Most established enterprise resource planning (ERP) investments fail to deliver the agility, adaptability, and intelligence essential for the current dynamic business environment and the elevated expectations of customers. A fresh wave of ERP solutions offers a more flexible, AI-driven, and user-focused experience. Enterprises must transition to these contemporary ERP solutions to optimise outcomes.
The Inadequacy of Legacy ERP Systems in the AI Era
Operating outdated ERP systems hampers business flexibility and performance. These older, generally non-cloud solutions:
Challenges in Modernising ERP Systems
In Forrester’s Software 1 Survey, 2023, only 22% of global software decision-makers whose firms are adopting business management software report primarily deploying it with multitenant SaaS; 32% state they still primarily deploy it on-premises. The ERP market has been one of the slowest to modernise significantly over the past two decades because:
The survey reveals respondents’ answers to the question: ‘As your organisation considers its software strategy and investments, which departments or business groups is it focusing on the most?’ The top answer was IT/technology (34%). This graphic is accompanied by a spreadsheet that includes all the presented data. Please refer to the spreadsheet for details.
Business Requirements and Next-Generation Technology Propel the Modern ERP Era
Business leaders in finance and operations require robust ERP systems that are resilient, secure, and scalable. They also wish to leverage new innovations in areas like AI and other modern technology paradigms (e.g., edge computing, blockchain, digital twins), which are difficult to achieve with their outdated legacy ERP systems.
Modern ERP: Flexible, AI-Driven, and Easily Accessible
Just as digital experience platforms enable organisations to streamline the creation, orchestration, and optimisation of experiences across touchpoints, an ERP system must support all processes and touchpoints beneath the customer’s visibility.
Flexible to meet rapidly changing business needs. Some organisations still operate significant parts of their businesses on outdated technology, such as '90s-era ERP or even COBOL systems, which are brittle and challenging to modify. Modern ERPs utilise the cloud, enabling business agility with decoupled microservices-based architectures, innovation that keeps technology “evergreen” (with less challenging upgrades), and low- and no-code platforms that support business-led development and marketplaces.
AI-driven for efficiency and innovation. From Oracle’s Adaptive Intelligent Apps to SAP’s Intelligent Enterprise, AI is a cornerstone of modern ERPs. AI enhances efficiency (automating mundane but critical tasks like the financial close process) and fosters innovation (making products smarter). IFS incorporates algorithms for predictive maintenance; Plex Systems invests in machine learning and analytics to reduce production downtime; and Unit4 focuses on financial process automation. We are only at the beginning of the transition to AI-driven enterprise applications. Project ERP specialist Deltek analyses project health using aggregate data from over 50,000 projects - a competitive advantage when users have access to vast amounts of data but limited insights.
Easily accessible for interactions beyond traditional interfaces. Modern ERPs provide multiple interaction methods, extending beyond browsers and apps. Key new features include gesture-based, mixed-reality, and voice-enabled touchpoints.
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