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Let's clear something up straight away: When I say you need to be considering "ESP" if you're thinking about ERP, I don't mean the ESP you might be thinking about!
Of course, a touch of the more traditional extrasensory perception might be handy when it comes to planning and executing anything in IT, but by "ESP," I mean three crucial elements that are impacting contemporary ERP choices and implementations. Here are the three:
- E: ecosystems
- S: security
- P: pandemic
I'll explain each in more detail in just a moment. But if I'd said that we had just completed a new research report on ERP -- which found that 65% of respondents indicated their organizations have plans to upgrade their ERP systems, mainly driven by streamlining business processes (27%) and digital transformation (25%), with attributes such as performance (39%) and ease of integration (34%) in the top desired features -- then you might not pay a great deal of attention, true as all these statements are.
That's because the really interesting findings in our research are not what continues to be important in the ERP market space but what is both new and significant:
- Ecosystems. Basically, think hybrid IT deployment for ERP, not only in terms of it being across on-premises environments and the public cloud (39% replied "hybrid" and a further 31% cited public-cloud-based when asked about their expectations for upcoming ERP deployments), but also in terms of it probably involving personnel other than your own employees managing the system. While it was the leading singular option, "internal staff" was only cited by 44% of respondents.
- Security. While probably thought about, this is no longer something that is applied as an umbrella over an entire IT department/organization. But it is far and away now the most important feature of ERP. This is therefore "built in" rather than "bolt on." While the aforementioned performance and easy integration certainly still matter -- ranking second and third, respectively, on the list of most important features for ERP systems -- they are significantly outpaced, with 59% citing security as the No. 1 feature.
- Pandemic. Although the pandemic is still very much a reality of the world as a whole, the "pandemic pause" in certain aspects of IT has lifted. Planned investments in ERP are strong as organizations broadly continue their digital transformation journeys. While fully 93% of respondents expect their ERP-related investments to remain level or grow, nearly 41% of that group expect an increase.
So you'll definitely do well to keep this particular "ESP" in mind in terms of how you are most likely thinking about, planning and deploying ERP.
To find out more, you can read the whole report here. It includes more granular details on all the points mentioned above, plus insights into built-in intelligence and automation. Also discussed are differences across vertical industries, as well as vendors associated with and considered for ERP.
And what about the other ESP? What sixth sense can we use to figure out where this is headed? Whereas ERP has always been about using the power of networked computing systems to integrate the world of business processes in an enterprise, it's clear that the world outside of IT and data centers is now also having a great impact on how ERP gets done.
Be it the inexorable rise of cloud computing, the rise of ransomware and the focus on data security, or simply the changes in work patterns -- and hence business approaches -- wrought by COVID-19, it's clear that ERP can no longer be simply applied to a business. It must be completely entwined and cognizant of what is happening in the broader sphere of IT and the world.
And that makes things really interesting. In our research, many users said they are considering additional point products outside of their core ERP vendor. The top three areas mentioned were CRM, financial and accounting management, and enterprise asset management.
Adding such specialist solutions to help address the increasingly complex demands of modern business makes perfect sense. However, the sum of the implications of the ESP elements discussed here (ecosystems, security and pandemic) could actually easily augur in favor of less diversified specializations and more inclusive "business operating systems" that embrace traditional ERP, together with specialist extended capabilities, in order to be as protected and flexible as possible.
In plain English: Driven by the ESP factors highlighted in our research, will ERP over the next few years encompass planning all of an enterprise's resources, or just some of them?
ESG is a division of TechTarget.