Getting better connected - Special technology report ERP

Like any technology vertical within the manufacturing and logistics IT space, the functionality of Enterprise resource planning (ERP) solutions is being constantly changed and adapted, both to better leverage a particular ERP vendor's USPs, as well as to better fit the current business and operational requirements of the target end-user base and let's not forget the need to keep up with a raft of changing legislation related to things such as standards, quality control and the environment. The basics of an ERP system may remain largely the same; ie. to provide the automated, integrated means of accessing and adding to the flow of business-critical data across the whole enterprise and its business stakeholder network everything from manufacturing, orders, finance & accounting and more.

But where are the key developments to be witnesses in early 2011, and how are both the vendors active R&D departments and the end users' changing requirements steering these changes? Kevin Bull, product manager at Columbus IT, first focuses on user productivity. "Business pressures are demanding that employees squeeze more and more productivity from their working day," he said. "If the companies ERP system is able to deliver the user with the right information, easily and effectively, allowing it be manipulated and presented, the business becomes better positioned to react to change and opportunities. Modern ERP systems need to be intuitive and easy to adapt and easy to deploy, they need to be able to seamlessly share data with desktop tools." 
 
Bull also homes in on compliance management. He has observes that compliance has become an increasing burden in many businesses; both from a legislative, environmental and quality management perspective. "ERP systems need to include tools that allow business process documentation to be generated and held in a central resource and linked to system processes," said Bull. Furthermore, he comments that the ERP system needs to be able to provide strong auditing tools and workbenches to allow auditors to confirm that business practices are being adhered to. "Tools that can allow effective management of compliance practices and an ability to perform auditing in a cost-effective manner deliver real business benefit; no more so than in specialist industries with heavy compliance burdens chemicals and REACH regulations being a prime example."

Measuring the true cost
Bull then tackles cost of ownership. "As modern ERP systems provide broader business coverage, and as they become integrated with modern technologies, so the effort in deploying and maintaining systems increases," he said. Bull added that the cost of ownership of a system is not just a measure of the cost of the software, it is also the cost of maintaining it. "To this end, ERP systems must become more focused on the ease of deployment in complex connected topographies," he insisted. "It must be easy to define and maintain security profiles, it must be easy to connect to reporting and business intelligence tools, and it must be easy to maintain workflow and alerting tools." But perhaps most importantly of all, in Bull's view, is that, given that the most visionary ERP vendors invest huge sums of money in development of new versions of their systems, the system must be easy to upgrade and keep up to date.

Richard Turner, ERP solutions director at CSC, considers that one of the recent key talking points has been Oracle's move to the new R12 E-Business Suite. "This has been due to the announcement that from November 2011 there will be an increase of 20 per cent in support costs for prior releases, and final legislative patches will be released March 2013," explained Turner. He added that the Oracle E-Business Suite (EBS) Release 12 is a major new addition to the market, with significant changes in data model and functionality, especially in the Financials product area. "It introduces centralised functionality to handle accounting, taxation, access to data across organisations and offers more flexible implementation options than were available in Release 11i," he said, pointing out that this is in order to meet today's wider variety of business needs. 
   
This Oracle development has focused on improving the ability of EBS to better manage complex global businesses, said Turner; especially where organisations are centralising their applications into a shared service environment. Indeed, the roll-call of additional benefits looks impressive 18 new products, 400 new features and almost 2500 enhancements. Typically, states Turner, CSC has found that its customers have explained to the company that they want to upgrade in order to:

    Gain access to new functionality and software applications that can help keep their organisations well positioned to meet key business objectives.
    Leverage new and advanced functionality 'out-of-the-box' solutions with lower maintenance.
    Facilitate regulatory compliance at a lower cost through retiring customisations.
    Be able to implement new modules to manage additional business processes.
    Leverage the latest usability enhancements.
    Reduce Total Cost of Ownership rationalise licence/hardware.
    Enable shared service centre capability.
From Turner's perspective, there are a number of key drivers for these changes. For example, there are finance organisations slowly moving towards becoming a strategic partner to the business over the past decade. There is also the reality of globalisation, which is pushing organisations towards centralisation and standardisation. This, says Turner, is resulting in simplification in order to compete and react swiftly to changes in business, markets and regulatory and security needs, or to locate goods and services in lower cost markets.  Additionally, Turner's view is that the recession has driven business executives to look for ways to cut costs and IT budgets. "This has created an opportunity to challenge mind sets about managing operations, finance operations and practices in a bid to drive efficiency and productivity while reducing complexity across the enterprise without hindering future growth opportunities," he said.

'Green' incentives
According to James Norwood, senior vice president of product marketing at Epicor, one key area is carbon accounting. "The environment and reduction of carbon consumption has been talked about for generations," he said, "but in the last ten years huge strides have been made by governments in the way they legislate on this area, and provide incentives for businesses to demonstrate their own reductions." In the UK, Norwood points to programmes such as the CRC Energy Efficiency Scheme, which have accelerated the need for organisations to report accurately on their use of carbon throughout the business. "This is extremely complicated to do," said Norwood, "but making it an integral part of enterprise-wide systems, such as Epicor, can remove a lot of the headache, improving governance and reducing risk." 
 
Jonathan Orme, sales operations manager at Exel Computer Systems, observes that more and more companies now demand browser-based ERP solutions from their system providers. "These businesses," he said, "are looking to continually increase productivity by allowing users remote connectivity to their operations, and this requires data to be available at all times to all users, anywhere." Orme added that the ability to access business systems worldwide, without the need to load client software, is now a necessity for any business.

Orme also considers that developments in mobile communication infrastructure have seen an increased demand for mobile computing. "No longer is it sufficient to receive emails on PDA, mobile phones or tablets," he said. "Companies now demand that entire business processes can be undertaken in real-time using such technology. This is not only relevant to logistics/delivery companies, but equally applies to companies with service engineers, travelling sales staff or remote workers."

In terms of some of the key drivers for changes, Orme reflects that systems and solutions that have been designed and built from the ground up to take advantage of 'Internet technologies' have enabled this explosion of mobile working. "The demands made on modern business solutions simply weren't possible or even conceivable when older systems were developed," he said., adding: "Whilst it is sometimes possible to extend the life of older technology to work for a while longer, there comes a point where there is a business need for a modern system to take advantage of what is now possible and expected. It is those ERP vendors that have continually invested in R&D, and are continually developing their product, that drive forward the marketplace and allow companies that replace legacy systems to take advantage of the latest technologies."

According to Phil Burgess, RVP, base ERP sales at Infor, Mobility is a key area of development. "People expect this capability these days due our familiarity with a range of mobile devices and the ubiquity of wi-fi and broadband," he said. "Simply put, the expectation is that it should be as easy to access any enterprise app as easily as anything at home, on the move." Another development, says Burgess, is to be found in the area of reporting KPIs, balanced scorecard, BI etc. "Reporting still rules a lot of reasoning," he remarked. "You must be able to make informed decisions based on the intelligence in the business. This is now 'uber-critical' as every decision (especially in the current finance climate) must be rock solid. The better your handle on information (especially cash flow and projections), the better access to funds you'll be likely to have." In terms of drivers for these changes, Burgess comments that user expectations have really shifted the ground on which enterprise apps such as ERP stand. For example, he points out that search has meant that businesses now demand the data they need not just access to the data. "Indeed, many now want the system to deliver the information to them instead of them having to look for it," he said. "These expectations will only increase."

Andy Latham, managing director K3 Business Technology Group, concurs with Burgess on the mobility front. "With the increasing use and availability of mobile phones, ipads and iphones, users are expecting to have company information at their fingertips when out and about with customers and suppliers alike," said Lathan. He also reflected that handheld factory devices are now popular for increased real-time transaction processing for capturing crucial business information. "The days of a factory being a shift behind with their data are long gone," he remarked.

Bridging disparate systems
And with regard to dashboarding, KPIs and graphical representation of data, this, believes Latham, is seen as a bridge between disparate systems and standardising business rules into graphical reporting in other words, a single version of the truth. "Decision making needs to be quicker than ever in the current climate," he said, "and you need to have your data in a good readable format." Also, Latham comments that making good use of a Customer Relationship Management system (CRM) means an organisation knows more about its customers and supply chain and can make cost savings with meaningful campaigns in selling to customers and prospects.  Likewise, warehouse management systems are coming to the forefront as manufacturing is becoming more distribution orientated in the UK now." As for the background to these developments, Latham considers that the severe economic recession of the last few years has forced manufacturers and distributors to seek new ways to make their operations 'leaner and greener'. He added that a reduction in head count has meant an increasing reliance on accurate and timely information. "Software vendors have responded by offering easy-to-use dashboarding and customising of tools at the front end of their products," said Latham.

Of late, Dinesh Mohan, industry principal, enterprise solutions at Infosys Technologies, has been observing a growing trend of back-to-basics among ERP product vendors. "Over the years, we have seen ERP vendors enriching their products with business best practices for each industry vertical and micro-vertical," he said. "In this process, they have frequently made the product more complex to implement and more difficult for end-users to adopt and use. In effect, this product-enriching process has resulted in 'strait-jacketing' the products, reducing their flexibility to adapt to specific customer business processes. So product vendors are now going back to the drawing board to see how the product can be provided more as a platform that enables customers to quickly build additional functionalities their businesses need, with minimal incremental costs."

Thus, says Dinesh, the modern breed of ERP will see more infrastructure and plumbing (read forms, workflow capabilities, integration adapters, BI capabilities, security, etc.) coming from the package vendors while the customers will design the interiors (read configuration, process modelling, integration and reporting) with the help of their interior designer (systems integrator firms). "This whole idea represents a sea change in ERP product development, implementation and adoption," said Dinesh, who added that, apart from these developments, product vendors are working on innovation areas such as native support for RFID, mobility, social media integration and SaaS offerings.

As regards the drivers for these changes, Dinesh considers that feedback from customers and systems integrators is definitely shaping the emergence of the new-age ERPs. "Customers are getting tired of complex ERP implementations that are a drain on money and time," he said, adding that, instead, they are opting for packages that are more user-friendly, flexible for modifications and can provide rapid return on investment. "This has led package vendors to innovate by not just adding feature-functionality into new version releases, but in some sense go back to the drawing board to create completely new products," he remarked. Dinesh also maintains that the macro-economic situation worldwide over the past two years has forced product vendors to innovate their offerings; thus hastening releases of hosted versions and SaaS models to meet customer constraints on capital expenses and providing them an option for on-boarding ERP solutions in an opex-only model.

Integration
And in terms of system integration, have ways of best connecting ERP with other systems developed to any notable degree over the past year or two? "Yes, most definitely," exclaims Latham. "The integration of products like this has always been required, but the touch points between these products are now clearly defined," he said. Latham added that there is also a general acceptance that integrating best-of-breed solutions is the right way to go as most vendors now provide web services and APIs that provide standard integration. "Syspro DataSwitch is an excellent example," he said. "We use this to integrate anything from warehouse management systems to CRM, to hire systems you name it."

Gordon Fleming, senior executive and chief marketing officer at QAD, believes that integration remains a key challenge for ERP users and vendors alike. Said Fleming: "When we look at the proliferation of point applications, many of which are in the Cloud such as Salesforce.com for CRM or Workday for HRIS we see a need to integrate not only with applications in the same data centre but also with applications that are in the Cloud." To address this, Fleming explains that QAD has both an integration layer and API set called QExtend. QAD has also developed a set of connectors to common applications, whether a specific application for common applications or generic for applications classes. "These connectors allow simple integration and simple maintenance," said Fleming.

According to Bull, customers are looking increasingly to find end-to-end solutions. And while ERP systems have made huge bounds over the past decade to function within more and more corners of a business, Bull believes there will always be requirements to integrate with specialist software and hardware. He also maintains that connectivity in a modern global economy means that businesses need to communicate and collaborate with members of their supply chain in many facets of business activity; from product design through to product returns and recalls. Bull continued: "Modern ERP systems include web service tools that allow the connections between both internal and external systems to be easily defined and easily maintained, without having to resort to specialist technical software personnel and by using the internet as a connectivity pipeline. Cost of ownership is further improved through the use of these tools."

SOA uptake
Norwood's view is that there have not been any major shifts in ERP integration the past two years, "since Service-Oriented Architecture (SOA) has been widely considered to be the most reliable way to integrate systems". But, what has changed, according to Norwood, is the uptake of SOA in organisations of all sizes. "The technology has proven itself, and middleware toolsets are available such as Epicor Service Connect, to simplify the process of both application-to-application and business-to-business integration, giving IT decisions makers the confidence to wrap legacy applications in SOA wrappers and create solid reliable connections between their applications."

Although Epicor supports SOA as an integration layer and understands the on-going need for that, Norwood explains that the company has taken a slightly different approach to this question and, instead of integrating a series of best-of-breed components, has moved to offer commonly needed core competencies. These, he says, include CRM, field service, and advanced planning & scheduling as embedded functional processes within the overall ERP footprint. "In many cases this delivers superior benefits to business as they have a single system that looks and feels and works the same right across the business," said Norwood. "This lets them spend time focusing on the business and not on integrating disparate point solutions."

Orme also focuses on the SOA theme. "Modern-day system providers who have listened to customer demands have tailored their architecture to be SOA enabled, thus allowing integration with other software or mechanisms for data input," he said. However, he adds that there is still a big requirement for ERP systems to contain the majority of the functionality, as companies do not want costly and time-consuming integration projects that need constant upgrading and maintaining to keep abreast of the latest versions of all the software solutions in place. Orme continued: "The past couple of years have seen products such as EFACS from Exel Computer Systems, which bring together ERP, Supply Chain Management, CRM, Document Management and Field Service Management all within one single integrated product, from a single supplier."

Fully connected
Burgess considers that businesses now rightfully demand that systems be able to talk to one other. "Technology should live and act as one these days," he said, "from a CAD system to ERP to Microsoft to document management and so forth." He added that, in the case of Infor, its ION approach to interoperability is all about ensuring fully connected systems.  "Based on the OAGIS standard, ION has really opened up the Infor portfolio to work together," Burgess enthused. "On a wider industry level, I think it is fair to say that people have been talking open/interoperable systems for a while but in reality not making much progress."

Dinesh reflects that there have definitely been successful attempts to move ERP products out of the back-office applications bucket, transforming them into more modern, enterprise productivity applications for users. "This has been achieved by offering user interface upgrades for different packages," he said, "as well as providing a closer resemblance and integration to front-office systems like CRM, portal applications, touch screen, and mobile interfaces." Dinesh continued: "The power and information content within the core ERP systems have also been enhanced by the package vendors, providing out-of-the-box adapters for industry standard warehouse management systems, supply chain management solutions, customer relationship management applications, etc. This kind of integration reduces the 'swivel-chair' syndrome for the end-user, who in the past had to work in different applications in a particular sequence to complete the whole process flow. Now, all the information views and processes can be completed in the integrated ERP."

Dinesh adds that integration of the ERP applications with other software also has been made simpler with the advancement of Enterprise Application Integration tools. These tools come with standard adapters for the different front-office and back-office applications, eliminating the need to set up point-to-point integration mechanisms. "Most of the applications now provide web services-based integration capabilities to push and pull data to and from ERP systems," he pointed out.

Turner observes that, in simple terms, integration-related developments are indeed taking place. However, he adds that these developments are only slowly affecting ERP systems as business drivers move companies towards a global business platform that drives standardisation and simplification throughout the enterprise for long-term benefits. This, says, Turner, is being achieved in several ways; including increased speed and capacity of databases such as Oracle's new Exadata machine, and integration of those databases/middleware and application products. Other facilitators, according to Turner, are pre-built BI applications and better management of data. Additionally, he points out that the use of business process management tools continues to reduce operational costs and increases efficiency; continually defining and leveraging industry best practices. Why is this progress taking place slowly? According to Turner, this is because companies have moved from point-to-point interfaces to integrated packaged systems and to SOA consolidating services, and even to the Cloud and the rate of progress towards leveraging better integration-related benefits depends on where individual companies are positioned within this evolutionary path.

Ian Wahlers, industry strategy director, Lawson Software reflects that, in terms of usability, ERP systems increasingly offer the ability to combine information and to manage processes more efficiently; pulling information together in one place and at the same time making it usable in a friendly workable way. "On the usability side Lawson has done a lot with the Microsoft .Net platform," he explained. "We've worked with Microsoft in developing what we call the Lawson Smart Office, which integrates Microsoft Office, makes the screen very personable, facilitates online chat, pulls together a company's enterprise applications, and much more."

On the application side, Wahlers has seen things go very much down the end-user vertical route, with ERP being more specifically tailored to certain vertical markets. This, he believes, has been one of the biggest shifts. Integration-wise, whilst adding functionality along that vertical capability, Wahlers has no doubt that users want to integrate vertically along their supply chains more and more. "And while the core essence of manufacturers or distributors is making margin out of making things or sending things, in the West there has been an increasing shift within the vendor community towards providing value-added services," said Wahlers. "So at Lawson we have developed service management; things that can go round the edges of the application such as aftermarket service, maintenance and so on."

Cloud forecast
Turner touched on the topic of Cloud computing. So, let's look at the subject in greater detail from an ERP perspective, and enquire as to whether has the Software as a Service (SaaS) model and the Cloud concept in general has had any notable level of impact on the ERP market so far? But before we get into the thick of the debate, Norwood provides his definition of the term: "Cloud computing is a broad area, but essentially provides businesses with access to elastic IT infrastructure and services usually via a utility service provider model. Computing in the Cloud also incorporates the SaaS model, which provides significant flexibility to companies of all sizes in terms of the way they run the business, how they choose to deploy ERP solutions, and take advantage of new technologies in order to support innovation and growth." Norwood added that it is now possible for a company to get access to the latest technology for a fixed monthly fee, with little or no capital expenditure. "It's another example of the Internet levelling the playing field, and enabling companies of all sizes to be competitive," he said.

Norwood pointed out that Epicor has had a lot of interest since launching the Cloud version, or Express Edition, of Epicor Manufacturing (Epicor Express) in North America in 2010. "But, in truth, full-blown ERP SaaS offerings are only just reaching a point where customers are prepared to entrust their businesses to them," he said. "Every vendor has implemented SaaS versions of their products in different ways, and many of these only offer SaaS which ties customers into a solution that would be costly to move away from. That is why we took the time to ensure that Epicor Express actually offered customers flexibility in deployment options they can go from SaaS to on-premise with as little pain as possible, since it's the same code base for both deployment options." Bull observes that, from an ERP perspective, the market is only just starting to feel the impact of Cloud computing. However, he adds, ERP systems are now starting to take advantage of services that are made available in the Cloud by partners and service providers (such as credit card payment services, carrier and haulier services, etc.).

Turner points out that, according to Gartner, spending on SaaS enterprise applications will catapult to US$14.8 billion by 2012. "SaaS has transitioned from an emerging strategy to a mainstream alternative to traditional software licence models," he said, adding: "New technologies particularly Cloud computing, virtualisation and software conversion tools can allow virtually any COBOL, Java or .NET application to be run on an externally hosted platform or on premise system." He also explains that physical servers, storage and bandwidth cost borne by customer with on-premise deployment disappear in a SaaS model. Turner commented that CSC is seeing a growing interest in the Cloud concept and has recently launched CSC BizCloud, an on-premise private Cloud billed as a service. "BizCloud is expected to accelerate the adoption of a private Cloud by businesses and government agencies because it eliminates long-lead times for implementation and the need to budget for capital investment," he said.

BizCloud features CloudCompute, CSC's new Infrastructure as a service (IaaS) architecture, which is deployed in the CSC Trusted Cloud Datacentres. "CloudCompute delivers computer, storage and network resources as a service to support any application, and is especially capable for hosting mission critical and business critical workloads," explained Turner. He continued: "CloudCompute infrastructure is built on the Vblock Infrastructure platform from VCE, The Virtual Computing Environment company. Vblock integrates the leading virtualisation software, networking, security, computing, storage and management technologies from industry leaders Cisco, EMC and VMware. CSC's partnership with VCE enables the economic model that is unique to BizCloud."

Capex adversity
According to Martin Perry, managing director of K3's Managed Services, there is an increasing level of comfort as to what SaaS is and can offer. "Ultimately, people will decide what is the most appropriate delivery model for their business," he said, "but more and more the market is becoming comfortable with considering SaaS as an option; even if the end choice is the traditional option." Perry believes the main reason for this is that businesses are more capex adverse than ever before. Also, he observes that an increasing number of companies are unable to predict user numbers on short-, medium- and long-term bases, so Saas offers flexibility with cost and use. "Businesses MDs are reluctant to invest large amounts in complex hardware to run applications on a premise that they will have to be scrapped in five years," he said. "A lot of customers didn't realise SaaS was an option for them, perhaps aided by the fact that a lot of ERP suppliers were/are reluctant to offer a SaaS version. There are some products out there which started as SaaS applications that are thin in functionality. Forward-thinking and established vendors should offer a full version of their product in the Cloud."

For Fleming, the emergence and growing acceptance of On Demand or Cloud ERP one of the most exciting trends in the ERP space. "Companies are looking for effective ERP solutions without the difficulty of management, and now are deploying full-strength ERP, like QAD Enterprise Applications in the Cloud," he said. Fleming pointed out that over the past decade, QAD has seen the reduction in cost and the increase in availability of telecommunications combined with a more pragmatic mind set from Chief Information Officers (CIO) to accept SaaS. "The era of the IT empire is dying, and the modern CIO is one who is focused on the needs of the company and aligning with the business," he remarked. "The growing acceptance of Cloud ERP is beginning to change the mind set of ERP users. While we at QAD do not see all ERP in the Cloud, we do expect that most ERP will tend to be served to customers in this way in only a few years' time." Fleming believes there are many drivers for this, but the principle ones are the need for agility in deployment of systems and the focus of IT in becoming business enablers. "IT managers want to be able to serve the needs of customers faster," said Fleming.

Orme feels that although some modern products are 'Cloud-enabled' there has been minimal uptake of the SaaS model within the ERP marketplace so far. "Other areas of IT have obviously seen a big increase in SaaS adoption," he said, "but reluctance from certain business areas (most notably Finance) have led to a slower adoption of SaaS based ERP." Orme added that there have been perceived issues around data security, accessibility and speed. "Most of these perceptions are based around doubts about the infrastructure rather than issues with the ERP software itself," he said. "In the future as companies implement more modern infrastructures, adoption of cloud based ERP will increase as the apprehensions decrease."

Caution
According to Burgess, SaaS and Cloud uptake is limited to early adopters and additional systems that feed into ERP, ie. CRM and expense management. "Businesses remain a lot more cautious of putting the backbone of their operations in the Cloud," he said. "The key question they ask is 'where will my data live if it is not on the premises?' Manufacturers who use ERP are traditionally a lot later on the curve and more conservative, and so this is a huge leap for them."

In the enterprise applications market, Dinesh concurs with Burgess in considering that the most notable first mover on the SaaS model has been CRM. "We can also see substantial HR management, benefits administration and Payroll functions being offered in a SaaS model," he adds. "The observed commonality between these different areas is the fact that they are somehow considered 'non-core' in the applications portfolio in any enterprise, where an ERP application is considered 'core'. The tendency of the enterprises to hold the ERP processes and data closer to heart, tied with the need for data privacy, maximum availability and complete control, has always kept the demand for hosted ERP solutions low."

Ahead of the curve
In Dinesh's view, ERP vendors, big and small, have been agile enough to get ahead of the curve and offer their ERP solutions in a SaaS model in expectation of a gold rush in the near future. "They have seen some cautious early adoption in certain industry verticals and geographies," he said, "but are yet to see the expected deluge of enterprises rushing to adopt ERP on the cloud." Dinesh continued: "The SMB segment is definitely sitting up and taking notice of the SaaS-based ERP option, as it presents a never-before opportunity to leapfrog decades of multi-million dollar investments made by large enterprises and yet have the same capabilities in time-to-market and automated processes."

Wahlers considers that one of the issues worth discussing is whether a SaaS application is multi-tenant or not. "Salesforce.com is probably the best example where, in the CRM world, there are relatively predictable processes and where you can share multi-tenant deployment of an application, and follow relatively consistent processes while also having the means for some level of customisation," he said. "But I believe, for ERP, many of the current Cloud models are either quite thin in terms of functionality or scalability. To deploy something in the Cloud as large and complex as an ERP system you're likely to require a single-tenant model because you want something that's unique to you and something that you can easily modify when required." So, in terms of where the Cloud ERP model is currently, Wahlers believes it is early days. "No doubt, the attraction of lowering the Total Cost of Ownership, having the infrastructure taken care of, and paying for ERP like you do for your domestic electricity, is a nirvana," he said, "but we're a fair way from this perfect vision at the moment." Wahlers explains that, for Lawson's part, the company can offer its customers either on-premise or SaaS ERP as, say, a four-year engagement, during which time the customer might decide to go purely down the on-premise or SaaS route based on their own specific user experiences and requirements.

ERP tomorrow
In the wider context, what will the near future hold for the ERP market space? Norwood believes the market will soon start to see the emergence of smarter applications driven by industry best-practices. He points out that some of the thought leadership coming out of analyst firm Forrester discusses the emergence of what it calls 'smarter computing', suggesting that ERP software will expand its capabilities along four dimensions as it becomes increasingly specialised to address complex industry-specific business processes. "One of these dimensions, 'verticalisation to fit industry needs', you could argue is not new," reflected Norwood. "Granted, Epicor is already built to meet the needs of manufacturers, distributors and service firms and supports a number of key industry capabilities out of the box. Expect to hear more and see new approaches to this from vendors, including packaged best practice models for how best to implement and use ERP. These investments must continue in order to deliver even greater support for businesses' need to innovate (new product and service introduction) and improve business execution within industry."

Starting this year, Norwood believes we will begin to see a paradigm shift in what we have come to think of as 'user experience' and a resulting new breed of intuitive user interfaces. "There has been much talk about rich Internet applications (RIA), or business software that adopts many of the concepts we are now familiar with on the consumer and social Web and in gaming environments," said Norwood. "But not much has actually appeared other than a few Silverlight controls in applications from Epicor and others. Slightly more strange is that some ERP vendors have used modern RIA technology (eg. HTML 5, Silverlight and Flash) to simply recreate something akin to existing user experiences. Maybe that's a natural step but expect to see some fairly exciting developments in this area over the next few years."

Norwood added that Enterprise 2.0 has now started to move from over-hyped to table stakes. "We work hard to be at the forefront of Web 2.0 adoption for the enterprise," he said, "and we have tried hard to demystify it for customers by showing the business value of such technology. However, we are not alone, and any ERP system that doesn't accommodate the now common RFx requests for Social CRM, Enterprise Search, Data Tagging, Presence, Mashups, Activity Streams, Multi-channel Collaboration (or unified communication),and Wiki technology to name but a few will start to find themselves out in the cold."

Push to the extremes of the business
Orme sees a continued and further push of the ERP business system to the extremes of the business. "Over the past ten years ERP has moved from the office-based staff to the shop-floor, and more recently out to the sales offices and remote engineers," he said. "We are now seeing even more elements of the business coming under the umbrella of the ERP system the call centre, the administration activities (Document Management/Workflow), the travelling salesmen. As we move forward over the next few years this will extend even further to the entire supply-chain (customer and supplier web-portals, web self-service)."

Full potential
Orme also believes there will be an increase in the pace of the move away from PC-based users towards a much more varied and specialised array of hardware. "Tablet PCs, laptops, smartphones etc. will increasingly supplement the traditional office-based PC user," he said. "Only software that can work seamlessly on a wide range of devices will be able to meet this change in user profile and enable ERP system users to realise the full potential of their system." Additionally, Orme sees a positive future for mobile computing and the ability to undertake business processes while out of the office. "Specific tasks have been around for some time," he said, "however over the coming years more and more managerial and operation processes will become available on mobile devices."

Like Orme, Fleming expects to see further growth of mobile computing in applications around ERP, together with more growth in On Demand deployment. "We anticipate further emphasis by businesses to compete on business effectiveness," he said, "thus more emphasis on ERP partnership with vendors and the need to help customers achieve their goals." Additionally, Fleming points out that QAD expects the ability to rapidly and simply reconfigure business models using Business Process Management and configurable workflow will become prevalent. "These are all areas where QAD is currently focusing," he explained.

From Bull's perspective, the ability to get at the right information easily and to present it in an effective way is key to user productivity. "Over the next few years we will see new reporting tools being delivered that are increasingly visual, increasingly interactive, delivered through web browsers and having a user experience that is not dissimilar to using touch technology," he said. "Today's workforce has many powerful computing tools at their fingertips; smart phones, tablet devices in addition to the now traditional 3G-connected laptop computer. The plethora of new format devices on the market place will drive the development of ERP system extensions to take advantage of these tools. Smart phones will support the delivery of visual business information and will support replication of business data. Tablet devices will have uses in shop floor, quality management, retail and warehouse environments."

With regard to databases and integration enablement, Turner points to Oracle's Exadata and Exalogic Elastic Cloud as having a rosy future. He also believes the Integrated Business Planning (IBP) concept comprising sales & revenue planning, demand planning, supply planning and profit-based supply/demand balancing will gain further market traction. Particularly, he cites Oracle's Demantra Demand Management tool; a component of Oracle's Value Chain Planning solution set. "It is a best-in-class provider of demand management, sales & operations planning and trade promotions management solutions," said Turner, adding: "Demantra's familiar spreadsheet-style worksheets mean users rapidly become familiar with using the solution to add real value to their decision-making." Turner also foresees greater take-up of Oracle's Hyperion Financial Planning solution. Turner explains that Hyperion can help users to: manage and optimise their enterprise-wide performance; achieve management excellence by being smarter, more agile and more aligned across the organisation; and leverage the value of operational investments.

Additionally, Turner draws our attention to SNO (Strategic Network Optimisation), a product originally developed by Numetrix, then acquired by Oracle through the acquisition of PeopleSoft/JDE. Turner commented: "It is a desktop product with a very attractive graphical interface that can be used to inform and support any strategic supply chain decision, such as: evaluating alternative sources of supply; comparing inbound logistics options (eg. ocean vs airfreight); modelling manufacturing capacity; minimising distribution costs through an existing distribution chain; and evaluating alternative distribution networks. Many businesses face at least one of these challenges in coming up with their three- to five-year business plans, so there is a roll for SNO in long term IBP." Turner also points to Agile, Oracle's PLM (Product Lifecycle Management) solution. "The Oliver Wight view of IBP is that product development is an integral part of business planning," he said. "Therefore a PLM tool is needed to funnel product ideas and ensure that the right products come to market at the right time to support the company's long term plan. Agile can support the product development lifecycle, and is very good at supporting regulatory, packaging and other legal requirements."

In the world of ERP packages and their implementation, Dinesh is convinced that the effect of SaaS-based models will steadily gain prominence. "The momentum toward SaaS may start with mid-markets and certain geographic pockets," he said, "but SaaS-based delivery models will soon be attractive even to large enterprises when they look for an alternative to large capital expenses." Dinesh added that the existing work regime of systems integrators (SIs) will also change as they adopt and adapt to SaaS-based delivery and pricing models for on-boarding clients to the Cloud-based ERP products. "We can expect charge-out rates from SIs to be more along a per-user-per-month model with very minimal upfront costs," he said.

'Middle office'
Another area where Dinesh sees many innovative solutions developing concerns the access to these ERP products. "Users will demand access to be made more universal yet secure," he said, "and hence we will see package vendors providing tablet-based and mobile device-based user interfaces for working with ERP products. This will make the whole world of ERPs inherently more attractive and move them out of the classic 'back office' application classification to a more trendy 'middle office' labelling." Dinesh added that the user interface will become simpler and the required number of end-user training hours will rapidly decrease. "All this will lead to better ERP adoption and usage across large and small enterprises," he said.

Wahlers believes we are certainly heading for an increasingly centralised world through the adoption of concepts like the Cloud. "It feels like a major shift in the same way as it did when the trend moved from large mainframe computers to client server," he said, "but things are definitely going in that direction." Wahlers also makes the point that Apple has somewhat changed the game in terms of thinking about apps and their usability in the consumer world. And, he maintains, in the same way that apps are sometimes created in a somewhat speedy and reactionary way for the consumer market, then the enterprise world may also see certain types of business applications being written for similarly quick and easy deployment in the future.

According to Perry, Microsoft will become more and more dominant with its Cloud-based office solutions, "and subsequently, with less software installed on your desktop, the need for state-of-the-art or powerful desktop PCs and laptops is reduced," he said, adding: "SaaS and Cloud are in effect a 'war of attrition' on the PC's power base. This, coupled with the increasing introduction of thin client PCs and with the power-saving benefits that these devices have, will ultimately reduce the need for technical onsite support to maintain these devices." Burgess commented that the 'rebirth' of getting closer to the customer and suppliers as part of a chain of collaboration will come increasingly to the fore in the near future. "Our recent IDC research has shown that in a bid to improve customer retention and reduce costs, collaboration may well be a strategy many businesses take and they will want the technology to follow suit." Wahlers concluded by saying: "Put simply, ERP has developed from being a transactional platform to an information platform. In the past ERP has been very good as a solid backbone, but with the addition of things such as business intelligence and the ability to make applications integrate better, ERP has become much more of an information provider."