The history of Erp Systems commenced with material requirements planning (MRP) systems in the 1960s, that helped manufacturers manage raw materials procurement and delivery to the production facilities, so they could better plan production runs. The ‘80s saw the emergence of the first manufacturing resource planning (MRP II) systems that supported manufacturing processes beyond inventory and raw materials procurement. Sometime in 1990, Gartner used the term enterprise resource planning - where many businesses were utilizing these systems to increase the efficiency of their entire operations. The year 2000 saw the emergence of ERP II - internet-enabled systems that could pull data from other internal business applications as well as integrate with system of customers and vendors to drive process level collaboration. 

1. Cloud ERP - With work from anywhere becoming the new normal, taking ERP software to the cloud has become mandatory. A study mentions that about 50% of employees in just US have migrated away from cities and seem to have no plan to return back. Many services companies and online businesses in India have also announced permanent work from anywhere concept.
2. ERP solutions on mobile – Since quite a few years, limited functionality of ERP solutions has been available on mobile devices. Functionality accessible on mobile devices and adopting a mobile-first strategy are two different concepts. As we move to an uncertain future, enterprises will look to start bringing in seamless ‘anytime, anyplace’ ERP availability by creating an application based system. This will make easier how users can easily acquaint themselves with its functionalities and maximize the capability. Additionally, the emergence of Gen Z in business as ERP users makes it necessary to present the solution on mobile to these digital native users.
3. Cognitive ERP - Modern ERP systems, specifically Cloud ERP, will increasingly be amplified by intelligent technologies like AI, ML, and advanced analytics. This will enable businesses to identify very short term business issues, transform data processing, create new workflows, extend the automation of routine tasks, and convert complex & unstructured data into actionable insights. For e.g., the statistical forecasting models would be replaced by algorithms such as ARIMA/SARIMA, XGBoost, K-Nearest Neighbours Regression, Random Forest, and Long Short-Term Memory (LSTM) or route planning would use Ant colony optimization (ACO) algorithm.
4. 3D printing & additive manufacturing - Customers and consumers are rapidly changing their buying behaviours to try new products and service. Production houses are reshoring and near-shoring to locate closer to the customers. 3D printing and additive manufacturing create additional process challenges and require far tighter integration of PLM, quality, on-prem ERP software, and Cloud ERP service. Next Generation ERP systems will incorporate 3D printing to provide seamless connectivity, business intelligence and ease-of-use for their customers.
5. Convergence of digital and social media marketing and ERP systems - Most digital marketing initiatives operate independently, and they very rarely interact with the ERP systems. This limits in finding insights into the customer journeys and providing consistent experience through each stage of the customer and order lifecycle.
6. ERP integration with IoT - The internet of things (IoT) provides improved asset management, greater efficiency, improved forecasting, real-time business insights, enhanced communication, improved business intelligence and more. It also supports proactive supply chain management, autonomous vehicles, real-time analytics, artificial intelligence, e-commerce retail and more. It enables ERP systems to gather, store and process unparalleled amounts of data.
7. Homogenized ERP - Current ERP software and Cloud ERP are often seen as a hindrance to responsiveness since even a minor change request can be surprisingly complex and costly. Understandably organizations prefer a composable ERP solution with modular capabilities that enable experts to develop and deploy new business functions and services. A case in example is the Microsoft Power Apps that enables extending of ERP functionality through Power Apps without much of coding and natively integrated to Microsoft ERP solutions.
8. Transition from One-size-fits-all ERP to Industry specific solutions – Customers demand niche ERP solutions that incorporate industry-specific knowledge and best practices, provide focused features and functionalities relevant to specific industries, and enable seamless integration with breakthrough technologies. The open code & open architecture model should provide the best framework for industry-specific development.
9. Moving to a tiered deployment strategy - As technology leaders evaluate the business benefits of a two-tier ERP strategy against that of a single-tier deployment model where a two-tier ERP strategy enables large organizations operating across multiple locations and subsidiaries to integrate Tier 1 ERP designed for corporations with Tier 2 ERP solutions designed for midsize and smaller businesses. The benefits include the ability to address specific business needs and localization requirements more effectively, while achieving significant cost savings in implementation, maintenance, and upgrades, and enhanced user experiences across the stakeholders.
10. Hyper automation - Maximizing ROI of ERP projects depend on how efficiently, conveniently, and quickly a company can go live. To ensure this hyper-automation certainly comes close by assisting them avoid repetitive, mundane, or even complex tasks. It can eradicate delays, inaccuracies, and inconsistencies typically associated with ERP processes by automating complex workflows and can also facilitate digital on-boarding of resources, reduces the ERP implementation cycle, and discover new automation opportunities.
11. Powerful embedded analytics – Most ERP of today have integrated analytics, reporting engine, and data visualization capabilities. This gives them access to appropriate data in real-time. The future ERPs are expected to have more robust data mining and reporting capabilities. The future of ERP points to an end-to-end tool that can process both structured and unstructured data.
12. ERP Software Security – The period beyond the pandemic 2020 has observed pervasive cybersecurity attacks and data breaches. With a significant portion of the workforce working offsite, ERP solutions are currently not equipped to handle security issues presented by remote work concept. The adoption of infrastructure as a service (cloud IT infrastructure) for business process support, a trend that’s common in ERP implementation, creates new issues for corporate security in information technology.
13. Compliance to Data Protection & Privacy regulations – Organizations have previously focused on protecting their proprietary code or trade secrets from competitors but are now challenged with new data privacy laws in many countries that can impose significant financial penalties on companies that mishandle or lose consumer data.

 

Moving beyond 2022, we believe that a key advancement is the growth of low-code and no-code Erp Software that enables users to optimize ERP software. Low-code ERP platforms with accessible, flexible, customizable, and user-friendly dashboards and AI-based conversational interfaces will expand the business value of ERP data and insights to all employees. 

While all the above trends would majorly impact the enterprise segment, a few needs of SME segment companies could be: 

• Simplified user interface of the Cloud ERP
• Simplified Cloud ERP model for MSMEs
• Migration tools from well known accounting systems such as Tally, QuickBooks & Zoho Books to ERP Software
• A different licensing model to make ERP Software affordable by this segment
• Simplified operational capabilities to address employee accountability and productivity issues for e.g., flow management process that defines operational task allocation to employees, definition of SLAs and generating alerts in case of non-adherence to SLAs
• A partner eco-system of Cloud ERP that has a revenue model linked to project success