Postmodern ERP

Enterprise resource planning (ERP) systems are the bedrock of many modern manufacturing organisations; collecting, storing and managing information related to many different processes including production planning, bills of materials, delivery, marketing and sales. 

The functionality and complexity of today’s systems has come leaps and bounds in recent years, but, according Gartner, this increasing complexity of the ERP application portfolio is driving the need for a defined postmodern application integration strategy. The information technology research and advisory company believes that without addressing the integration concerns in a strategic manner, cost and complexity will begin to spiral out of control and any benefit will be quickly eroded.

Gartner predicts that through 2018, 90 per cent of organisations will lack a postmodern application integration strategy and execution ability, resulting in integration disorder, greater complexity and cost. Carol Hardcastle, research vice president at Gartner, said postmodern ERP represents a fundamental shift away from a single vendor ‘megasuite’ towards a more loosely coupled and federated ERP environment. “This new environment promises more business agility, but only if the increased complexity is recognised and addressed," she remarked. 

Gartner has commented that the shift to the postmodern world continues unabated. It makes the point that the majority of organisations now operate in a hybrid reality, leading to greater complexities in the application portfolio with new integration, analytics and governance challenges that can increase the risk of failure. Gartner adds that there is a dawning recognition among end-user organisations that postmodern ERP is no quick nirvana.

It states that many organisations moving from an on-premises monolithic state acknowledge they have little or no skills to support postmodern application integration. According to Gartner, these organisations have no postmodern application integration strategy, naively assuming the vendors will take care of it. “Vendors are not doing this, which has left many organisations scrambling to integrate applications when they finally realise this grim reality,” Gartner commented. 

Gartner also predicts that, by 2017, 75 per cent of IT organisations will have a bimodal capability, but only half of these will manage to avoid putting their ERP solutions at risk. Gartner comments that almost 40 per cent of CIOs are on the bimodal IT journey, with the majority of the remainder planning to follow in the next three years. Gartner states that bimodal will soon be a fact of life, but a large number of organisations “will make a mess of this change”, not by moving too fast, but by failing to understand where to apply the two modes. The risks of making a mess with bimodal IT are substantial, believes Gartner; particularly if it creates organisational, architectural, technical or process damage or dysfunction within the ERP backbone. This, says Gartner, could disrupt business operations, seriously damage business performance and come with a high price for remediation and mitigation.

Additionally, Gartner comments that until 2018, 80 per cent of enterprises will lack the capability to successfully deliver on their postmodern ERP strategy. Carol Hardcastle said 25 or more years after ERP solutions entered the applications market, many ERP projects are still compromised in time, cost and more insidiously in business outcomes. “Organisations need to resist the temptation to succumb to pressure from business leaders to get started before the enterprise is really ready (and without a business-agreed ERP strategy),” she said, adding: “Business leaders must understand what it will take to ensure success. The blame for this, however, does not lie solely with end-user organisations that lack the experience and expertise to avoid many of the pitfalls. System integrator (SI) and ERP vendors have to be accountable to their customers in this respect.”

Gartner adds that by 2018, enterprises will insist on postmodern ERP project deployments that deliver proven value in less than two years. It states end-user organisations are increasingly questioning the value of investment in ERP solutions and are looking for new solutions and new deployment models that can deliver value quickly. As Hardcastle stresses, ERP vendors and SIs must raise their game on implementation approaches, renovating and revisiting their own implementation methodologies for speed and with greater emphasis on the benefits-realisation activities.