A challenge that many organisations are encountering as they embark on their digital transformation (DX) journeys is that the information storage systems (or systems of record) they have long relied on are quickly becoming outdated.
These decades-old systems were built in a pre-digital era and tend to run on outdated business assumptions and models. Simply put, they are antiquated systems — brittle, cobbled together, and hard to retrofit to meet the needs of today’s businesses in a highly competitive, digital business environment.
With evolving customer expectations and intensifying competition forcing businesses to aggressively pursue innovation, today’s systems of record will be replaced by new systems of intelligence. These new systems retain the core capabilities of their predecessors while layering in new autonomic and predictive intelligence assets.
This transformation is fast occurring across the spectrum of core software applications, including sales, marketing, commerce, and service and support, but the pace is most pronounced in the enterprise resource planning (ERP) application suite. We refer to this enhanced ERP portfolio “intelligent ERP” (i-ERP), and it will run the digital businesses of tomorrow.
i-ERP applications can be defined as ERP applications or suites that use machine learning and advanced analytics built on a large, curated data set to forecast, track, learn, route, analyse, predict, report, and manage these resources and business processes.
They feature an assistive and conversational user experience (UX) by automating a set of high-volume repeatable tasks and augmenting (via human-to-machine interaction) the performance of less frequent, more novel tasks.
As such, i-ERP applications are capable of processing, analysing, and acting on massive volumes of data in real time, using in-memory computing technologies. And because they are systems that learn, i-ERP applications must allow for ongoing reconfiguration to enable process refinements and UX adaptation.
As digital transformation strategies take hold, line-of-business leaders will increasingly demand intelligent enterprise applications to improve their business processes and resource utilisation. From customer relationship management (CRM) to human capital management (HCM) to procurement and supply chain, business leaders need continuous improvements in business processes, resource utilisation, and cost reduction and containment.
They will also require greater insights into their customers, partners, and employees. Fortunately, i-ERP applications have the ability to optimise resources such as the human input and interactions, business processes, and the technology itself, therefore addressing these needs perfectly.
These intelligent systems will leverage machine learning on massive data sets to enable the development of truly innovative products and services, all while facilitating greater levels of employee productivity and maximising the return on information assets.
The i-ERP applications will enhance the technology value proposition by moving from record management to intelligent systems that learn from exceptions and evolving business rules, empowering users to discover more actionable insights, better predict and plan for particular outcomes, and recommend next steps from a position of informed authority.
However, as technology advances, so does the business process and the skill requirements of the employees in question. In some instances, technology advances will surpass the employees’ skills, while in others, it will augment them, changing the actual work performed from investigation, search, retrieval, and building the case for action to immediate actionable insights applied with a valued outcome.
As line-of-business executives recognise this shift, more intelligent applications will be demanded to improve business processes and optimise the workloads between humans and machines, particularly as they begin noticing major improvements in efficiency, effectiveness, and value creation.
Another interesting trend in the area of ERP adoption is around cloud, which has already become the default model for some key enterprise applications. For example, in the majority of the CRM and HCM applications, the functionality of public cloud offerings has reached the stage where it is close to or equal to or has even surpassed that of traditional on-premises software.
And as if to hammer home that point, new ERP functionality is now appearing first as cloud applications and only later, if at all, within traditional on-premises applications. Indeed, technology vendors’ product road maps are actively pushing organisations into the public cloud, where they can be seduced by the benefits of greater agility, improved scalability, and lower implementation costs.
As the functionality of cloud-based core ERP modules matures, large organisations will begin to move these modules to the public cloud. And at this point, cloud will become the undisputed default model for the next-generation i-ERP applications that organisations of all sizes will adopt in steadily growing numbers over the coming five years.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC). He can be contacted via Twitter @JyotiIDC. Content for this week’s feature leverages global, regional, and local research studies undertaken by IDC.
