Upcoming ERP Technology Trends for 2023
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In this article, we take a look at the increasing sophistication of ERP platforms, as vendors act to fine-tune their services against a background of changing working practices and the more specialized needs of the industry. We also look into the trend toward further integration, and the prospects for mergers and acquisitions in today’s unpredictable market conditions.
Why It’s Time For ERP Take-Off
The acceleration of enterprise resource planning (ERP) system adoption reflects its increasing importance not only to the growing business but also for organizations that are focused on cost-saving transformations. Even with a recession looming, there is no sign of a slowdown in the advance of ERP, as CFOs look to conserve every cent.
ERP is the key to integrating multiple business functions across an organization. Instead of having your data exist in silos, it becomes incorporated into a single digital space so that business platforms (spanning customer relationships, supply chain, and financial management) are made accessible from one portal.
This combined data becomes a single source of truth across the enterprise. As more powerful tools and technologies become widely available, the associated reduction in IT costs, inventory levels, and cycle times — with a reported average return on investment (RoI) in just over two-and-half years — is inspiring more businesses to plan their own ERP deployment.
Cloud ERP Deployments by the SME
ERP has slowly been making a move away from on-premises solutions. While similar technologies, including CRM and SCM systems, have already been in the cloud for some time, ERP has undergone a more gradual shift. Cloud solutions are especially appealing to larger organizations (over 1000 employees) because of low costs and greater economies of scale.
In recent times, the trend has accelerated. Vendors are investing more in cloud technology, and it is being successfully adapted for use by smaller businesses. In fact, the size of the international cloud ERP market is on its way to reaching $178 billion by 2030, according to Adroit Market Research. The financial and accounting solutions segment is growing the fastest.
However, cloud-based ERP solutions are also seeing an uptick in popularity across government, industry, and the retail sector because of rapid technological progress, including the emergence of the Internet of Things (IoT). Conveniently, today’s SMEs can choose between a system fully hosted in the cloud or a hybrid model that gives a degree of in-house IT control.
Cloud models offer many advantages to the modern SME, enabling them to ramp up IT investments without the need for a large internal IT department. It’s important that ERP vendors emphasize cross-platform capabilities and user-friendly software, thus enabling their SME customers to embrace more advanced technologies down the road.
A Stronger Focus on Mobile-Friendly, Real-Time Access
In the age of remote and hybrid working, ERP vendors must cater to a workforce that is constantly on the move. Clients are searching for devices that enable them to access valuable data, preferably by streamlining capture directly from the source. They want to send notifications, organize events, and approve sales orders and expenses on the fly.
For this reason, the trends toward mobile ERP and cloud ERP deployments are closely connected and overlapping. After all, when companies shift ERP functions to the cloud, they immediately gain the ability to tap into business insights around the clock from any mobile device — instead of needing to be physically stationed at the office to retrieve them.
Real-time visibility is a big selling point. Vendors should provide intelligent dashboards that enable clients to generate detailed reports and carry out more accurate forecasting. At the same time, mobile enterprise solutions shouldn’t neglect offline functionality. The inevitability of dropouts calls for automated data syncing as soon as the connection is restored.
The Continued Rise of Industry-Specific Solutions
Many businesses are satisfied with basic, plug-and-play ERP functionality, but often that’s simply not enough. ERP vendors now offer industry-agnostic technologies that provide core and advanced features to support any type of organization.
Some clients require a degree of specialization due to their more offbeat workflows. However, over-customization is expensive and time-consuming — and a major factor as to why so many vendors are opting to build industry-specific products. Government contractors, manufacturers, distributors, eCommerce operations, and non-profits all have different needs.
The increasing interest in more closely targeted solutions presents an opportunity for ERP vendors to charge higher prices and provide additional add-on services or functionality. Be prepared to show your clients how they can achieve massive cost savings and bypass the need for further ERP customization down the line.
Today’s ERP platforms incorporate artificial intelligence (AI) and machine learning (ML), enabling businesses to convert mountains of business data into actionable insights. Over the next year, we expect more vendors to add smart functions, including zero-touch automation, intelligent advisors, and interactive assistants.
The Response to Labor Shortages and Supply Chain Disruptions
Product and labor shortages are affecting markets internationally and we expect this trend to continue next year, with the manufacturing and construction sectors especially hard hit. As a result, businesses are finding it hard to keep sufficient inventory in stock. One small disruption can have a cascading effect on organizations that rely on a more convoluted supply chain.
This instability is expected to trigger a golden age of robotics. But we suspect that ERP systems, especially those geared toward the needs of manufacturers, will also become much more valuable and prominent. ERP vendors should move quickly to provide systems that enable real-time supply chain visibility and reporting and forecasting on market trends.
Automation of HR, procurement, and finance should be firmly in your sights. By providing these technologies, you can help your clients to respond and adapt more effectively to sudden fluctuations in the market and customer demand.
Remember that e-invoicing and ESG standards are relatively immature in most markets, so vendors will need to keep a close eye on legal and compliance requirements in each country.
In 2023, ERP technologies are set to become even more closely integrated. We suspect that large enterprise vendors will be looking to swoop on the more promising young industry upstarts. Due to the closer integration, it will become more difficult to define precisely what an ERP is. On the other hand, the success rate of ERP implementations will improve further.
Vendors should tone down the usual growth-based messaging and show prospective clients how they can help them to reduce costs in a recessionary period.