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3 predictions for cloud ERP evolution during 2020

25th February 2020,  

Choosing a cloud ERP solution is a complex undertaking. The major ERP vendors; Infor, SAP, Oracle and Microsoft each have their own compelling vision, as do the new kids on the block. How about product development, improving productivity at each release and future-proofing your investment?

Again, the established vendors have a track record of continuous improvement. Fledgeling vendors aren’t weighed down with legacy products, so they can innovate more easily. OK then, what about their license agreement. What are their plans for AI adoption? Well…

As cloud infrastructure increasingly becomes a commodity, it will become harder to differentiate based on architecture. The successful vendors will have a cloud architecture but coupled with a customer-centric approach to licensing and they will harness AI and machine learning. Here we examine the trends to watch out for.

License agreements

ERP vendors use a number of tactics to hide the true costs of implementing and running their platform:

– Costs for training and consultancy are extra.
– Bait and switch [1] is used to bring in new customers at break-even rates. Prices are then increased year-on-year after the customer is committed.
– License agreements are complex and can be changed at renewal, leaving the customer facing increased costs for compliance.

Successful vendors will win and keep customers by being fair and making contracts customer-centric. This means using a EULA that charges based on usage; on which is easy to understand and that does not keep changing. Annual price rises will be capped. Finally, if the customer decides to switch to another vendor, or make use of their data on another platform, they will have guaranteed rights to do this, at any time.

Analytics, AI and machine learning

As reported in a recent Forbes article: [2] “Companies that still aren’t investing heavily in analytics probably won’t be in business in 2021”. Using analytics, business leaders can foresee opportunities, find novel solutions to challenges and gain a new perspective on how the business is running.

AI and machine learning (ML) are now coming of age:

– The algorithms that drive processing have now matured sufficiently that they can be implemented in commercial systems.
– Organisations now have the data necessary for AI and ML to exploit.
– Cloud technology has advanced to the point that it can process masses of data in real-time.

Analytics, coupled with AI and machine learning, will drive business transformation in ERP. Vendors will begin to use the technology to extend their solutions. Customers will be able to reduce costs as well as gaining insights.

Increasing use of cloud

As ERP vendors phase out their on-premise solutions in favour of cloud, this will encourage their customers to move forward. It will require investment, not only in technology but also in people. As organisations migrate their systems to the cloud there will be ERP jobs for specialists to automate and orchestrate their operation.

Cloud will reduce the requirement for traditional IT roles, such as commissioning and running on-premise hardware and software, carrying out upgrades and keeping data secure. These roles will be replaced by ERP jobs for individuals with skills in cloud implementation.

Organisations will use best-of-breed systems to run their businesses, such as Salesforce for sales automation and Microsoft Outlook for email. There will be ERP jobs to integrate these systems with procurement and finance.

How to choose an ERP solution in 2020

Choosing an ERP vendor is as challenging as ever. The major players still have a convincing story on cloud, while encouraging customers to migrate from on-premise legacy systems. Infor has recently been in the news with its backing by Koch, securing its future.

As cloud ERP evolves, choosing a vendor means looking under the bonnet. Examining their policies on price increases and data ownership, understanding their license agreements and implementation costs.
Importantly they will use AI and ML, not as a cheap sales gimmick but to provide genuine benefit to the customer.

[1] https://en.wikipedia.org/wiki/Bait-and-switch
[2] https://www.forbes.com/sites/danielnewman/2019/07/14/top-10-digital-transformation-trends-for-2020/#336750576beb

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