know that they are all coming, it is just a matter of when.  

Some of Gartner’s conclusions are reflected in recent trends with some of the industry’s largest ERP players: SAP and Oracle.

SAP has been purchasing a series of what it calls “line-of-business” SaaS (software-as-a-service) applications aimed at human resources, sales and other departments. The company has also unveiled a cloud hosting service powered by HANA in-memory database for its traditionally on-premise Business Suite.

Oracle in turn has touted the benefits of deploying its next-generation Fusion Applications, which can be run on-premises or as SaaS, incrementally alongside its customers’ PeopleSoft, E-Business Suite and J.D. Edwards ERP implementations. There are some 100 different Fusion modules. Meanwhile, the options are growing for pure cloud ERP, even for manufacturers, given vendors such as NetSuite, Plex, Kenandy and Rootstock.

In short, companies need to adapt to the rising need of being prepared with cutting-edge tools like Cloud ERPs to ensure their survival in today’s competitive world. The growth of cloud adoption in the mid-market sector is not only becoming a must but is today more accessible both in terms of costs and features.

 

Jeekeshen Chinnappen
Jeekeshen Chinnappen is the Director of Business Development at Big Bang ERP, also advisor to the Prime Minister’s Office in the Republic of Mauritius under the Innovation Committee. Jeekeshen is a member of Mensa International as well as executive member of the National Business Development Association.